5G – Deployment and Commercial...

5G – Deployment and Commercial Considerations

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2 TMT intelligence informa © 2017 Ovum. All rights reserved.

CONTENTSSummary.............................................................. 3

In brief .............................................................3

Ovum view .......................................................3

Recommendations ..........................................3

5G network considerations and options .............. 4

5G provides the widest range of spectrum options that mobile operators have ever had .................................4

There is more than one way to deploy 5G ......4

Massive MIMO is key to improving both coverage and capacity .....................................7

Cloud RAN and preparing LTE for 5G .............8

Preparing the transport network for 5G ........9

5G ecosystem ..................................................... 10

Strong vendor support for 5G .......................10

Antennas are now more important than ever ........................................................10

Chipset vendors are getting ready for 5G ....11

ABOUT THE AUTHOR

© Copyright Ovum 2017. All rights reserved.

The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited.Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content.Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited.

Daryl Schoolar, Practice Leader

Daryl covers the wireless infrastructure space at Ovum, with a primary focus on market activities as they apply to the radio access network (RAN). RAN coverage includes macro-, micro-, and picocell solutions for CDMA EVDO, HSPA/HSPA+, LTE (TDD and FDD), and LTE-Advanced. Daryl’s research includes not only what infrastructure vendors are developing, but how mobile operators are deploying and using these wireless networking solutions. Daryl also leads Ovum’s Next-Generation Infrastructure team. That team covers all access technologies, fixed and mobile, along with operator trends with network transformation around NFV and SDN.

As an industry analyst, Daryl has been involved in such projects as helping technology vendors develop use cases for new products and services, identifying new technology trends, and providing market sizing and market share support. He regularly speaks at industry and vendor events on trends impacting the wireless infrastructure market. He is also sought out by trade publications to comment on mergers and acquisitions, new product announcements, and market developments as they relate to his coverage area.

3TMT intelligence informa© 2017 Ovum. All rights reserved.

Ovum view•Thecapacitygainsofferedby5Gareimportant,butsoisnetworkcoverage.Mobilenetworksneedbroad

coverage to attract subscribers and gain device manufacturer support. •Themostcommonbandforinitial5Gdeploymentswillbe3.5GHz.UsingmassiveMIMO(multipleinput

multiple output) and beamforming, 3.5GHz can offer coverage that is comparable to that of the already commonly used LTE band of 1800MHz.

•MassiveMIMOisoneofthemostimportanttechnologiescomingfrom5Gbecauseitcansignificantlyaddto spectral efficiency and can be used with all 5G and LTE spectrum bands.

•5Gnetworksareaboutmuchmorethanjustanewradio.5Gwillbringchangesintheareasofnetworkvirtualization, Cloud RAN, and massive MIMO. Mobile operators can start working on those changes before they deploy 5G.

Recommendations•Mobileoperatorsneedtostartbuildingtheir5Gbusinessplans.Havingasolidbusinessplanwillhelp

them in making network deployment decisions.•Priortodeploying5GNewRadio(NR),mobileoperatorsshouldtakestepstogetthenetworkreadyas

well as deploy LTE technologies that will be used with 5G. Network changes include transformation from a hardware-centric network to a virtualized software-centric network. As part of the virtualization process, operators should start down the path to a Cloud RAN architecture by at least centralizing some parts of the 4G network.

•OperatorsneedtocontinuetoinvestintheirLTEnetworks,becausethesenetworksstillhavealonglifeexpectancy. Initial 5G networks will be spotty. Pushing LTE capacity to 1Gbps will help create a more consistent user experience in those areas that lack 5G coverage.

•Mobileoperatorsneedtoworkwithregulatorycommissionstoidentifyandmakeavailable5G-capablespectrum.

SummaryIn briefIn a few years, operators will start rolling out commercial, standards-based 5G networks. In doing so, these operators will face a variety of deployment scenarios based on spectrum and other various factors. The deployment decisions they make will impact what the network looks like and the types of services offered. Operators need to understand the trade-offs that come with different 5G options. Given the different factors involved, operators today are gravitating toward deploying their initial 5G networks using the 3.5GHz spectrum band. By using new antenna technologies, 3.5GHz gives operators the best balance between coverage and capacity, both of which will be needed to build a robust 5G business.


5G network considerations and options5G provides the widest range of spectrum options that mobile operators have ever hadOne of the big advantages of 5G compared to previous mobile technologies is spectrum. 5G supports a wider range of spectrum bands than any previous mobile generation. Figure 1 below shows the wide range of 5G spectrum possibilities.

With spectrum, however, there are very pronounced trade-offs. Lower spectrum bands have strong propagation capabilities and are ideal for building out network coverage and penetrating buildings. The main drawback of these bands is capacity. There is not as much spectrum in the lower bands, and given that with any mobile standard there is a fixed bit-per-hertz capability, the amount of available spectrum significantly impacts network capacity. The reverse of this is true with higher bands.

As 5G pushes into mmWave spectrum above 6GHz, capacity dramatically increases. The size of those spectrum bands will provide immense network capacity and make it possible for operators to have multigigabit network speeds. However, those signals will have limited range and will be subject to greater atmospheric and environmental interference. The mmWave bands are great for added capacity, but are not suitable for building out a nationwide network.

There is more than one way to deploy 5GThe 5G network is not a singular thing. There is more than one possible network architecture for 5G so one operator's 5G network very likely will look different from another's. Secondly, spectrum choices greatly influence what the network looks like.

Nonstandalone and standalone radio access network architectures5G theoretically can have 12 different network deployment options. However, the standards process will eliminate some of these. Other options that do pass through the standards process might not be deployed for many years, if ever. The different options come out of how the LTE and 5G networks are coordinated and how the radio access network connects to the mobile packet core.

The first iteration of 5G will be what is called nonstandalone architecture. In nonstandalone architecture, the 4G LTE network will provide the mobile packet core and network control plane. 3GPP is expected to

400MHz 3GHz 6GHz 10GHz 30GHz

Traditional mobile spectrum bands,including LTE New spectrum expected to be made available for 5G

90GHz

Continuous coverage, high mobility, and reliability Higher capacity and massive throughput

Figure 1: 5G spectrum

Source: Ovum


standardize this version of the 5G NR by the end of 2017. This 5G architecture is one way mobile operators will continue to leverage their LTE investments. Figure 2 shows nonstandalone 5G NR options.

The other option is standalone. With standalone, the 5G NR connects to the 5G packet core and the 5G radio provides both the control and data planes. Standardization of this option is not expected until June 2018. With the standalone option, the network can support advanced 5G features, such as network slicing, from day one. It also has the smallest impact on the existing 4G commercial network, making it easier to deploy, and has better network performance than the nonstandalone option.

Building for coverage and building for capacity will look very differentAs discussed earlier, some spectrum bands are better for coverage, while others are better for capacity. An operator's accessible spectrum will play a big part in how the operator's network looks.

A 5G network built for coverage will use macro cells, with the goal of covering many people and large geographic areas. Conversely, a network built for capacity will have a much smaller footprint.

5G networks based on high spectrum will have limited coverage/footprint due to propagation. Because of this, those networks will have a targeted deployment scheme. The operator will deploy 5G in places that need a capacity boost, such as dense metro areas, or for very targeted enterprise applications.

Ideally, operators will use a mixture of low-, mid-, and high-band spectrum for their 5G networks to balance the needs for both wide coverage and high capacity. However, that will take time, and most operators will initially start with a single 5G spectrum band.

Dotted line = control plane; solid line = data planeEPC = evolved packet core. NGCN = next-generation core network.

“1A”

Option 3/3a/3x: Nonstandalone/ “LTE assisted,” EPC conected

EPC

Option 2: Standalone NR, NGCN connected

Next-gencore

LTE NR

Next-gencore

NR

Figure 2: 5G NR nonstandalone options and standalone option

Source: Ovum


3.5GHz becoming the global 5G spectrum band to provide best of both coverage and capacityOfficially there are no 5G spectrum bands yet. Designation of official 5G spectrum bands will not happen untiltheITU-R'sradiospectrumconferencein2019.But,theresultsofthatconferencewillreflectoperatorand regulator activities taking place right now. And, right now, 3.5GHz, outside of a few countries, is gaining considerable interest as one of the first bands for 5G deployments. Some countries without clean 3.5GHz spectrumareconsideringalternativebandsnear3.5GHz,suchasintheUSwith3700MHz–4200MHz.Ovum,through the second quarter of 2017, has identified 15 markets where 3.5GHz has either been awarded for 5G or been used in trials. Those countries are as follows:•Austria •Greece •Romania•Belgium •Ireland •Slovakia•Canada •Italy •Slovenia•China •HongKong •Spain•Colombia •Hungary •UK

A long-term benefit of 3.5GHz comes from its universality. It can be the initial global 5G band for network roaming. Roaming based on mmWave bands will not be as efficient.

Intheshorterterm,thereareseveralotherreasonsforinterestin3.5GHz.Unlikelowerbands,3.5GHzisrelatively unused. Operators do not have to refarm the spectrum before they use it. This could speed up time to market. Secondly, there is approximately 400MHz of spectrum available at 3.5GHz. The 3.5GHz band runs from 3400MHz to 3800MHz. Depending on the number of operators in a country, they could each have enough spectrum to support multiple gigabits of network capacity.

Coverage is another big consideration with 3.5GHz. With newer antenna technologies, the coverage of 3.5GHz can be comparable to 1800MHz. Coverage remains one of the major underpinnings of a successful wireless technology. With 3.5GHz, an operator can use macro sites, even reusing some existing sites, to build its 5G network. This is much more cost efficient than building out large-scale coverage using small cells. Beyond the cost consideration, better coverage means more subscribers.

Having more subscribers naturally leads to lowering of ecosystem costs for devices and network gear as end-user demand increases. And, ongoing cost declines continue to feed the cycle of expanding coverage and increasing service uptake.

Networkcoverage

Ecosystemcosts

Serviceuptake

Figure 3: Relationship between network coverage, service uptake, and ecosystem costs

Source: Ovum


Massive MIMO is key to improving both coverage and capacityA big part of 5G's performance improvements will come from massive MIMO. MIMO itself is not new. LTE networks use 2 x 2 and 4 x 4 MIMO antennas. Some TDD networks have gone a step further with 8 x 8 MIMO.

With massive MIMO, the industry does not clearly define what is massive and what is not. However, for TDD bands, the consensus is that for an antenna solution to qualify as "massive," it must have at least 32 R (receive) and 32 T (transmit). Vendors have even started demonstrating 128 x 128 MIMO. For FDD, due to some technical limitations on the feedback channel and size of antenna needed for lower bands where one finds FDD, massive MIMO is more limited. The ultra-low bands (sub-1GHz) might only reach 16 x 16 MIMO. Above 1GHz, FDD is more suitable for massive MIMO; plans are already in place for 32 x 32 MIMO in this spectrum range.

With massive MIMO also comes beamforming. With beamforming, the power of the radio signal can be focused on the end user. Figure 4 below provides an illustration of massive MIMO and beamforming.

Massive MIMO benefits the network in terms of both capacity and coverage. The extra transmission streams coming from the additional antenna elements allow for the transmission of more data without increasing the spectral capacity. In other words, a 20MHz channel of spectrum can transmit more data quicker using 64 different antenna paths than it would with 4 antenna paths. Appling massive MIMO to larger spectrum channels found in the 3.5GHz band will bring even greater capacity improvements to that band.

Beamforming improves coverage by focusing the transmit power on the end user, instead of spreading the transmit power throughout the cell area. With beamforming, the end user is always in the optimal signal area within the cell, in contrast to older passive antenna technologies where there is no targeting of the radio signal. The concentration of the signal power extends the signal range. The enhanced coverage coming from beamforming is why 3.5GHz using massive MIMO is expected to have network coverage like that of LTE using 2T2R MIMO in the 1800MHz band. Massive MIMO enhances the already attractive properties of 3.5GHz, making it ideal for initial 5G deployments.

Horizontalbeamforming

Verticalbeamforming

Massive MIMO simultaneously supports three-dimensional beamforming and MU-MIMO

Figure 4: Massive MIMO

Source: Ovum


Cloud RAN and preparing LTE for 5GLTE will have a long life after 5G, no matter what spectrum 5G initially uses. There are many reasons for this: operators want to maximize their LTE investments by operating the network for as long as possible; initial 5G networks will have spotty coverage and need LTE for fallback; and there is a large embedded base ofLTEdevices–bothsmartphonesandIoT–thatneedtobeserviced.Inthenearterm,ofcourse,the5Gnonstandalone NR requires LTE for the control plane and packet core.

5G and its convergence with the existing LTE network will require changes in the mobile network architecture. This is most evident with virtualized and Cloud RAN.

Network virtualization involves separating software from proprietary hardware boxes and deploying the software on common X86 computing platforms. With RAN virtualization, unlike with other virtualized network functions, the base station is not entirely virtualized. The radio and real-time low-latency functions ofthebasebandunit(BBU)remainastheyare;onlythenonreal-timefunctionsoftheBBUarevirtualized.Cloud RAN's role should be to manage and orchestrate all the virtualized resource and nonvirtualized resource base station functions.

Cloud RAN is a 5G-oriented wireless access network architecture using both network virtualization and networkcloudtechnologies.CloudRANsupports5GCU(CentralizedUnit)andDU(DistributedUnit)withflexible deployment models. It also supports 4G network virtualization / cloudification evolution based on a software-defined radio platform. Besides that, Cloud RAN coordinates multiradio access technology, multiband operation, and load balancing to harmonize the coexistence of 4G and 5G, which provides a better access experience for users, maximizes network efficiency, and enables the integration of new and diverse services.

Figure 5 provides an example of what a Cloud RAN deployment could look like. The cloud at the upper rightrepresentsthevirtualizedCU.Thepurplecirclesconnectedtoitillustratethe5Greal-timeDUfunctionsandradioheads.Theothernon-5GbasestationsareconnectedtothevirtualizedCUaswellfor coordination. This includes the distributed LTE base station in blue and a centralized LTE base station showninred.The5GvirtualizedCUisliketheradionetworkcontrollerfoundin2Gand3Gnetworks.Asthis illustrates, Cloud RAN is more than just a virtualized RAN; it is an entirely new architecture.

Even before 5G reaches maturity, operators should take the following steps to prepare their LTE networks for 5G:•Push LTE performance to 1Gbps.Usingexistingtechnologiesintheareasofcarrieraggregation,256QAM

modulation, and massive MIMO, mobile operators can achieve 1Gbps of capacity on their 4G networks. Given the uneven nature of initial 5G coverage, the LTE network will need to match 5G performance as much as possible to give the end user a consistent experience.

• Start down the path of core network virtualization. Many operators have already started implementing NFV technologies in their core network, principally in terms of virtualized EPC (vEPC). The 5G core network will be fully virtualized to support new 5G features, such as network slicing. Starting with that level of virtualization now will make implementing 5G easier. Standalone 5G NR cannot be implemented until the core is virtualized.

•Explore mobile edge computing (MEC). MEC allows for the distribution of some formerly centralized network functions to be pushed to the edge. MEC can support network slicing, such as putting part of the packet core near the access network to lower latency for ultra-reliable and low-latency communications. While MEC is not fully standardized, operators should use this time prior to 5G reaching maturity to engage their vendors on MEC and start trialing it.


Preparing the transport network for 5G5G applications and architecture bring new challenges to the underlying transport network. New 5G applications will demand higher-speed connectivity, lower latency, edge computing resources, and a factor-of-100 increase in IoT devices. This in turn drives dense deployment of remote radio units, mobile edge computing, and flexible deployment between distributed and centralized RAN based on the application. Due to the low-latency requirement and different deployment scenarios, 5G transport needs to address a different mix of connections for fronthaul, midhaul, and backhaul. The new fronthaul interface depends on Ethernet and IP to make the transport network more efficient than traditional Common Public Radio Interface (CPRI), while meeting very tight latency requirements. The midhaul and backhaul solution will dealwiththeflexibleconnectionsamongtheDU,CU,and5GC.5Gwillalsobringnetworkslicing,whichwill support the addition of virtual functions to wireless applications. To address these changes, carriers will have to use a mixture of transport network technologies consisting of microwave, IP switch and router products, passive optical networking, and optical networking products. The solutions will need to support at least 10Gbps on the client side with up to 100Gbps and beyond on the line side.

5G(NR & LTE-E)

LTE-E

LTE-E

CPRI

L2 low

L2 high

L3

L3

L2

L1

L3

L2

L1

L1

Figure 5: Cloud RAN

Source: Ovum


Mobileoperatorsneedtoplannowforthetechnologiesneededtosupport5G.Keynewtechnologiesinclude Flex Ethernet (FlexE), segment routing, time-sensitive networking, and SDN. FlexE will allow for a carrier to deliver multiple 100/200/400Gbps connections as one bundle and to slice an Ethernet connection into separate virtual networks for multitenancy, enhanced mobile broadband (eMBB), ultra-reliable low-latencycommunication(URLLC),andmassivemachine-typecommunications(mMTC).FlexEworkswithSDN control and segment routing to control latency across the network for different applications. Finally, carriers will need equipment that supports the frequency and phase synchronization among sites, since most candidate 5G spectrum works under TDD mode.

A final consideration for operators as they deploy 5G is backwards compatibility to legacy 4G. Some equipment vendors will support 4G fronthaul with CPRI while also supporting the low-latency IP/Ethernet solutions for 5G fronthaul with a new interface. Capital expenditures are always constrained, so carriers will be looking for cost-effective solutions.

5G ecosystemStrong vendor support for 5GThe success of any wireless standard is heavily predicated on the strength of its ecosystem. Without multivendor support, a standard most likely will not thrive. Operators want to know they are not locked into a single vendor for their networks. Competition within the ecosystem also benefits operators because it pushes vendors to continually refine the network offerings and improve performance. 5G, while not fully standardized yet, already benefits from a strong ecosystem. Vendors are already actively marketing their pre-5G/5G-ready solutions.

Table 1 below shows where vendors are currently supporting 5G or are expected to support 5G. Base station support across the vendors is, of course, universal. What is not universal is support for backhaul and 5G-ready devices. Ericsson does not offer 5G-ready optical networking gear, and Samsung offers neither microwave nor optical. Ericsson and Nokia are not expected to have 5G devices, other than CPE for fixed wireless access networks. End-to-end support is not necessary to supply a 5G network, but having an end-to-end solution helps a vendor communicate that it has deep understanding of the demands of 5G throughout the entire network and not just part of it.

Antennas are now more important than everUntilrecently,antennaswereanafterthoughttothemobilenetwork.Everybasestation,ofcourse,neededan antenna, but antennas were rarely included in discussions about mobile networks. That has now changed. New antenna technologies are a major part of the 5G story. As discussed in the massive MIMO section, antennas and beamforming technology will improve both network capacity and coverage. As the air interface for 5G is expected to only offer around 20% improvement over the LTE air interface, increased network capacity will come in the form of larger spectrum channels and new antenna technologies. 5G vendors must now be just as strong in antennas as they are in the other domains of the mobile network.

Table 1: Vendors’ overview of end-to-end 5G portfolios

Operator Massive MIMO 5G base station Microwave Backhaul/fronthaul Packet core Devices

Ericsson Yes Yes Yes No Yes No, but works with partners on CPE

Huawei Yes Yes Yes Yes Yes Yes

Nokia Yes Yes Yes Yes Yes Yes (CPE only)

ZTE Yes Yes Yes Yes Yes Yes

Samsung Yes Yes No No Yes Yes

Source: Ovum


Chipset vendors are getting ready for 5GChipsetvendorsIntelandQualcommhavejoinedwithinfrastructurevendorstopushthedevelopmentof5G. They are both active in standards bodies and are developing the chipsets that will eventually go into various5Gdevices.WhileQualcommitselfdoesnotbuildnetworkhardware,itisactiveindevelopingthetechnology that goes into that hardware. The same goes for Intel.

In2016,QualcommannouncedtheSnapdragonX50asitsfirst5Gmodemforhandsets.InOctober2017,thevendor announced it had completed a trial of a prototype handset using the X50. It exceeded gigabit speeds in the downlink using the 28GHz band. The vendor plans to provide operators the chipsets to trial in 2018 and expects commercial handsets will be available in the first half of 2019.

Intel, for its part, announced a 5G mobile network trial platform in September 2017. The trial platform will allow for the interoperability testing of its 5G modem chipsets with different network and device partners. Thebandssupportedbythetrialplatformare600MHz–900MHz,3.3GHz–4.2GHz,5.1GHz–5.9GHz,28GHz,and 39GHz. The vendor has been working with some of the operators at the forefront of 5G deployments, includingKTandSKTelecominSouthKoreaandVerizonandAT&TintheUS.Intel's5GmodemswillbepartoftheSouthKoreaOlympics'5Gtrialin2018.

ABOUT OVUMOvum is a market-leading data, research and consulting firm focused on helping digital service providers and their technology partners thrive in the connected digital economy. Through its 150 analysts and consultants worldwide, it offers expert analysis and strategic insight across the IT, telecoms, and media industries. Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate, and insightful market data, research, and consulting. With 23 offices across six continents, Ovum offers a truly global perspective on technology, communications and media markets and provides clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits, and opinion.

Ovum is part of the Business Intelligence Division of Informa plc, a leading business intelligence, academic publishing, knowledge and events group listed on the London Stock Exchange.

For more details on Ovum and how we can help your company identify future trends and opportunities, please contact us at [email protected] or visit ovum.informa.com. To hear more from our analyst team join our Analyst Community group on LinkedIn and Twitter.

ABOUT ZTEZTE Corporation is a global leader in telecommunications and information technology. As part of ZTE’s M-ICT strategy, the company is committed to provide integrated end-to-end innovations to deliver excellence and value to consumers, carriers, businesses and public sector customers around the world, enabling increased connectivity and productivity to unlock the power of technology for society. Founded in 1985, ZTE is listed onboththeHongKongandShenzhenStockExchangesandisChina’slargest-listedtelecommunicationsequipment company.

With the industry’s most comprehensive product range and end-to-end solutions, ZTE offers cutting-edge wireless,access&bearer,value-addedservices,terminalsandmanagedservicestotelecommunicationscarriers, in addition to ICT solutions for enterprises and government agencies. ZTE’s advanced capabilities enable leading telecommunications operators and Fortune 500 enterprises in more than 160 countries to achieve business objectives and attain increased competitiveness.

AsamemberoftheUNGlobalCompact,ZTEiscommittedtoavisionofbalanced,sustainabledevelopmentin the social, environmental and economic arenas. Promoting freedom of communications around the world, the company has incorporated innovation, technological convergence and the concept of "going green" into theproductlifecycle.ThisincludesR&D,production,logisticsandcustomerservice.Thecompanyalsoiscommitted to maximizing energy efficiency and minimizing carbon emissions.

With Corporate Social Responsibility (CSR) a key priority for the company, ZTE played an active role in relief efforts following events such as the 2015 earthquake in Nepal. ZTE also established the ZTE Special Children Care Fund, the largest charity fund of its kind in China.

Looking forward, ZTE is committed to pursue the company’s M-ICT strategy together with our customers and partners, and drive innovations in telecommunications and ICT globally as the business and technology needs of the industry continue to evolve.

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