LG ditches and ZTE scales back on MWC due to coronavirus

The World Health Organisation declaring the coronavirus a Public Health Emergency of International Concern raises serious concerns about impact will this have on Mobile World Congress.

The annual telecoms bonanza is set to begin in just under three weeks’ time, and while the GSMA might be making the right noises currently, there is concern among attendees and exhibitors. LG is the first company to make a meaningful splash in the MWC waters, deciding to pull out of the event completely.

“With the safety of its employees, partners and customers foremost in mind, LG has decided to withdraw from exhibiting and participating in MWC 2020 later this month in Barcelona, Spain,” LG said in a statement. “This decision removes the risk of exposing hundreds of LG employees to international travel which has already become more restrictive as the virus continues to spread across borders.”

As an alternative, LG will host a number of different smaller events across the world to meet with customers and partners, as well as showcasing the different technologies it has been developing.

This is the challenge which the GSMA faces currently; with c.5-10% of total attendees originating from China and at least 250 exhibitors coming from the country also, questions about safety will be asked.

“The GSMA confirms that there is minimal impact on the event thus far,” the GSMA said in a statement. “MWC Barcelona 24-27 February 2020, will proceed as planned, across all venues at Fira Gran Via Fira Montjuïc and La Farga L’Hospitalet, including YoMo and Four Years From Now (4YFN).”

Measures have been put in place, including:

  • Increased cleaning and disinfection programme
  • Increased onsite medical support
  • Availability of sanitising and disinfection materials for public use
  • Awareness training
  • Advice to exhibitors on implementing effective cleaning and disinfection of stands
  • Installation of new signage regarding hygiene
  • Communicating advice to all attendees to adopt a ‘no-handshake policy’

Outside of the GSMA, ZTE has also decided to make its position known. It will maintain a presence at the show, though it has put several procedures in place to minimise any risk.

Any employees from mainland China will have to exhibit no symptoms two weeks before departure and arrival in the MWC, and also remain in self-isolation during this period. Executives will self-isolate in Europe for the two weeks leading up to the show. ZTE will also ensure booth presentation staff are all from countries outside China, and mainly from Europe.

Other major Chinese companies, including Huawei, are yet to comment.

It remains to be seen how much of an impact the outbreak will have on MWC Barcelona, but a bigger headache might be the MWC Shanghai event in late June.

At the 2019 event, 500 exhibitors and 75,000 industry professionals attended the conference. 50% of the exhibitors were from outside China, and while 23% of the attendees were international. More than 100 countries were represented at the 2019 event.

While some might be nervous about attending MWC Barcelona during the outbreak, we suspect there will be a lot more people in aggressive opposition to travelling to China unless the Coronavirus has been dealt with.

1&1 Drillisch trials with ZTE seemingly up-and-running

ZTE might not get much media attention nowadays, though some might think of this as a blessing, but it seems to be getting along just fine with Germany’s newest telco, 1&1 Drillisch.

With reports being traced back to a YouTuber named Tobias Dirking, 1&1 Drillisch is seemingly trialling 5G technology with the lesser criticised but arguably more controversial Chinese vendor ZTE. While this is only a trial for the moment, ZTE equipment has been spotted on the roof of the telcos offices in Karlsruhe and Montabaur.

According to Dirking’s video, the network technology has been supplied by ZTE, while the 4×4 MiMo antenna is from CommScope. No LED lights can have seen flickering from the equipment, so it would be fair to assume it is not yet switched on.

1&1 Drillisch has said this is not an indication of a decision for its 5G suppliers, but it is working to trial all available options.

While ZTE is a well-known name in the industry, success in the European markets has been relatively low-key. The firm has a relationship with Wind Tre in Italy, as well as several smaller telcos such as JT in Jersey, though it has not experienced the triumph of its domestic rival Huawei.

Interestingly enough, if the more successful ZTE becomes in the European market, the more enflamed the relationship between European nations and the US might become. If the White House is enraged by tenuous claims of a link between Huawei and the Chinese Government, Senators are now calling it the ‘intelligence-gathering arm of the Chinese Communist Party’, it is hardly going to be enthralled by a state-owned entity supplying RAN equipment.

After being founded in 1985 as the Zhongxing Semiconductor Company, the firm now describes itself as ‘state-owned and private-run’. Xi’an Microelectronics and Aerospace Guangyu are two of the largest shareholders of the business, controlling five of the nine board seats, and are subsidiaries of state-owned organisations in China. This is a much more obvious link than what has been suggested between Huawei and the Chinese Government.

ZTE has largely escaped the spotlight in recent months, perhaps due to the fact it does not dine at the top table like its domestic rival Huawei does. The ZTE business sees greatest success in Asia and Africa, though if it does start to gain traction in Europe, we can imagine White House aggression would be expanded.

What is worth noting is this is simply one of a seemingly endless list of unknowns at 1&1 Drillisch. Right at the top said list is the launch date, but before that can be established, the telco needs to sort out its spectrum portfolio.

Having acquired two blocks of 10 MHz in the 2 GHz band and five blocks of 10 MHz in 3.6 GHz during the spectrum auction last June, 1&1 Drillisch has also confirmed it has entered a relationship with Telefonica to lease two separate frequency blocks of 10 MHz in the 2.6 GHz band. This lease will run until 31 December 2025, though the remaining unknown is for the lower frequency spectrum.

Although the spectrum which has been collected is attractive for 5G services, there is still a requirement for the low-band spectrum, more suitable for coverage and propagation. 1&1 Drillisch is drawing a blank for these valuable assets, so will have to enter into a national roaming agreement with one or more of its rivals. This is far from ideal and will have to be sorted before any commercial services can be launched.

1&1 Drillisch is a very interesting company to keep an eye on, primarily because of the regulatory leg-up it has been offered by Germany, but its choices on the supplier side could cause some ripples in the political arena.

Huawei and ZTE have a month to convince the US they’re not a security threat

The US Federal Communications Commission has set a deadline of 3 February for comments on its designation of Huawei and ZTE as security threats.

This is a standard regulatory procedure to demonstrate the gathering of as many viewpoints and pieces of information as possible before making a decision. But as is so often the case this will probably prove to be a mere formality in the rubber-stamping process of a decision that was made some time ago.

Specifically there were two almost identical announcements made by the Public Safety and Homeland Security Bureau, in which the only variations were the names of the companies. ‘The PSHSB announces that comments in response to the initial designation of [company], its parents, affiliates, and subsidiaries as a covered company in the Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs Report and Order are due on February 3, 2020,’ opened the announcement.

It goes on to clarify that this process refers to the prohibition on spending USF money by any US operator with Huawei or ZTE. Huawei is taking the FCC to court over this prohibition so it seems to be belatedly manufacturing the impression of due process in anticipation of the matter going to court.

It’s hard to see what arguments Huawei, ZTE or any of their allies could possibly present this month that would persuade the FCC of the error of its ways. Little, if any, concrete evidence has been presented of the threat they pose to US security other than the fact that they’re Chinese and thus presumed to be obliged to assist the Chinese state in espionage when required. Huawei’s legal action will rely heavily on demonstrating the FCC is not granting it legal due process and this call for comment does little to undermine that claim.

Orange launches first operator-branded 5G smartphone

Orange has launched what it claims is the first operator-brand 5G compatible smartphone, the Orange Neva jet, which will be debuted in Romania.

While 4G and 3G compatible versions of the device will be available in various markets, the 5G version will be sold as and when 5G networks are switched-on. Romania was the first of Orange’s national business to enter the 5G fracas in recent weeks, though the rest will have to wait until 2020.

“As we gear up to launch our 5G networks in 2020, the Orange Neva jet is testimony to our long-held promise to deliver the very best innovation and technology,” said Philippe Lucas, SVP of Customer Equipment and Partnerships at Orange.

“This is the start of that journey as we prepare customers for the arrival of 5G.”

Looking at the device itself, it is a customisation of the ZTE Axon 10 Pro 5G variant. Orange is keen to point out this is not simply a re-branding of the ZTE device however, with several distinctions on both the software and hardware elements.

Starting with the software, the smartphone will use Android Pie OS software but also include the Orange Experience with Live Screen, the content aggregation tool, as well as Gestures, a feature which allows specific actions to dictate functionality, such as speed-dialling or launching apps. The app store will also feature specialised applications for the device.

On the hardware side, the design and finish of the phone have been customised for Orange. Components such as the battery, processors and cameras are identical, though let’s not forget that Orange is not a smartphone manufacturer.

Another important point to note about ZTE is that its own branded devices will not be on sale through the Orange distribution channels.

The wider range of Neva devices (start, play, zen and link) will now be available in France, Spain, Romania, Poland, Slovakia and Moldova, while the 5G version will be available as soon as the 5G networks are switched-on in the respective markets.

Orange does have history in selling its own branded devices, it has sold 12 million since 2002, though this is an interesting proposition. Priced at €899, it is certainly more friendly to the wallet than other 5G devices. Orange has an incredibly strong brand across its European footprint, so it should surprise few if this device proves to be popular.

The First Network Slice Trial for Intelligent Manufacturing: How does the value of 5G reflect?

Recently, together with Zhejiang Branch of China Telecom and Zhejiang Bluetron, ZTE announced the successful commission of the first “5G Slicing + MEC + Intelligent Manufacturing” project in China, which will undoubtedly serve as a good example for the application of 5G in the manufacturing industry.

It seems that it is one of the areas that 5G has been exploring in the vertical industry this year. ZTE believes that this is the first project to apply 5G E2E network slicing technology to intelligent manufacturing scenarios in China, which has a unique significance for building 5G smart factories in various industries. To the telecom operators, it is also an important exploration targeting to the enterprise market.

5G implementation is the key issue

5G is not only the “popular star” in public, but also attracts the interests of users in various industries with its outstanding features of eMBB, URLLC and mMTC. How to introduce 5G to drive the business change and innovation, and make 5G a reality, are the common topics among telecommunication industry and vertical industries.

Therefore, the successful execution of this project is critical. The high-definition video streams for industrial production systems (such as Red Lion Cement feed inlet) is taken by BlueTron with its industrial cameras, and then transmitted to the industrial vision analysis system in real time via 5G network. The industrial vision analysis system, which is deployed on the MEC servers, conducts AI-based intelligent video analysis of the video streams. The abnormal in the production system, such as feed inlet congestion, can be automatically identified and alerted.

Network slicing is crucial in this project to ensure the large upstream bandwidth and high security isolation required by industrial vision scenarios. Vision analysis system is deployed on the MEC servers to provide nearby processing and ensure the low latency and high security. ZTE, Zhejiang Branch of China Telecom and BlueTron collaborated closely to provide a dedicated eMBB network slice and the MEC edge cloud platform for manufacturing enterprises. BlueTron’s cloud intelligent vision analysis system is loaded on the platform. In this project, not only the automatic monitoring and management of the production process are realized, but also the production data security is ensured since “data stays inside the factory” throughout the whole process.

The network supports multiple video streams uploading from various terminals at a speed of 20Mbps each and a delay around 20ms, which meet the current needs of industrial visual inspection in the feed inlet of Red Lion cement production line. This requirement for upstream rate is not very high and can be guaranteed preferentially through RAN resources scheduling supported by network slicing technology. With the further improvement of video resolution and bit rate of machine vision, as well as the increasing of monitoring point of industrial cameras in the future, the demand for 5G upstream bandwidth will be further increased. Independent frequency bands can be allocated in that stage and also the frame structure with higher up-ratio can be used to improve the utilization efficiency of RAN resources.

The video surveillance for production lines in traditional factories adopt wired connection solution, and a large number of cables are used, resulting in a complex internal structure of the factory, which cannot meet the needs of flexible production for future digital society. The adoption of 5G slicing solution makes it possible for wireless technology to replace wired, so that to easily build the flexible workshops and wireless factories, and promote intelligent manufacturing finally. That’s the meaning of this project.

Smart factories need 5G to do more

Currently, the project is mainly used for industrial vision detection, which is a common scenario in the intelligent manufacturing industry. In essence, it is the achievement of intelligent detection in industrial production environment through 5G network, by which the human visual is extended, empowered by the AI-based vision analysis system.

The current service flow of industrial vision inspection is still an open ring. In the future, it will be combined with the control flow to form a completely closed-loop automatic control system. 5G network will support seamless combination of eMBB service in upstream and URLLC service in downstream. Therefore, 5G low latency technology will play an important role in the future.

It is known that 5G eMBB network slicing technology is relatively mature and ready for commercial use. But the multi-dimensional charging of slices and business models need to be further explored in practice. The 5G URLLC slicing technology is expected to be commercially available by the year of 2021 after the accomplishment of relative standards in 2020.

Smart factories need 5G to do more. 5G technology will accelerate the transformation of intelligent manufacturing. “Internet of Things” of the workshops will be achieved by networking of the production equipment; production decisions are made based on the big data analysis with the production data visualization; the efficient and green manufacturing can be achieved when the production documents are paperless; the intelligent factory “neural” system can be created by the transparency in production process; and with the unmanned production site, the unmanned factory will be actually realized.

The 5G+ industrial internet can be applied in all the processes of the production, management and supply chains to help manufacturing enterprises in their transformation upgrading, reduce the cost, improve the enterprise informatization and competitiveness, evolving towards wireless, automated, intelligent, and flexible manufacturing.

For example, the 5G-based machine vision inspection, by the industrial cameras and edge computing gateway deployed in the production line, the video can be automatically processed, recognized and labeled, avoiding human error and mis-checking. All the units support on-demand, fast and flexibly wireless networking. This will greatly improve the qualification rate of the products. The scope of detectable applications in the equipment manufacturing industry will be expanded by more than 30% and the detection accuracy will be increased by 200%.

Digital transformation is just in time

On June 6, 2019, China’s MIIT (Ministry of Industry and Information Technology) issued 5G licenses to four major Chinese telecom operators, which means that the 5G era is officially open in China. Unlike previous generations of wireless technology, 5G will not only focus on upgrading in the public market, but also enter the vertical industries and build infrastructures for the digital transformation of the verticals. Miao Wei, the Minister of MIIT recently spoke at a press conference of the State Administration that, 80% of the 5G application scenarios will be on the industrial internet in the future.

The China Information and Communications Research Institute previously released the report “5G Industrial Economy Contribution”, which predicted that the information consumption driven by 5G commercialization in China from 2020 to 2025, directly driving the total economic output to CNY10.6 trillion ($1.5 trillion), and indirectly pull of the total economic output to about CNY24.8 trillion ($3.5 trillion). 5G will directly create more than 3 million jobs in China.

The digital transformation of the industry is the trend. We are currently on the eve of large-scale digital upgrading of the industry. The digital technology innovation will improve productivity and work environments by automation and intelligence of the production process. 5G networks are indispensable during such intelligent changes in manufacturing and digital transformation in vertical industries.

Industry scenario differentiation is very large. New demand, new business, new models are continually emerging. Compared to the B2C market, B2B market has the basic characteristics of fragmentation and high barriers. Expanding to the B2B market is a new topic for operators. Operators need to work closely with leading enterprises and solution providers in various industries in order to understand the needs of the industrial scenarios and transform them into network slice templates and form the B2B business models which are replicable, promotable, and profitable. ZTE believes that 5G will expand the market share for operators in the tide of digital transformation, and achieve sustainable growth of the telecommunications industry.

SK Telecom wins big at the 2019 Global Telecoms Awards

In the year that 5G finally made its commercial debut, Korean operator SK Telecom’s fast start helped it win three awards at the 2019 Glotels.

As well as being voted the best operator of 2019, SK Telecom also won awards for 5G implementation and BSS/OSS transformation. Not content with its three wins, SK Telecom was also highly commended in the consumer IoT and fixed network categories, bringing its awards total on the night to five. Other notable performers were Huawei, with two wins and a highly commended, and ZTE with one win and two highly commended.

“I feel confident in saying that this was the strongest set of entries to the awards we’ve had yet,” said Telecoms.com Editor Scott Bicheno (pictured above with Chang-min Park of SK Telecom), who hosted the awards alongside comedian Miles Jupp and was also one of the judges. “Our judges had a really tough job choosing between so many great products, services and projects this year and for that I thank them. The fact that so many entries were highly commended shows how close the scoring was. My congratulations to the winners and thanks everyone who contributed to our best awards yet.”

Here’s the full list of winners:

5G Implementation Excellence  

Winner – SK Telecom: World’s First 5G Commercialization

 

Advancing Artificial Intelligence               

Winner – Telefónica: Aura

Highly Commended – Nokia: AI as a Service for CMCC Hainan

 

Automation Initiative of the Year             

Winner – Huawei: AUTIN

 

Best 5G Innovation         

Winner – Vodafone Germany: Automotive Factory of the Future

Highly Commended – China Mobile, China Southern Power and Huawei: Smart Grid 5G Slice Operation and Monetization

 

Best Digital Transformation Project        

Winner – Infosys and Vodafone UK: Digital Platform

Highly Commended – Singtel: Unboxed

 

Best Operator    

Winner – SK Telecom

Highly Commended – Reliance Jio Infocomm

 

BSS/OSS Transformation Excellence        

Winner – SK Telecom: OSS Evolution for E2E integration and 5G Business

 

Connecting the Unconnected     

Winner – Ufinet: Rural connectivity case studies

 

Consumer IoT Initiative of the Year         

Winner – O2 and Accenture: Making UK homes smarter energy users

Highly Commended – SK Telecom: V2X Service Enabler (VSE)

 

Digital Transformation Innovation          

Winner – BT: The Digital Business Marketplace

Highly Commended – Netcracker: Digital Transformation Solution

 

Fixed Network Evolution             

Winner – Turkcell: Customer Oriented Failure Prioritization and Complaint Management

Highly Commended – SK Telecom: Giga Premium 10G Residential Broadband Internet Service

 

Ground-breaking Virtualization Initiative            

Winner – AT&T: Edge Solutions

 

Industrial IoT Initiative of the Year          

Winner – Dialog Axiata: Affordable and Purpose-built IoT Solutions for Industries in Emerging Markets

Highly Commended – ZTE:  ZTE NMVP Solution

 

Innovating in the Cloud 

Winner – MYCOM OSI: The Assurance Cloud

 

Managed Services Innovation of the Year            

Winner – Ericsson and Telenor: Common Delivery Center for innovative Managed Services model

Highly Commended – Saudi Telecom Company: STC Fixed Network Customer Operations Service transformation

 

Mobile Device Innovation           

Winner – Reliance Jio Infocomm: JioPhone

 

Mobile Money Mastery 

Winner – AsiaHawala and Comviva: AsiaHawala powered by mobiquity Money

 

Most Innovative Cloud Service  

Winner – Tata Communications Transformation Services: Cloud Networking and Security as a Service

Highly Commended – Red Hat: Red Hat open hybrid cloud technologies

 

Project Delivery Perfection         

Winner – ZTE: ZTE for China Mobile ‘He-Fetion’ Project

Highly Commended – X by Orange: X by Orange with Red Hat

 

Security Solution of the Year      

Winner – Mobileum Signalling Firewall

Highly Commended – CUJO AI: AI-powered cybersecurity technology

 

Telecoms Transformation            

Winner – Huawei: NFV-SDN based telco cloud technology initiative

Highly Commended – ZTE: 5G Slicing Wholesale Solution for New B2B2C Business Model

 

FCC wants to use state muscle to ban Huawei and ZTE even more

What little presence Chinese vendors still have in US networks will be further eroded by a new initiative from the US regulator.

Federal Communications Commission Chairman Ajit Pai (pictured) announced at the World Radiocommunication Conference that the FCC will soon vote on a move to deny federal funds to any company that does business with any company that poses a national security threat.

Right now US operators get some state wonga from something called the Universal Service Fund, which is positioned as a pot of cash to ensure everyone in the US is connected. Any time a company is dependent on the state for funds, however, that leaves it vulnerable to state intervention in its business and that seems to be what Pai has in mind. Suddenly universal service is secondary to geopolitics.

With the usual preamble about how Chinese companies are compelled to assist their government in its spying operations, Pai said he thinks even more needs to be done to counter that threat to US national security.

Recognizing this risk, today, I’m circulating an order that would prohibit the use of Universal Service Fund dollars to purchase equipment or services from any company—like Huawei—that poses a national security threat,” said Pai. “Going forward, we simply can’t take a risk when it comes our networks and hope for the best.”

In the process of examining this issue, I also determined that the FCC needs to take a look back, so to speak. That’s because some rural wireless carriers that receive USF funds have already installed Chinese equipment.  So, I’m proposing that the Commission initiate a process to remove and replace such equipment from USF-funded communications networks.

“My plan calls first for an assessment to find out exactly how much equipment from Huawei and another Chinese company, ZTE, is in these networks, followed by financial assistance to these carriers to help them transition to more trusted vendors. We’ll seek public input on how big this “rip and replace” program needs to be and how best to finance it.  I hope that my colleagues will join me in voting for these important steps to protect our national security at our November 19 meeting.”

Public funds are a two-way street, you see. They can be taken away if you’re bad, but increased it you’re good. We don’t know how substantial the USF is, but operators could always just forgo that cash if they really felt like using Chinese gear, we suppose. However they would then find themselves on a governmental naughty list and presumably face all sorts of other state sanctions, so will probably decide discretion is the better part of valour when it comes to doing what they’re told in this case.

ZTE gains confidence on the back of solid earnings growth

Perhaps ZTE has just been enjoying an uncomfortable silence and an expensive milkshake in recent months, but its financials for the first half of 2019 are screaming for attention.

It is quite difficult to measure the performance of the business looking at the financials alone, ZTE found itself in the Trump crosshairs in H1 2018, though the team is hyping itself up now, seemingly to gain attention in a very noisy segment. ZTE is often overlooked when considering the major network infrastructure vendors, but it certainly does warrant mention.

Revenues for the first half of 2019 stood at roughly $6.23 billion, up 13.1% year-on-year, profits increased a massive 118% to $210 million. The team is now forecasting profits between $530-640 million for the first nine months of the year.

These numbers might sound very impressive, but it was at this point last year when President Trump and his administration targeted ZTE. In May 2018, ZTE announced its major operating activities had ceased after the US Department of Commerce’s Bureau of Industry and Security (BIS) placed an export ban on the vendor. Without the US complement in the ZTE supply chain, the firm was almost extinct, though concessions were made and now it appears it is business as usual.

This is why the year-on-year gains are largely irrelevant. ZTE was a shell of a company at this point last year, fighting for its very survival.

That said, the company is surging towards the 5G finish line just like its rivals, and now it needs to convince potential customers it is a stable, reliable and innovative partner. Being selected to supply equipment to any telco will be after intense scrutiny, and thus the charm offensive has begun.

First of all, lets start with the R&D spend. ZTE has suggested it has spent roughly $900 million on R&D for the first six months of 2019, a 14.5% ratio of the total revenues for the period. This is an increase from the 12.8% share of the same period of 2018, with the new figure just ahead of the 13.8% share of revenues (estimate) Huawei allocated to R&D last year. The domestic rival has promised to increase this figure by 15-20% for 2019, though the overall percentage will not be known until the full year financial figures are known.

In comparison, Ericsson said it attributed 18.5% of net sales revenue to R&D over the course of 2018, a figure which increased to 18.7% by the end of the first six months of 2019. At Nokia, 18.4% of net sales revenues were directed towards the R&D department for the first six months of this year.

This part of the business has largely been focusing on the development of basic operating systems, distributed databases and core chipsets most recently. The company has completed the design and mass production of the 7nm chipsets, while it is currently undergoing the R&D phase for 5nm chipsets.

All this work has resulted in 3,700 5G patents being granted to the firm, though this number might notably increase in the near future. ZTE has also said it is partnering with various Chinese universities to source 5,000 new employees to bolster the R&D ranks. Once again, these are numbers which are being cast into the public domain to enhance the reputation of the business at a time where vendors are facing scrutiny at an unprecedented level.

Of course, when we are talking about creating a perception of stability and reliability, as well as increased scrutiny, you have to discuss security.

ZTE might have managed to avoid US aggression over the last couple of months, Huawei has been the primary target, but as a partly state-owned entity, such questions will never be that far away. This is where the cybersecurity centres will play an important role.

Opened in Nanjing, Rome and Brussels, the cybersecurity centres will allow potential customers to test and validate the security credentials of the firm prior to installing any equipment or software in the network. Some will not be convinced this is a fool-proof way to ensure resilience, though it is an act of transparency which the industry and governments have been crying out for.

The result of this work is 60 memorandums of understanding (MoU) with telcos around the world, 50 5G demonstrations in 20 industry verticals, 300 strategic collaborations and 200 5G products to date.

It is often easy to overlook ZTE and designate the firm as a poor man’s version of 5G network infrastructure, but the numbers justify inclusion at the top table. The challenge which ZTE now faces it making prominent strides into Western markets, the very ones which are getting twitchy over security and price today.

The barren years are forecast to end as 5G profits close in

Research from Gartner suggest the 5G spending boom is almost within the grasp of the beaten and battered vendors, with 5G infrastructure spend set to increase by 89% over the next 12 months.

The last three to four years have been a frustrating time for most of the network infrastructure vendors. Those selfish telcos halted the lavish spending on 4G infrastructure, choosing to try and muscle some ROI to keep investors happy, while 5G has seemingly been hovering on the horizon for an age and a day.

“5G wireless network infrastructure revenue will nearly double between 2019 and 2020,” said Gartner’s Sylvain Fabre. “For 5G deployments in 2019, CSPs are using non-stand-alone technology. This enables them to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G core network infrastructure.”

Gartner is forecasting 5G spend from the CSPs will increase to $2.2 billion over the course of 2019, up from $612 million last year. In 2020, this number will jump 89% to $4.1 billion and then up-to $6.8 billion in 2021. There will of course be a significant spend on maintaining and improving 4G networks, though the vendors will want to gain returns on 5G R&D sooner rather than later.

The next two years are expected to be an increasingly aggressive scrap between the network vendors to secure valuable 5G contracts. With early launches of 5G networks in the UK, US, South Korea, Italy and Switzerland (amongst others) taking place this year, there will be a horde of fast followers over the next 12-18 months, before everyone else starts to catch-up.

These deployments will of course be focused on the larger cities to start with, though it won’t be long before some telcos start scaling. However, what is worth noting is the nationwide deployment of 5G will not be as fast as previous ‘Gs’.

“To maintain average performance standards as 5G is built out, CSPs will need to undertake targeted strategic improvements to their 4G legacy layer, by upgrading 4G infrastructure around 5G areas of coverage,” said Fabre. “A less robust 4G legacy layer adjoining 5G cells could lead to real or perceived performance issues as users move from 5G to 4G/LTE Advanced Pro.”

Although 4G spend will also increase to prepare the underlying networks for 5G, few of the vendors will complain as long as the dollars start flowing into their banks accounts not out of them. It does appear the barren years might be coming to a close.

And for the network vendors, the moment of 5G euphoria will bring with it a sense of relief, as you can see from the financial figures below.

2015 2016 2017 2018
Huawei Revenue 55.736 73.594 85.171 105.191
Net income 5.208 5.228 6.695 8.656
Ericsson Revenue 25.56 23.04 21.26 21.82
Net income 1.42 0.2 (0.65) (3.35)
Nokia Revenue 29.537 26.583 25.697 25.049
Net income 3.205 2.411 0.017 (0.065)
Cisco Revenue 12.8 12.6 12.7 12.8
Net income 2.3 2.8 2.4 3.8
ZTE Revenue 14.136 14.284 15.353 12.066
Net income 0. 527 (0.198) 759 (0.98)
Juniper Revenue 4.857 4.990 5.027 4.647
Net income 0.633 0.601 0.306 0.566

Figures in US Dollars (Billions), taken from Annual Reports

It is also worth noting that some of the numbers in this table are slightly misleading. For example, during the period above Huawei’s smartphone business surged, while Nokia’s numbers also include fixed line revenues. We’re not exactly comparing apples with apples; however, you can see there is a general slow-down across the vendor community.

Aside from a few exceptions, many of the figures above are not the end of the world. Executives will point to over-arching trends and suggest that while there is no growth, maintenance of revenues (or managing a slight decrease) is an acceptable performance. However, this cannot go on forever.

The likes of Rajeev Suri at Nokia or Chuck Robbins at Cisco have been keeping themselves employed by pointing towards the 5G bonanza. The telcos are sweating 4G assets for ROI while making preparations for the world of 5G; profits are on the horizon for many of these firms, they just need to hang-on a little bit longer.

You do get the impression some investors are starting to get a bit frustrated with the continued quest through the barren connectivity desert, though if Gartner is to be believed, there is an Oasis forming on the horizon. Let’s hope

ZTE claims first 5G smartphone in China

ZTE seems to have beaten its many Chinese smartphone competitors to the first domestic 5G commercial launch.

The announcement was only made in Chinese, but that was no problem for us as we’re able to call upon the translation services of Telecoms.com Intelligence Manager Wei Shi. It looks like ZTE has simply whacked a 5G modem into its Axon 10 flagship smartphone – specifically the Qualcomm Snapdragon X50M – which makes you wonder why the likes of Huawei, Xiaomi and Oppo haven’t done the same.

The phone supports all three of the big Chinese MNOs and its microSD slot doubles as a second SIM slot, which might help ZTE shift a few more units. ZTE has picked an interesting time to make an aggressive move on its domestic market, with Huawei apparently doing the same in response to all the grief its getting elsewhere in the world.

While it’s fair to assume mot other Chinese vendors will perform this same Snapdragon X50M move soon, Huawei seems to prefer its own silicon in China, so that could present a competitive challenge as 5G ramps up. We’ll leave you with some of ZTE’s marketing.

ZTE 5G phone 2