Off to the races: 5G beyond buildout
“We bet on the right horse choosing Nokia” a customer shared his feedback in a recent meeting after my update on Nokia’s 5G portfolio. We’ve received similar recognition from other customers too: “Congratulations on the catch-up in 5G,” “We of course monitor our customers’ experience and in Nokia-supplied networks it has been excellent,” “Nokia is back in 5G.”
And indeed, in 5G, we can see great performance development. Using Tutela Technologies’ crowdsourced data from a major operator in South Korea we have seen the gains in performance realized with our new software release upgrades, where we outperform the competition in network downlink throughput. In another example, when measuring end-user experience behind basic KPI’s, we can see that Nokia’s footprint area provides excellent end-user experience with video conferencing and cloud gaming services evaluated to be very good quality, while also receiving the lowest percent of bad test samples.
This builds on the consistent data we’re seeing from Tutela which shows that Nokia 4G also leads in performance with the best average downlink (DL) and uplink (UL) data throughput speed. Tutela gets this data from network performance KPIs in the background from many popular apps in iOS and Android devices, with tens or hundreds of millions of data points, even billions of data points showing real traffic profiles. We recently gathered Tutela data across 37 countries and 236 cities, from start of May to end of September this year, and saw the superior performance described above.
The new 5G portfolio we’ve launched this year continues our promise to deliver and further improve the performance of our networks:
- We’ve launched our new AirScale radios, including the industry’s lightest high-power, 400MHz 32TRX Massive MIMO. These radios contribute to our 50 percent reduction in power consumption of Massive MIMO radios from 2019 to 2023.
- Our AirScale baseband is the industry benchmark for flexibility and capacity. It also comes with significantly improved energy efficiency, reducing the baseband power consumption by up to 75 percent. This also contributes to our commitment to halve base station power consumption by 2023.
- We’re on track to power our full portfolio with latest ReefShark System-on-Chips by the end of 2022.
- And this year, we brought together our software to a common development trunk, meaning updates to software from 2G to 5G in a single release, bringing our customers the speed and quality they need.
Where we are now is the result of hard, focused execution on our strategic priority to build 5G technology leadership and improve our portfolio competitiveness over the past three years. Coupled with industry-leading SON and network management, as well as digitalized services boosting the speed and quality of deployments, we have a good racehorse now.
I’m extremely proud to see how far we’ve come, as shared earlier today with the leading analysts in our industry at Nokia’s Global Analyst Forum (GAF). When we last held an event like this two years ago my presentation was called “making 5G happen worldwide”. The 5G market was in the very early stages then. Since that presentation, not only has our technology advanced, but so has the market. We’re now roughly at the moment where the volume of shipments of 5G technology are overtaking the volumes of 4G. What’s more, we see that the 5G market will have an extended peak with the private wireless networks market showing promising growth.
So how will the market continue to develop? We see 5G evolving commercially in three distinct waves. In many markets we see a transition from Non-Standalone (NSA) to Standalone (SA) 5G networks. Referencing Global Mobile Suppliers Association (GSA) data from September, at least 15 operators around the world had already launched commercial public 5G SA networks. We can now see a clear path towards mass-market standalone deployments, with 3GPP release 16 as the enabler of ultra-reliable low latency communications and industrial Internet of Things (IIoT).
We can also see a clear transition in our customers’ focus. Whereas time to market, speed, and access to spectrum had dominated discussions previously, the focus is now shifting to 5G becoming a true business engine. Managing operating expenses (OPEX) and total cost of ownership (TCO) as well as capacity is critical. Our customers are also exploring new 5G revenue opportunities as they look to ensure their customers receive the best possible experience.
South Korea provides a great example with strong growth in 5G subscribers and good take up of new services with one operator showing monthly 5G data usage being 2.8 times the amount of data used on LTE. All operators in South Korea have also reported that the majority of their subscribers take up some of the higher-priced 5G bundles driving stronger revenue uplift, according to data shared by the South Korean Ministry of Science & ICT.
If we compare the numbers two years after 4G/LTE was launched, overall, 5G adoption is beating that of 4G/LTE although 5G penetration still remains low in some markets. Countries like South Korea or China may be off to a good start, but we see mixed progress across markets, with for example, US and Europe clearly lagging behind. Nokia supplies to approximately 40 percent of 5G networks today, in half of the countries with live 5G.
Preparing for the future opportunities starts now. Undoubtedly, one key focus area continues to be Open RAN. Nokia is the leading contributor in the O-RAN Alliance and our new AirScale portfolio is already O-RAN ready, supporting our efforts to develop cloud-based, open approaches to building networks. This is all happening in tight cooperation with our customers like NTT Docomo, or Deutsche Telecom with whom we just announced opening a new open lab "i14y" to accelerate network disaggregation and Open RAN. There are many steps to build the O-RAN ecosystem, and we expect this to develop over the coming years but would not expect real commercial deployments before 2023 (perhaps earlier for some trials).
Network efficiency and optimization utilizing 4G/5G slicing, AI/ML and continuously improving energy efficiency are also key focus areas as we continue to enhance our offering, on the runway to 5G Advanced and ultimately 6G towards the end of the decade. Although it’s early stages on the 6G journey, we envision it to bring massively more capacity, adaptive AI interfaces and deep learning techniques. But when the time of 6G comes, we should not assume we’ll get to start from a “clean slate”. Our customers will want to ensure a seamless evolution of architectures, chipsets, software and 5G/6G platforms. It’s going to be an exciting evolution from 5G to 6G.
So, off to the races!