Chinese attendance at MWC will be massively diminished

While the world is holding its breath gaping at the worsening coronavirus crisis, China’s leading telecom companies are already putting alternative plans in place.

Most are still planning to attend Mobile World Congress 2020, though with plenty of precautions. The death toll of the ongoing coronavirus outbreak has risen above 1,000, though the new cases reported have declined, according to the official numbers from China. While the world is getting more nervous, with more companies pulling out the upcoming Mobile World Congress, some of the world’s biggest telecom companies based in China, where the epidemic originated, have rolled out alternative plans to cope with the downturn during the crisis and are looking towards the revival afterwards.

All the companies that are still planning to attend the Barcelona event have told the media that they will follow the precaution measures issued by GSMA. However, Telecoms.com has learned from China-based staff of a few global companies, who had planned to accompany their operator customers to the show, that most of the senior representatives from the Chinese operators have scrapped their travel plans. They have found the two-week self-imposed isolation in Europe not practical.

According to a report by Yicai, a Shanghai-based business publication, IDC has estimated that the total smartphone shipment in China will go down by 40% in the first two months of the year, as a result of the epidemic’s battering on the retail industry. Companies like Xiaomi, OPPO, and Vivo, all on the global smartphone leaderboard, have planned to launch new flagship products at the beginning of the year. They have modified the launch plans, if not changing the dates. Xiaomi, for example, has moved the launch event this week online, through live streaming. Honor, Huawei’s sub-brand, is also going to conduct its first launch of the year online.

A source inside OPPO told Yicai that the staff attending MWC have already arrived in Europe, so that they can self-quarantine for two weeks before the show starts. This is similar to the measures ZTE has announced with regard to its senior staff from China to attend the show in Barcelona. Vivo told Xinhua, one of China’s major official propaganda outlets, that its product launch event in China has been moved to online, but the company is going to appear at MWC and will launch its new products to the global markets as planned.

OPPO believes the coronavirus impact on its manufacturing is manageable, as the company has been making phones in India, Indonesia, Bangladesh, and Algeria, in addition to the main production base inside China. Vivo, on the other hand, has extended the Chinese New Year break at its manufacturing facilities till 10 February, as did the biggest OEMs Foxcomm and Inventec.

 

The death of Vodafone Idea starting to become a real prospect

Vodafone Group CEO Nick Read has reiterated his vow that no fresh funds would be injected into the Indian joint venture with Idea Cellular, painting a dreary picture for competition in the market.

As it stands, Vodafone Idea owes the Indian Government roughly $7.4 billion in spectrum fees, overdue payments and fines. Bharti Airtel is in a similar position, with both telcos pressing the authorities for relief. To date, the authorities are not budging, potentially undermining any commercial objectives for Vodafone in the region.

According to The Economic Times, Read has demanded the Government waive the penalties and interest payments, while also allowing Vodafone Idea to repay the principle sum over a period of ten years. Only if these demands are met, will Vodafone commit to continue the joint venture with Idea Cellular and push additional funds into the market.

This is a very stern statement from Read and one the Indian authorities should take very seriously. Numerous telcos have already left the market, and while it cannot be held to ransom by another, the competition landscape is looking suspect already.

The main issue here is a dispute over licence fees paid on spectrum assets. The telcos and the Government have different opinions on how much should be paid. This argument has been on-going for more than a decade, hence the ridiculous sums which Vodafone Idea and Bharti Airtel are being asked to pay. As Reliance Jio only came into existence in 2016, its own bill is much more palatable.

With extraordinary pressures already being placed on the spreadsheets thanks to the Reliance Jio disruption by undercutting existing pricing models, as well as a drive towards modernising infrastructure, this bill is the last thing the telcos need.

For Vodafone, you can see the predicament. There is a fortune to be made in India, but how much pain and expense can the business go through to realise it. The firm is facing difficulties in several other markets also; how many headaches can Nick Read tolerate at once? India might prove to be one migraine too far.

The beginning of the end: VodafoneZiggo switches off 3G network

The Vodafone and Liberty joint-venture VodafoneZiggo decided to switch off its 3G network to bring “The Netherlands much faster, safer and stabler mobile internet.”

In a release called “End of the 3G era”, VodafoneZiggo announced that “as of February 4th 2020, Vodafone will take its 3G network off the air.” The company, one of the first mobile operators to switch off 3G, explained the main rationale behind the decision is to free up frequencies for 4G, so that consumers currently only served by 3G networks can enjoy mobile internet “a fraction better”. Deploying 5G in the future on the frequencies made available is also on the card.

VodafoneZiggo warned those consumers that have held on to their phones since before its 4G service went live in 2013 that they may lose internet connections on their phones. It also suggested old SIM users order new SIMs with 4G enabled.

3G, first switched on by NTT DoCoMo in 2001, has been using 900MHz and 1800MHz in Europe and Asia Pacific, the frequencies that are valuable for mobile operators to roll out newer generations of wireless technologies to large proportions of the population. Meanwhile, the 384kbit/s data rate supported by 3G does not allow too much mobile internet to run on it.

It was only when 4G, with much higher data rate (theoretically up to 100Mbps downlink), was widely deployed did the whole mobile internet ecosystem start to flourish. So, it makes sense for the operators to drop the curtain on 3G and refarm these frequencies for 4G and 5G, which will generate higher returns.

Ironically although 3G went live 10 years after the first GSM network was launched (in 1991 in Finland), we may see 2G networks last longer. It is not so much that many people are still making phone calls or sending text messages over 2G, as it is powering large wide area IoT networks, such as utility metering, thanks to 2G’s low power consumption and wide coverage. The industry has also recognised this generational skip. For example, some Open RAN compatible radio products have been designed to support both 2G and 4G without bothering about 3G.

Vodafone claims removing Huawei from its European cores will cost €200 million

Vodafone group reported solid Q4 2019 numbers for Europe but says it  will have to blow €200 million on swapping Huawei out of many of its network cores.

Group revenues were up 7% year-on-year, driven by a 10% jump in Europe, which in turn was helped by the Liberty Global acquisition. Having said that, organic service revenue growth was flat, which is probably why the Vodafone share price is unmoved by the results. An additional factor will be an unchanged outlook.

“I am pleased with the pace at which we have executed our commercial and strategic priorities, which has allowed us to maintain our momentum in the quarter,” said Group Chief Exec Nick Read. “Competition in Europe remains challenging, primarily in the value segment, however we continued to improve customer loyalty and to grow in broadband, and we achieved good growth in Africa. We expect a further gradual improvement in service revenue growth in Q4, led by Europe.

“We have recently announced the proposed sale of our stake in Vodafone Egypt, which simplifies the Group into two scaled regional platforms – Europe and sub-Saharan Africa – and reduces our net debt. We have also appointed the senior management team for our European TowerCo, and we are preparing for a potential IPO in early 2021.”

The juicy bit of the quarterly presentation concerned Huawei, inevitably, with Vodafone detailing the implications of the recent decisions made by the UK and the EU on its business. The good news is that Vodafone UK is already complying by the restrictions, so no adjustments are needed. In parts of Europe, however, there are bits of Huawei gear in the core, which will apparently cost around €200 million to rip and replace.

We spoke to telecoms Analyst John Strand and he was keen to flag up the wording on the last part of the above slide, noting the €200 million number was just a ‘position’, rather than a piece of hard accounting. He also noted that, in the UK, BT has said the cost of replacing Huawei is essentially priced into regular network investment, so why is Vodafone implying this is extra cost. That whole section of the slide could be interpreted as laying the ground to get compensation from the EU and to lobby against quotas in countries where it has a lot of Huawei in the RAN, like Germany.

Other than that, the hell that is the Indian telecoms market remains a major issue. “In October, the Supreme Court gave an adverse judgement in the adjusted gross revenue (“AGR”) case against the industry,” said the Vodafone report. “The outlook for Vodafone Idea Limited (“VIL”) remains critical. VIL is actively seeking various forms of relief from the Indian Government to ensure that the rate and level of payments it makes to the Indian Government is sustainable and it can meet its other commitments as they fall due.

“In November, the Department of Telecommunications granted a two-year spectrum moratorium to the industry. In January, the Supreme Court rejected the review petition filed by VIL and other industry participants in relation to the AGR judgement. Both VIL and Bharti Airtel Limited have subsequently filed modification petitions, which are expected to be heard imminently, to request the Court to order the Department of Telecommunications to determine a payment schedule in relation to AGR dues and other reliefs.”

So Vodafone seems to be keen on state aid pretty much everywhere. To be fair a lot of the special circumstances it finds itself in have been brought about by state activity, but it still needs to be strategic about how often it extends the begging bowl. If governments and regulators start to perceive Vodafone as excessively opportunistic, they’re likely to lose sympathy fast.

RootMetrics US numbers indicate TMUS/Sprint merger is a good idea

The performance metrics of the four US MNOs confirm a significant gap between the big two and the other two.

RootMetrics did a deep dive into the networks of Verizon, AT&T, T-Mobile and Sprint over the second half of last year. In the customary way it then published top-line performance numbers and ranked the networks according to a few sub-criteria. As you can see in the first table below, Verizon comes top in nearly all categories, with AT&T close behind and the other two lagging considerably. We’re not sure why AT&T isn’t number one in any of the speed categories but it’s presumably explained somewhere in the methodology.

The report also takes a specific look at 5G and finds some pretty major variations in performance. Verizon got so excited about the finding that ‘Verizon’s 4G LTE speeds were faster than the low-band 5G median download speeds of T-Mobile in Chicago and Los Angeles and identical to AT&T’s low-band 5G median download speed in LA,’ that it published a special press release. This doesn’t come as a massive surprise since TMUS is devoting so little spectrum to its 5G right now.

The more significant issue raised by this report is how far behind TMUS and Sprint remain on most key metrics. This would seem to support the case for their merger, since the resulting economies of scale, buying power, etc, would allow greater investment in the network. Whether or not that would actually come to pass, or whether shareholders would trouser the cash instead, is hard to predict. But it seems counter-productive to insist they continue to struggle as second-tier MNOs.

NTT DoCoMo says what it thinks 6G should be all about

Japanese operator NTT DoCoMo has become one of the first industry heavyweights to lay out its vision for 6G technology and service expectations.

In a recently published whitepaper, Japan’s largest mobile operator outlined what it believed how 6G would look like, including technology requirements, service scenarios, and the next step research agenda. NTT DoCoMo becomes the latest, as well as one of the first leading telecom operators, to set down a marker in the nascent but active 6G discussion.

This document was published 40 years after the then Nippon Telegraph and Telephone Public Corporation launched what it claimed to be the world’s first cellular mobile communications service. The company believes the mobile telecom industry normally goes through a generational technology change every 10 years, while the model of value creation would undergo a step change every 20 years. It sees 5G such a step change, and 6G being an upgrade, though immensely better. The operator expects 6G service to start rolling out around 2030.

Somewhat confusingly, the NTT DoCoMo authors called the ramp up from 5G to 6G “5G Evolution”, a term that has been used by companies like AT&T and Ericsson to refer to the stage when the industry was running up from 4G to 5G, and appeared as a debatable logo on AT&T phones before the carrier’s 5G service was launched.

Source: NTT DoCoMo

Specifically, the NTT DoCoMo whitepaper lists these six technology benchmarks for 6G to achieve:

  • Extremely high-speed and high-capacity communications, e.g. peak data rate to go >100Gbps;
  • Extreme coverage extension, including coverage in high altitude, under sea, and in space;
  • Extremely low power consumption and cost reduction, including alternative charging technologies;
  • Extremely low latency, e.g. sub 1ms end-to-end latency;
  • Extremely high reliability, e.g. availability to improve from “five-nine” to “seven-nine” (99.99999%)
  • Extremely massive connectivity and sensing, e.g. handling 10 times as many connections as 5G does in comparable space

The operator sees these technology properties critical to realise the use cases ranging from the fusion between digital and physical environment and communication between humans and things to bridging the digital gap between different social groups and addressing other societal issues.

NTT DoCoMo believes the following should be the R&D focus areas in the years to come:

  • New network topology
  • Coverage extension including non-terrestrial network
  • Frequency extension and improved spectrum utilization
  • Further advancement of wireless transmission technologies
  • Enhancement for URLLC and industrial IoT networks
  • Expanded integration of variable wireless technologies
  • Multi-functionalization and AI for everywhere in mobile network

What NTT DoCoMo has laid out, despite with more details, is not too different from what the Finnish 6Genesis programme announced at last year’s Mobile World Congress, including the expected timing of 6G rollout. The industry conversation has since picked up speed, with the first 6G Wireless Summit held in the Finnish Lapland in March.

The so-called “world’s first 6G White Paper” was published in September, to which the new NTT DoCoMo whitepaper has much in common, in particular the research agenda. However, the clout of one of the world’s largest mobile operators will lend weight to the ongoing discussion of what 6G should be about. While China has also thrown its weight behind 6G, we can expect to hear more about this topic at the upcoming MWC 2020.

Indian government backpedals over operator fees

Indian officials have reportedly been told not to take ‘coercive action’ if Vodafone Idea and Bharti Airtel don’t pay their massive bills by today’s deadline.

The news comes courtesy of the Financial Express, which reports that the department of telecoms has decided not to do anything when the two operator groups fail to pay up. And it knows they won’t because they have told it as much, apparently. Last week the Indian Supreme Court refused to review its decision demanding the payment of historical license fees plus fines sand interest.

Reliance Jio, which owes far less because it hasn’t been around for long and is owned by India’s richest man, has paid-up, we’re told. It looks like the pretext for this fresh concession from the government is a fresh round of appeals from the two operators, but the real reason seems to be that they’re increasingly calling the government’s bluff over this cash.

Vodafone has previously indicated it might just pull out of the country entirely if the bill is not at least reduced and the Indian telecoms market has undergone dramatic change and consolidation in the past few year, with Jio emerging as a dominant force. The government has put itself in the position of effectively destroying its telecoms industry with a series of missteps and the incumbent operators seem to be betting it lacks the will to robustly chase the debt. This decision indicates they may well have a point.

Telefónica reportedly receives €10 billion bid for 51% of its Hispanoamérica business

A group of Latin American oligarchs seem to have had a whip-round to buy a majority stake in all Telefónica operations in the continent, bar Brazil.

The rumour comes courtesy of Spanish newspaper El Mundo, which claims the fattest cats in each of the Spanish-speaking Latin American countries Telefónica currently operates in have clubbed together to bid for a controlling stake in Telefónica Hispanoamérica for €10 billion, which they would then distribute among themselves. It looks like the plan then would be to IPO another quarter of it to claw back some of the cash.

We’re told the bid originated from Colombia, but covers Argentina, Chile, Venezuela, Ecuador, México, Perú and Uruguay too. It should be stressed that when El Mundo approached Telefónica about the story, it denied there is evidence of the offer, which seems a tad slippery. It’s certainly no secret that Telefónica wants to flog its Hispanoamérica unit, since it formally announced the plan late last year.

If any of this is accurate it values Telefónica Hispanoamérica at around €20 billion, which is serious money. But even if it sold all of it for cash, that would still only halve the epic debt pile it has managed to accumulate over the years. On the flip side it would then have the liquidity to double down on its European and Brazilian operations, which should make things interesting in those markets.

Challenges & Key Issues of Constructing ‘MEC-Ready’ 5G Bearer Networks for Carriers

5G applications are widely used across various industries. A newly developed mode “5G+edge computing+AI” enables carriers to help vertical industries realize digital and intelligent transformation. This brings four new challenges for operators’ bearer networks. To build an MEC-ready 5G bearer network, carriers need to fix six key issues.

MEC Is Key in the 5G Age to Digitally Transform Thousands of Industries

Application localization, where data is not transmitted out of the campus, high-bandwidth content distribution, and low-latency computing localization all boost the migration of service contents, applications, and computing to the edge, propelling the development of multi-access edge computing (MEC) and moving the core network of 5G downwards.

Figure 1-1: Migrating services to the edge advances MEC development and moves the 5G core network downwards

The 5G core network uses a flexible architecture where the user plane function (UPF) and session management function (SMF) are separate. This way, UPFs can be utilized as needed. One SMF can manage multiple UPFs simultaneously while maintaining the high performance of the 5G core network. 5G brings a number of new advantages to MEC, including:

  • The core network’s UPF is moved downward to the enterprise campus, ensuring that key service data does not leave the campus and providing a low-latency bearer solution. Carriers can configure a UPF independently for each enterprise, customizing wireless services for enterprise users.
  • Carriers can provide 5G communication service capabilities such as positioning and wireless communication capabilities that are open and programmable, and can be utilized by enterprise users and integrated into enterprises’ service systems. Therefore, enterprises can create their own 5G innovative applications.
  • The 5G MEC system that is moved downwards is directly interconnected with the enterprise network, enabling applications distributed on the two network systems to be integrated and streamlined in real time, and facilitating the development of customized innovative applications.

Four Challenges Facing Carriers’ 5G MEC Bearer Network

Traditional 4G bearer networks mainly carry north-south traffic. Numerous carriers adopt the Layer 2+Layer 3 mode, which is no longer suitable for transmitting 5G MEC traffic locally. 5G MEC brings four new challenges to carriers’ bearer networks:

Figure 1-2: New challenges for carriers in deploying their 5G MEC bearer networks

  1. MEC deployed locally in enterprise campuses is a brand new application scenario. Vital enterprise service data must not be transmitted out of the campus, which poses new challenges to the carrier’s access network.
  2. The UPF of the MEC is moved downwards. Consequently, UPF’s interfaces such as N4, N6, N9, and 5GC OAM interfaces on the 5G core network are also moved downwards, and the L3VPNs on the IP backbone network for 4G core networks are moved down to the UPF’s access point. The new challenges have arisen from the large-scale deployment of 5G MEC deployment.
  3. The UPF of the MEC needs to communicate with its control plane (SMF) and the management & control system of the 5G core network in the central cloud, with the high-performance communication requirements of the telco cloud. MEC applications may be a part of cloud computing in a data center (DC) and are deployed at the edge. They need to interconnect and collaborate with this cloud computing applications. This poses a new challenge to edge-cloud synergy on carriers’ bearer networks.
  4. MEC supports integrated access on fixed and mobile networks and provides a seamless fixed-mobile convergence (FMC) service. The bearer network needs to provide MEC with connections across the mobile and fixed bearer networks, to provide the interworking of services between the MEC and central cloud, as well as between MECs. This poses new challenges in the network architecture, especially to the carriers who have both the mobile bearer and fixed bearer metropolitan area networks (MANs).

Six Key Issues of Carriers’ 5G MEC Network Architecture Model and Network Construction

Figure 1-3: Carrier bearer network architecture model from MEC’s viewpoint

The bearer network architectures of different carriers are varied. The following sections introduce a bearer network architecture model from MEC’s viewpoint in Figure 1-3.The aforementioned 5G MEC network communication model requires carriers to fix the following six key issues when constructing MEC-ready bearer networks:

  1. The shortest MEC access network: Carriers need to provide the shortest path for the service flows of N3 interfaces from the gNB to MEC UPFs. In the onsite MEC mode, N3 interface service flows need to be forwarded to MEC through mobile bearer routers in the campus directly. In addition to ensuring low latency and saving bandwidth on the carriers’ network, this also ensures that enterprise’s key service data does not leave the campus area, as shown in Figure 4. This requires the MEC access router to forward data packets through the shortest path. To do this, the MEC access router is required to provide the necessary routing capability (Layer 3 forwarding to edge).

Figure 1-4: MEC needs a low-latency access network without a detour

  1. Low-latency slicing: To meet the requirements of MEC applications for low latency, high security, and high reliability, carriers’ bearer networks need to provide low-latency slicing network services for enterprise users. The MEC sliced network includes the gNBs, the mobile bearer network (between the gNBs and MEC), and UPF. That is, all the network elements (NEs) that service flows from enterprises pass through to reach MEC. The fewer the NEs that the packet passes through, the simpler the slicing and the shorter the transmission latency are.
  2. Multi-point communication from MEC: Service flows among the MEC and the 5G core network (N4 and OAM interfaces), MEP management platform, the other MECs are in multipoint-to-multipoint communication mode and need to be supported by L3VPN. The MEC bearer network needs to provide L3VPN capabilities on the entire network, including the access network; that is, L3 VPN to the network edge. In addition, the L3VPN needs to span multiple network segments such as the MAN and backbone network. The MEC bearer network has increased in complexity compared with the 4G bearer network in terms of the number of NEs, as a large number of UPFs have moved downwards, and the network coverage, which covers from the access network to the backbone network. Therefore, a flexible and powerful L3VPN is required to support multi-point communication, as shown in Figure 5.

Figure 1-5: Management and control service interfaces across multiple networks

  1. Communication capabilities integrated in the routers of the MEC system: Small- and micro-MECs are conventional in 5G MEC. Due to the cost and communication requirements, the MEC typically uses a one-layer integrated network model (as shown in Figure 6), while a data center often uses a complex multi-layer network architecture. The routers of MEC need to provide all the required communication functions, such as interworking between the devices in MEC, reliable Layer 2 & Layer 3 connections between VMs, interworking and reliable communication with an external IP network (IP RAN), and edge-cloud synergy. UPF as Network Function Virtualization (NFV) can run on multiple VMs, to improve performance and reliability. The MEC routers need to provide equal-cost multi-path routing (ECMP) for 16-path load balancing currently for high-performance UPF.

Figure 1-6: MEC network model

  1. Edge-cloud synergy: MEC UPF used as the data plane of 5GC is moved to the edge, and applications function as real-time processing units of cloud services and are moved to the MEC. All these require the carrier’s bearer network to provide reliable cloud-edge communication capabilities and support edge-cloud synergy in automatic deployment and operations and maintenance (O&M). For details about UPFs’ edge-cloud synergy, refer to the telco cloud bearer solution.
  2. Secure interworking between two networks: A carrier’s MEC network needs to interwork with an enterprise network to enable the enterprise to integrate 5G communication capabilities and MEC applications into enterprise service systems. Currently, MEC routers are used to communicate with enterprise networks. As network security is a major concern for both enterprise networks and carrier networks alike, a firewall-based network security solution is required to ensure high security.

Conclusion

5G mobile communications systems have made many improvements in supporting vertical industries, such as realizing low-latency wireless communication, a flexible core network architecture, and super uplink. These new features of 5G are what sets it apart from 4G. MEC is a new model for carriers to help vertical industries become digital and intelligent. It is also the beginning of widespread distribution of intelligence on the network. In the future fully connected intelligent world, edge computing-based intelligence will become prominent on the network. Without considering the MEC’s network requirements for vertical industries, the 4G bearer network is constructed for the typical mobile phone users, whose traffic model is in the north-south direction with centralized model of the 4G core network. Therefore, 5G MEC bearer network construction is so much more than a simple bandwidth upgrade of the 4G network.

 

About the Author:

Dr. Song Jun: Senior Solution Architect of Huawei Datacom Product Line, Co-Chair of the ECNI (Edge Computing network Infrastructure) Work Group of the Edge Computing Consortium. Since 1991, he has been engaged in research on data communications technology. He has worked on network planning in a tier-one multinational carrier in the United States and was a member of the expert working group of Chinese Next Generation Internet project. (song.jun@huawei.com).