Transcript Competition and Innovation in Mobile Networks * still a future for

Competition and
Innovation in Mobile
Networks – still a future for
incumbents?
HENRIK GLIMSTEDT, ASSOCIATE PROFESSOR
STOCKHOLM SCHOOL OF ECONOMICS, AND THE AIR.NET
Instead of Answers: Hard Questions
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How will cloud-based M2M (a.k.a. Internet of Things) transform the
infrastructure business?
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Is there still a future for incumbents (e.g. NSN/Alcatel, Ericsson, Huawei, ZTE)
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Plan for my 10-15min
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Give you an idea of links between cloud and 5G system
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Blend-in: SDN tech
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Vendor positions in cases: AT&T and Verizon cloud solutions
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Sketch the competitive landscape: competitors and complementors
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Traditional strength of telecom equipment vendors (2G-4G): are they still relevant?
Still fun to be a mobile operator?
• Smartphone subscriptions will more than double by 2020, reaching 6.1 billion.
• By 2020 80 percent of all mobile data traffic will come from smartphones.
• Video traffic to grow 55 percent per year until 2020, driven by OTT video streaming,
and mobile cloud services
Telecom Operator Spending
-by Mobile Operators
Projected Spending 2015-2020
$352 Bn (2,5% growth)
$205 Bn
>$1,500 Bn
Drivers: 2G, 3G, 4G
Drivers: 5G,
Base stations
Core, M2M, capex reductions
Cloud Services Spending
Projected 2015-2015
$143 Billion (3,5% to 10%)
$750- 1,000 Bn
(Source Gartner, IDC and Dell’Oro)
Monthly ARPU
2008
2013
US, EU
$41
$31
Africa
$10
$7
Cloud-Based Mobile Services: drivers
and examples
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Cost-Driven Network Transformation: vendors sell networks ‘as a service’
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Huawei, NSN and Ericsson: all mobile core available “as s service” from 2017
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Radio Access as a Service (a.k.a RANaaS or C-RAN) still in concept studies
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Vendors become cloud service providers of network functions to teleco operators
Teleco’s lead in ‘Managed M2M Networks’, e.g. Verizon, AT&T, Deutsche
Telecom…
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Retail, transport/shipping, automotive, and energy companies (>20% adoption rate
among large companies)
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E.g. Verizon’s platform for BMW Connected Drive
Specialized ‘private clouds’ (a.k.a. verticals)
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Ericsson directly build ‘verticals’ for Volvo Connected Car, Shipping Companies
(Maersk), Medical Sector, Media Sector…
Advanced 4G + M2M + Cloud = 5G!
From 4G to 5G
•
•
•
•
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1000x increase in capacity (true broadband)
100x more connected devices (Internet of Things)
5x less latency (business grade M2M)
without driving CAPEX through the roof
2G through 4G targeted end-consumers
• New technologies
• Heterogeneous networks, incl WiFi
• C-RAN
• Massive MIMO antenna
• 5G is about corporate offerings
Advanced 4G + M2M + Cloud = 5G!
From 4G to 5G
•
•
•
•
•
1000x increase in capacity (true broadband)
100x more connected devices (Internet of Things)
5x less latency (business grade M2M)
without driving CAPEX through the roof
2G through 4G targeted end-consumers
• New technologies
• Heterogeneous networks, incl WiFi
• C-RAN
• Massive MIMO antenna
• SDN and network virtualization
• 5G is about corporate offerings
5G Used Cases by Bandwidth and Delay
Competitors and/or Complementors?
Cloud players
Mobile Telecom players
(OTT delivery, M2M and
public storage)
OTTs: Netflix, Skype, Dropbox, WhatsApp
Cloud
services
Amazon, MS,
Rackspace,
VMware,
versus
AT&T, Verizon, NTT, Orange,
DT..
SDN and
data center
control
HP, Cisco, Artista
Juniper, VMware,
Versus
Huawei, Ericsson, Fujitsu
Hardware
(Blade
HP, Dell, Cisco,
Leveno, Fujitsu
Versus
Huawei, Ericsson, NSN,
Fujitsu, Hitachi
Winners and Losers in AT&T Cloud
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AT&T Domain 2.0 Vendor Program
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SDN-players: Ericsson, NSN (incl Alcatel-Lucent), Fujitsu, Affirmed Network,
Metaswitch, Tail-F
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Cisco, Cienna, Brocade
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SDN moves control intelligence away from hardware (servers and routers)
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Hurts all AT&Ts vendors of networking hardware (Cisco, Cienna, Juniper) as
SDN turns hardware into a commodity controlled by the SDN software.
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Verizon announces vendors in SDN-project
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Alcatel-Lucent, Cisco, Ericsson, Juniper and NSN
3G and 4G as a Opportunity of Entry
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Standard harmonization in CDMA
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Data (IP) in 3G and 4G
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3G pones, HSDPA-modems and smartphones to drive network
sales
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Massive increase in services leads to more IP than TDM-traffic in
networks with less revenues
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Develop cost-efficient wireless backhaul and core IP equipment
Entrants, Exit and Surviving Incumbents
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Major Exits
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1990s: Qualcomm, Bosch + many 1G (analog) RBS and MSC-companies
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Post-Internet Crises: Motorola, Lucent, Nortel, Siemens
Major Entry
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IP and IT: Cisco, Juniper, Cienna, HP…
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Full-Service: Huawei, ZTE, Samsung
Surviving Major Incumbents:
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Ericsson, NSN, Alcatel (now being acquired by NSN)
R&D and Technological Scope
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Must
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excellence in radio (80% of operators CAPEX),
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supporting all global standards (economies of scale and avoiding standard lock-in effects)
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excellence in network core (smaller part of the business but dependent on alliances, e.g, Motorola)
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hardware design capabilities (traffic volumes drive need for spec ASICs)
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system integration and platform capabilities (operators lack R&D)
You may survive by
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…gradually building IP capabilities if you have strong radio (Ericsson and NSN)
It certainly helps if you
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to lead collective standardization and in production of essential IP (build confidence among operator)
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to organize close vertically integrated relationships between standardization, long-term R&D and
platform strategies (Ericsson’s long-term strength)