Highlights:

SD-WAN (appliance + control and management software) revenue reached $116M in 3Q17, up 18% quarter-over-quarter (QoQ) and up 2.8x year-over-year (YoY). VeloCloud led the SD-WAN market with 22% share of 3Q17 revenue, Aryaka was in second place with 18%.  Silver Peak rounded out the top 3 with 12%, according to the DC Network Equipment market tracker early edition from IHS Markit.

“The majority of SD-WAN solutions at first focused on virtualizing the WAN connection problem bringing automation, reliability, and agility to the enterprise WAN using overlays. Current use cases include direct connect for branch offices to the Internet and increased reliability through automated fail-over for a better user experience,” said Cliff Grossner, Ph.D., Senior Research Director and Advisor for the Cloud and Data Center Research Practice at IHS Markit.

Worldwide SD-WAN revenue (US$M)-3Q-2017:

“With the WAN connectivity problem well understood and solutions ramping in deployments, SD-WAN vendors are beginning to offer additional services such as WAN optimization and virtual firewall. The next important challenge for SD-WAN vendors to solve is providing connectivity with SLAs and security for the multi-cloud,” said Cliff Grossner.

More Market Highlights:

·         3Q17 ADC revenue increased 5% from 2Q17 and decreased 5% from 3Q16

·         Virtual ADC appliances stood at 28% of 3Q17 ADC revenue

·         F5 garnered 45% ADC market share in 3Q17 with revenue down 4% YoY. Citrix had the #2 spot with 29% of revenue, and A10 (8%) rounded out the top 3 market share spots.

Data Center Network Equipment Report Synopsis:

The IHS Markit Data Center Network Equipment market tracker is part of the Data Center Networks Intelligence Service and provides quarterly worldwide and regional market size, vendor market share, forecasts through 2021, analysis and trends for (1) data center Ethernet switches by category [purpose built, bare metal, blade and general purpose], port speed [1/10/25/40/50/100/200/400GE] and market segment [enterprise, telco and cloud service provider], (2) application delivery controllers by category [hardware-based appliance, virtual appliance],  and (3) software-defined WAN (SD-WAN) [appliances and control and management software]. Vendors tracked include A10, ALE, Arista, Array Networks, Aryaka, Barracuda, Cisco, Citrix, CloudGenix, Dell, F5, FatPipe, HPE, Huawei, InfoVista, Juniper, KEMP, Radware, Riverbed, Silver Peak, Talari, TELoIP, VeloCloud, Viptela, ZTE and others.

……………………………………………………………………………………………………………………………………

From a Nov 15, 2017 press release:

According to the IHS Markit Data Center and Enterprise SDN Hardware and Software Biannual Market Tracker, SD-WAN is currently a small market, totaling just $137 million worldwide in the first half of 2017 (H1 2017). However, global SD-WAN hardware and software revenue is forecast to reach $3.3 billion by 2021 as service providers partner with SD-WAN vendors to deploy overlay solutions — and as virtual network function (VNF)–based solutions become more closely integrated with carrier operations support systems (OSS) and business support systems (BSS).

“Currently, the majority of SD-WAN revenue is from appliances, with early deployments focused on rolling out devices at branch offices,” Grossner said. “Moving forward, we expect a larger portion of SD-WAN revenue to come from control and management software as users increasingly adopt application visibility and analytics services.”

More highlights from the IHS Markit data center and enterprise SDN report:

• Globally, data center and enterprise software-defined networking (SDN) revenue for in-use SDN-capable Ethernet switches, SDN controllers and SD-WAN increased 5.4 percent in H1 2017 from H2 2016, to $1.93 billion
• Based on in-use SDN revenue, Cisco was the number-one market share leader in the SDN market in H1 2017, followed by Arista, White Box, VMware and Hewlett Packard Enterprise
• Looking at the individual SDN categories in H1 2017, White Box was the frontrunner in bare metal switch revenue, VMware led the SDN controller market segment, Dell held 45 percent of branded bare metal switch revenue and Hewlett Packard Enterprise had the largest share of total SDN-capable (in-use and not-in-use) branded Ethernet switch ports

…………………………………………………………………………………………………………………………………………………………………..

Editor’s Notes:

We’ve repeatedly pounded the table that there are no standards for SD-WANs, despite efforts by MEF [1].   That implies single vendor SD WAN with vendor lock-in and no interoperability between SD-WANs from different vendors.

Note 1.  MEF says it will standardize the managed services that SD-WAN network operators deliver, by developing open APIs, along with common terminology and components. This effort builds on MEF’s Lifecycle Service Orchestration effort.  Please refer to this MEF document.

Note 2.  Gartner’s definition of SD-WAN

More from Gartner on SD-WANs:

Enterprise network leaders face enormous challenges adapting and changing their managed WAN services to meet constantly changing business needs for new applications, new offices, more users, cloud services and digital business. Based on hundreds of client inquiries and recent Research Circle surveys, a key obstacle is that traditional network services are too slow in meeting these needs, and network leaders need alternative solutions that can meet their evolving needs faster. Compared to traditional WAN services, managed SD-WAN services (including various WAN connectivity services) are emerging with promises of greater agility, flexibility, control and cost-efficiency.

Gartner recommends that network leaders seeking managed WAN services use end-to-end managed SD-WAN and connectivity services to create agile and cost-effective managed WAN services. However, they must avoid buying into overinflated expectations created by the market hype that ignores the limitations of current services. To avoid the inevitable disappointment that follows unfulfilled expectations, network leaders should outline their service requirements, and use these to define evaluation criteria for a balanced analysis of service benefits and limitations.’

Source: Gartner (December 2017)

Enterprise network leaders face enormous challenges adapting and changing their managed WAN services to meet constantly changing business needs for new applications, new offices, more users, cloud services and digital business. Based on hundreds of client inquiries and recent Research Circle surveys, a key obstacle is that traditional network services are too slow in meeting these needs, and network leaders need alternative solutions that can meet their evolving needs faster. Compared to traditional WAN services, managed SD-WAN services (including various WAN connectivity services) are emerging with promises of greater agility, flexibility, control and cost-efficiency.

Gartner recommends that network leaders seeking managed WAN services use end-to-end managed SD-WAN and connectivity services to create agile and cost-effective managed WAN services. However, they must avoid buying into overinflated expectations created by the market hype that ignores the limitations of current services. To avoid the inevitable disappointment that follows unfulfilled expectations, network leaders should outline their service requirements, and use these to define evaluation criteria for a balanced analysis of service benefits and limitations.’

Source: Gartner (December 2017)

Current WAN services take too long to roll out and are too difficult to relocate or terminate, and network leaders are looking for ways to improve this. Network leaders see SD-WAN as a new opportunity to create more agile branch office connectivity due to appliances’ support of “zero-touch-configuration.” Vendors are fueling these expectations with reports of very fast site rollout with reports of 20 to 30 sites deployed overnight, compared to six to 10 sites per week for a traditional managed router service. However, SD-WAN does not change fundamental limitations of connectivity services, for example:

• Fast site deployments are only available for 4G/LTE access services or in cases where the provider already has a wired access service to the building (although in many cases these still require one to two weeks to provision).
• Network leaders who need new wired access services still need to plan for 14 to 90 days (or longer) from order to provisioning.
• All wired branch office connections, private or public, still require network leaders to sign a contract of fixed duration, making it a problem for network leaders to move or terminate a site without financial penalties.

Network leaders who need new WAN sites deployed with short notice should request managed SD-WAN with embedded LTE services. While many providers do not yet offer this service, there are providers in select countries that courier SD-WAN appliances with LTE embedded to customer sites instead of sending a technician. The best-case scenario is only six hours from order placement to on-site delivery of the appliance. Combined with self-service, where the enterprise plugs in the SD-WAN appliance to the LAN and powers up the device, the site can be operational within a day in the best case. However, network leaders who do not want their office staff to plug in the appliance need to plan for up to a week for a technician to be on-site, depending on location.

However, besides expense, the performance limitations of 4G/LTE include lower bandwidth than fiber, lack of geographic coverage and lack of QoS. Also, most of these services are based on using the internet as backhaul to the provider’s internet gateway. This means that, for larger sites and critical applications, network leaders should only employ 4G/LTE connectivity as an interim primary connection until a fiber connection has been deployed.

……………………………………………………………………………………………………………………………………………………………………………………………………

Because of the performance issues that still plague the internet in most parts of the world, the majority of enterprises are not replacing MPLS with internet services. Instead, based on client inquiries, Gartner estimates that around 60% of global WANs use both internet and MPLS in concert in a hybrid WAN that sends critical application traffic over the MPLS and everything else over the internet.

Enterprise experience has shown that for a global managed hybrid WAN, network planners can obtain at least 30% expense savings compared to traditional managed WAN (see “Cloud Adoption Is Driving Hybrid WAN Architectures” ). Network planners that want to replace their global MPLS with internet should progress selectively, and choose a few sites in areas where the internet is most likely to be of good quality. For these sites, demand a two- to four-month pilot as a condition of signing a new WAN contract. Remember that all internet providers and services are not the same. Use only a select few and do not disaggregate internet providers, as WAN and application performance will suffer.

Overview:

The Small Cell Forum (SCF) commissioned an in-depth survey from Rethink Technology Research to understand more about their deployment plans and business drivers for a dense HetNet, and the barriers they need to overcome.  Over 50 tier 1 and 2 mobile and converged operators responded to this survey, which illuminates operators’ deployment plans for network densification, as well as the barriers they expect to have to overcome.

The results showed that cell densification has begun in today’s LTE networks and will intensify in the 5G era, enabled by profound changes to the architecture and economics of small cells.

The SCF forecasts that between 2015 and 2025, new non-residential small cell deployments will grow at a compound annual rate of 36%, to reach almost 8.5 million, and by 2025 deployments will be 22 times higher than in 2015.

Densification is starting in LTE networks and will intensify in the 5G era, enabled by profound changes to the architecture and economics of small cells.

Key findings:
It is clear from the results of the survey that most mobile network operators (MNOs) are starting to plan for dense HetNets, even if they do not intend to deploy the 5G radio network at scale until well into the 2020s. The biggest uptick in new deployments of small cells will be seen in the 2018-2020 period, with a 50% increase, with a second sharp increase in 2023-2024 as 5G densification gets into full swing.
This indicates that many operators are densifying their networks long before they upgrade to 5G – the start of 5G small cell deployment will come in 2020, with 68% of respondents planning to embark on this upgrade before the end of 2022 and the rest later than that. While a smooth migration path to 5G will be important, most MNOs’ main concerns are with immediate issues of deployment in 4G.

Against that context, the following is a summary of some of the key findings of the survey:
• Only 17% of respondents have no plans for large-scale densification. By
contrast, by 2020, 40% of operators expect to deploy between 100 and 350
small cells per square kilometer in the areas they densify (led by transport
hubs, urban downtown regions and business parks).

• When it comes to 5G, 69% of operators planning 5G deployment before 2023
expect to start small cell deployment in tandem with the macro, or ahead of
it. In the first 2-3 years of deploying 5G New Radio, 58% expect to focus
primarily on small cells, 37% mainly in order to densify the network for
enhanced mobile broadband, and 21% mainly to enable new use cases.

• However, densification will happen well in advance of 5G. When asked to
rank their critical requirements for small cells, operators prioritized those
which relate to the here-and-now, not just 5G futures. Low total cost of
ownership (TCO), multivendor interoperability, ease of deployment and good
macro network interworking were the most commonly cited as top three
demands.

• It is vital for the industry to support the key requirements as soon as
possible, since the survey shows that many operators would be keen to
accelerate their deployment timeline if their concerns were addressed. For
instance, 19% would ideally like to start at-scale deployment within one year,
but only 7% believe that will be practical and affordable.

• The key factors which would enable them to bring their deadlines forward
would be new sources of affordable fiber for backhaul and fronthaul (53%
cited this), followed by lower overall TCO (50%) and easier access to sites
(46%).
• The commercial drivers which are creating this new urgency are becoming
more diverse and business-critical. Supporting improved quality of experience
(QoE) – the main determinant of customer satisfaction – through improved
and targeted capacity emerged as the most important driver (placed in the
top three by 40%). This was followed by lower total cost of ownership (TCO)
for the mobile network (38%), and the ability to deploy new services and
revenue streams based on small cells (36%).
• There is increasing diversity of business cases. On top of mobile broadband,
40% plan to introduce new enterprise services enabled by small cells before
2020 – and two-thirds after that – while for IoT services, the figures are 29%
and 39%.
• Density will allow MNOs to address new enterprise requirements. The areas
where the largest number see a business case for density would be transport
hubs, business parks and corporate buildings or campuses, while significant
opportunities are also seen in medium-sized enterprises and the hospitality
and property development sectors.
• To support business case diversity, there is a need for architectural diversity
too. As well as standalone access points, by the end of 2019, 50% also
expect to have deployed distributed radio systems and 33% clusters of small
cells managed by a virtualized controller.
• Other architectural changes are being actively adopted to make densification
easier and support additional use cases. For instance, by the end of 2019,
75% of operators will have implemented small cell SON (self-optimizing
networks), while 25% will have started to deploy end-to-end orchestration of
physical and virtual cells.
• To improve the small cell business case further, especially in the enterprise,
79% expect to support edge computing integrated with small cells, by the
end of 2022. Enterprise edge applications are seen as the leading driver
(40% placed it in their top three).
• To boost capacity, there is a rising need to tap into new sources of spectrum.
By 2022, 66% expect to be using LTE in unlicensed spectrum, and 45% plan
to have deployed small cells in spectrum above 20 GHz.

…………………………………………………………………………………………….

You can download the entire survey (after filling out a form) here.

by Michael Howard of IHS-Markit (co-founder and lead analyst at Infonetics)

Network Function Virtualization (NFV) MANO (management and network orchestration) and VNF (virtual network function) software revenue was $3.5B in 2016 and is expected to reach $5.9B for 2017, according to the NFV Hardware, Software, and Services biannual market tracker from IHS Markit.

NFV revenue is not all new: it includes displaced revenue and newly identified parts of existing market segments. In 2021, 49% of the NFV revenue will be new revenue from software and outsourced services, and 8% will be displaced revenue spent on NFVI server/storage/switch hardware purchased instead of purpose-built network appliances. The remaining 43% represent spend on VNF software.

“Operators around the world are planning or extending their NFV environments to customer sites on CPE (customer premises equipment), which we are calling uCPE (universal CPE). We expect operators will spend $11M on physical “uCPE” hardware in 2017, growing to $448M in 2021,” stated Michael Howard, Executive Director Research and Analysis for Carrier Networks at IHS Markit.

“In our 5th annual global carrier surveys on SDN and NFV, 82% of respondents indicated they are deploying or plan to execute VNFs on uCPE located at customer sites (with 97% in COs and 85% in DCs). Because this is such a large part of operator plans and products available now, we have sized and forecast the uCPE market,” Michael Howard added.

Above illustration courtesy of IHS-Markit

…………………………………………………………………………………………

Editor’s Note:  NFV and MANO Backgrounder:

………………………………………………………………………………………………………………………..

NFV Reference Architecture showing NFV Orcestrator and VNF Manager

Above illustration extracted from the ETSI NFV MANO Specification

Recently, there’s been more innovation around the MANO portion of the NFV infrastructure and a recognition that MANO might need more development as a model given the gap between the MANO layer in NFV and the OSS/BSS (operations support systems/business support systems) portion of network operator  businesses that handle the core orchestration and billing functions as shown above.

………………………………………………………………………………………………………..

More NFV Market Highlights (IHS-Markit):

·         Revenue to vendors and systems integrators for outsourced services for NFV projects will grow to $16.6B in 2021 with a 2016-2021 CAGR of 23%.

·         NFV software (NFV MANO and VNFs) revenue will grow to $15.5B in 2021 with a 2016-2021 CAGR of 36%.

·         NFV hardware (NFVI server, storage, and switches) revenue will grow from $696M in 2016 to $3.1B in 2021 with a 2016-2021 CAGR of 35%.

·         Service providers will invest $2B in hardware and software for the enterprise vCPE use case in 2021, and $293M for the consumer vCPE use case.

…………………………………………………………………………………………….

NFV Hardware, Software and Services Report Synopsis:

The IHS Markit NFV Hardware, Software, and Services market tracker provides biannual worldwide and regional market size, forecasts through 2021, analysis and trends for:

(1) NFV hardware [servers, switches, storage and uCPE],

(2) software: NFV MANO, Virtual Network Functions (VNF) [SD-WAN, mobile core & EPC, PCRF & DPI, security, IMS, SBC & DCS, video CDN, vRouters, and other VNFs],

(3) outsourced services for NFV projects, plus NFV use case spending [consumer vCPE and enterprise vCPE].

Vendors tracked include Amdocs, ADVA, Ciena, Cisco, ClearPath, Ericsson, Fujitsu, HPE, Huawei, Juniper Networks, Metaswitch Networks, Nakina Systems, Nokia, Nuage Networks, NEC, NetCracker, Oracle, ZTE, and others.

……………………………………………………………………………………..

Editor’s Note:

I strongly respect Mr. Howard’s work ethic and primary market research findings.  While not having read this latest report, I’m sure it’s excellent.  However, I’m still much more pessimistic on the NFV market due to the lack of standards for exposed interfaces/APIs and backward compatibility (especially hybrid network management) with the installed base of non NFV equipment/boxes.

ABI Research on NFV Market:

ABI Research forecasts that North America will lead the NFV market, accumulating $13 billion in NFV-related investments during 2022, while Europe will experience the highest growth rate at an estimated 53% CAGR between 2017 and 2022. Early adopters claim several benefits to NFV-enabled systems, which include reductions in network CAPEX & OPEX, service agility, and reduced deployment times for new network elements.

“In 2015 and 2016, the market experienced some early successes but mostly reconsiderations and failures with NFV,” says Neha Pachade, Senior Analyst at ABI Research. “Early adopters conducted proof of concept testing and NFV-integrated system demonstrations with the aim to understand the true impact of NFV in the technical, operational, and cultural domains. Our forecasts indicate that NFV will become a sizeable opportunity for vendors, although it is not yet clear whether it will cannibalize existing hardware-based product lines or create new market use cases.”

ABI Research estimates that total NFV market revenues will reach $38 billion in 2022. Hardware spend—including servers, storage devices, and switches—will reduce with time, while software and services will have higher growth rates of 55% and 50%, respectively. Although the market is evolving and technical expertise is starting to mature, the standardization and multi-vendor involvement challenges will remain stagnant for the next couple of years. Software and services vendors will have opportunities to identify NFV use-cases in enterprise verticals and use these to offer end-to-end integrated systems.

“Early contracts and market trends illustrate the biggest winners are likely to be the established vendors, including Ericsson, Huawei, and Nokia, as well as specialists like Amdocs and Netcracker, with systems integration becoming more important each day,” concludes Pachade. “Several vendors also place heavy and risky bets on open source software, which may increase business opportunities but may also create difficult choices for them in the future, particularly if telco interest in specific open source projects fizzles out. For the time being, NFV is mostly considered as a cost-cutting exercise, since new revenue opportunities require a transformation in a much broader context, which is more likely to be driven by 5G, after 2020.”

These findings are from ABI Research’s Network Functions Virtualization Tracker and Forecasts report.

Huawei is highlighting a Tokyo, Japan trial in which the Chinese telecom/IT vendor achieved “5G” like download speeds of 4.52 gigabits per second over ~ three-quarters of a mile using 28 GHz millimeter-wave wireless technology.  The trial took place in downtown Tokyo, where a base station working over 28GHz frequency was located at Tokyo Skytree’s viewing deck, 340m above the city.

Working with Japan’s NTT Docomo, Huawei said it was confident of launching a commercial 5G rollout by 2020 (NOTE: the IMT 2020 set of 5G standards are to be finalized by year end 2020).

“The high-speed and long distance support is one of important technical challenges for 5G mmWave conditions. This successful long distance live-demo on a 5G mmWave is a groundbreaking achievement in our joint effort with NTT DOCOMO to build a fundamental 5G commercial environment. This success makes us more confident in realizing the goal of commercializing 5G by 2020,” said Gan Bin, vice president of Huawei’s 5G product line.

Huawei utilized its 5G base station for the test, which supports Massive MIMO and beam forming technologies. Huawei also provided the 5G core network and the 5G mm wave test user equipment.

Huawei anticipates conducting further testing at the world’s biggest 5G testing site in Beijing’s Huairou District.

The test comes amid a flurry of 5G testing and trials around the world.  For example, BT and Nokia announced plans for live “5G” tests in the UK earlier this month.

References:

http://www.huawei.com/en/news/2017/12/NTT-DOCOMO-5G-mmWave-Field-Trial-Tokyo

https://www.totaltele.com/498823/5G-testing-spurs-Huawei-to-deliver-5G-by-2020

U.S. Ignite’s smart cities project, called the Smart Gigabit Communities program, is a National Science Foundation (NSF) funded program that provides assistance to areas looking to advance gigabit technologies. The nonprofit group’s five new participants are Red Wing, Minn.; Eugene-Springfield, Ore.; Lexington, Ky.; Lincoln, Neb.; and the San Francisco Bay area.

………………………………………………………………………………………………………………

Backgrounder:

U.S. Ignite stimulates the creation of next-generation applications and services that leverage advanced networking technologies to build the foundation for smart communities, including cities, rural areas, regions, and states. The nonprofit organization helps to accelerate new wired and wireless networking advances from research to prototype to full-scale smart community and interconnected national deployments.

………………………………………………………………………………………………………………….

U.S. Ignite said in a press release that each of the communities will begin participating by using their new SGC support to find answers to civic challenges through gigabit enabled apps, tools and other solutions. At the same time, they will also be expected to contribute their insights and technologies with fellow SGC communities. The sharing is designed to create a network for smart city collaboration, a group that now includes 25 national and international communities.

Representing leaders in the San Francisco Bay Area, executive director of the City Innovate Foundation, Kamran Saddique, said that the Bay Area’s participation represents significant support for local cities in developing advanced infrastructure and solving common social problems.

“Smart communities and the Internet of Things are a set of modern digital technologies, civic innovations and social changes that have come together to create the opportunity to drive fundamental changes in government, business and society,” Saddique said in a statement. “Our participation in the US Ignite SGC network will help us to leverage these technologies to enhance the quality of life for the San Francisco Bay Area.”

The City Innovate Foundation is responsible for a number of civic tech and smart city programs that involve the cities San Francisco, Oakland, San Leandro and West Sacramento. Two of its major initiatives include SuperPublic, a Bay Area smart city innovation lab, and the national Startup in Residence program that coordinates partnerships between cities and tech startups.

An SGC requirement is that all cities that join the program must be investing in gigabit connectivity. San Francisco is preparing for a $1.3 billion citywide municipal internet network that will spread high-speed connectivity throughout the city.

Like San Francisco, the other four recently added communities expressed a similar eagerness and optimism to receive SGC’s support. Lexington Mayor Jim Gray said he was “ecstatic” to join the network and looks forward to “unparalleled innovations in the coming months and years,” while in Eugene, Oregon, Mayor Lucy Vinis said she was “thrilled” and expected gigabit connectivity in the community to drive education, healthcare, transportation and advanced manufacturing.

In Lincoln, Nebraksa, Mayor Chris Beutler is counting on the smart city support to bolster its own gigabit internet service that is coming to the city by 2019. A partnership with the internet service provider Allo is expected to connect gigabit fiber to more than 105,000 residences and 20,000 businesses and government offices.

“This public-private partnership creates the digital infrastructure that gives our entrepreneurs and students high-speed internet, supercomputer access to researchers and other innovators across the nation to build next-generation technology,” Beutler said in a statement.

Reference:

https://www.us-ignite.org/news/us-ignite-inc-adds-new-communities-to-growing-smart-gigabit-communities-program/

A new by 5G Americas whitepaper, titled “LTE Progress Leading to the 5G Massive Internet of Things”is an overview of the technological advancements that will support the expanding IoT vertical markets, including connected cars and wearables. The term Massive IoT (MIoT) has been recently created by the telecom industry to refer to the connection for potentially large number of devices and machines that will call for further definition in the standards for LTE and later for 5G.

The generic requirements for IoT are low cost, energy efficiency, ubiquitous coverage, and scalability (ability to support a large number of connected machines in a network). To legacy operators, IoT services should ideally be able to leverage their existing infrastructure and co-exist with other services. In the 3GPP Release
13 standard, eMTC and NB-IoT were introduced. These technologies met the above generic IoT requirements. They support in-band or guard band operations. Device cost and complexity are reduced. A large quantity of IoT devices can be supported in a network while battery life is extended.  Many of the related features were covered in the 5G Americas whitepaper, LTE and 5G Technologies Enabling the Internet of Things.

Jean Au, staff manager, technical marketing, Qualcomm Technologies, and co-leader of the whitepaper said: “Some cellular service providers in the U.S. are already adding more IoT connections than mobile phone connections, and the efforts at 3GPP in defining standards for the successful deployment of a wide variety of services across multiple industries will contribute to the growing success for consumers and the enterprise.”

At present, low-power wide area networks (LPWANs) are already gaining popularity and it is expected that cellular-based technologies including LTE-M (Machine) and Narrowband-IoT (NB-IoT) will emerge as the foremost standards for LPWA by 2020.

Wireless network operators will have the option to choose from several Cellular IoT (CIoT) technologies depending on their spectrum portfolio, legacy networks and requirements of the services they offer.

Vicki Livingston, head of communications, 5G Americas, said:

“There will be a wide range of IoT use cases in the future, and the market is now expanding toward both Massive IoT deployment as well as more advanced solutions that may be categorized as Critical IoT.”

According to Research and Markets, the global IoT platform market will grow at a CAGR of 31.79 percent from 2017 to 2021.  The large number of active IoT devices collect data through sensors and actuators and transmit the back to a centralized location. The IoT platform empowers the end-user to make informed decisions using the data. Together with design innovations in 5G architectures, cloud-native edge computing platforms ensure Industrial IoT (IIoT) applications can be run in a cost-effective manner.

References:

http://www.5gamericas.org/files/8415/1250/0673/LTE_Progress_Leading_to_the_5G_Massive_Internet_of_Things_Final_12.5.pdf

http://www.5gamericas.org/files/3514/8121/4832/Enabling_IoT_WP_12.8.16_FINAL.pdf

………………………………………………………………………………………

Addendum:  IDC’s IoT Forecast

Worldwide spending on the Internet of Things (IoT) is forecast to reach $772.5 billion in 2018, an increase of 14.6% over the $674 billion that will be spent in 2017. A new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide forecasts worldwide IoT spending to sustain a compound annual growth rate (CAGR) of 14.4% through the 2017-2021 forecast period surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.

IoT hardware will be the largest technology category in 2018 with $239 billion going largely toward modules and sensors along with some spending on infrastructure and security. Services will be the second largest technology category, followed by software and connectivity. Software spending will be led by application software along with analytics software, IoT platforms, and security software. Software will also be the fastest growing technology segment with a five-year CAGR of 16.1%. Services spending will also grow at a faster rate than overall spending with a CAGR of 15.1% and will nearly equal hardware spending by the end of the forecast.

“By 2021, more than 55% of spending on IoT projects will be for software and services. This is directly in line with results from IDC’s 2017 Global IoT Decision Maker Survey where organizations indicate that software and services are the key areas of focused investment for their IoT projects,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC. “Software creates the foundation upon which IoT applications and use cases can be realized. However, it is the services that help bring all the technology elements together to create a comprehensive solution that will benefit organizations and help them achieve a quicker time to value.”

The industries that are expected to spend the most on IoT solutions in 2018 are manufacturing ($189 billion), transportation ($85 billion), and utilities ($73 billion). IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management. In transportation, two thirds of IoT spending will go toward freight monitoring, followed by fleet management. IoT spending in the utilities industry will be dominated by smart grids for electricity, gas, and water. Cross-Industry IoT spending, which represent use cases common to all industries, such as connected vehicles and smart buildings, will be nearly $92 billion in 2018 and rank among the top areas of spending throughout the five-year forecast.

“Consumer IoT spending will reach $62 billion in 2018, making it the fourth largest industry segment. The leading consumer use cases will be related to the smart home, including home automation, security, and smart appliances,” said Marcus Torchia, research director, Customer Insights & Analysis. “Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21.0%.”

Asia/Pacific (excluding Japan) (APeJ) will be the geographic region with the most IoT spending in 2018 – $312 billion – followed by North America (the United States and Canada) at $203 billion and Europe, the Middle East, and Africa (EMEA) at $171 billion. China will be the country with the largest IoT spending total in 2018 ($209 billion), driven by investments from manufacturing, utilities, and government. IoT spending in the United States will total $194 billion in 2018, led by manufacturing, transportation, and the consumer segment. Japan ($68 billion) and Korea ($29 billion) will be the third and fourth largest countries in 2018, with IoT spending largely driven by the manufacturing industry. Latin America will deliver the fastest overall growth in IoT spending with a five-year CAGR of 28.3%.

The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 14technologies and 54 use cases across 20 vertical industries in eight regions and 53 countries. Unlike any other research in the industry, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.

https://www.idc.com/getdoc.jsp?containerId=prUS43295217

by : Bjarne Munch | To Chee Eng | Greg Young | Danellie Young | Vivek Bhalla | Andrew Lerner |Danilo Ciscato of Gartner Group

Overview:

This new Gartner Group report is on the key impacts of digital business, cloud and orchestration strategies. In particular, IT leaders must continue to focus on meeting enterprise needs for expanded WAN connectivity, application performance and improved network agility, without compromising performance.

Strategic Planning Assumptions:

Analysis:

Greg Wyler, the entrepreneur and CEO of satellite internet company OneWeb, has won the Fierce Wireless “Most Powerful Person In Telecom” tournament for 2017, just edging past T-Mobile CEO John Legere during this weekend’s final matchup and beating other industry notables like Ericsson’s Borje Ekholm, Apple’s Tim Cook and Verizon’s Lowell McAdam.

This past  Sunday afternoon, Legere urged his almost 5 million Twitter followers to vote for OneWeb’s Wyler instead of himself:

 Overview:

By a 3 to 2 vote along party lines, the Federal Communications Commission (FCC) voted on Thursday to dismantle landmark rules regulating the businesses that connect consumers to the internet, granting broadband ISPs the power to potentially reshape Americans’ online experiences.  The agency scrapped the so-called net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content. The federal government will also no longer regulate high-speed internet delivery as if it were a utility, like phone service.  The upshot is that the “Restoring Internet Freedom” order passed today, removes the FCC as a regulator of the broadband industry and relegates rules that prevented blocking and throttling content to the honor system.

That means a consumer or business is helpless if they have a complaint against an ISP or broadband service provider although there’s lip service saying that “the FCC and FTC will securely share consumer complaints pertaining to the subject matter of the Internet Freedom Order’s requirements to the extent feasible…….”  FTC enforcement action is mentioned, but from our experience the FTC does nothing when it receives a complaint!  They don’t even contact the business you’re complaining about (like the BBB does).

From the FCC’s Memorandum of Understanding (bold font added– see other FCC.gov references below):

(1) Pursuant to the FCC’s authority under the Communications Act of 1934, as amended, on December 14, 2017, the FCC adopted a Declaratory Ruling, Report and Order, and Order in the proceeding Restoring Internet Freedom, WC Docket No. 17-108, Declaratory Ruling, Report and Order, Order, FCC 17-166 (Dec. 14, 2017) (“Internet Freedom Order”), which, in principal part, restores broadband Internet access service to its Title I information service classification,reinstates the private mobile service classification of mobile broadband Internet access service, and returns to the Transparency Rule the FCC adopted in 2010 with certain limited modifications to promote additional transparency. As authority for the Transparency Rule, the FCC relies on Section 257 of the Communications Act, among other provisions, which requires the FCC to identify and eliminate market entry barriers for entrepreneurs and other small businesses in the provision and ownership of telecommunications services and information services and to report to Congress on how such marketplace barriers have been addressed by regulation or could be addressed by recommended statutory changes; and

(2) Congress has directed the FTC to, among other things, prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce under Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, and has charged the FTC with enforcing a number of other specific rules and statutes.

Therefore, it is agreed that:

1. Consistent with its jurisdiction and to fulfill its duties under Section 257 of the Communications Act, among other provisions, the FCC will monitor the broadband market and identify market entry barriers by, among other activities, reviewing informal complaints filed by consumers, and will investigate and take enforcement action as appropriate with respect to failures by an Internet service provider to comply, in whole or in part, with the Internet Freedom Order’s requirements to file with the FCC or display on a publicly available, easily accessible website the specified subjects of disclosure.
2. Consistent with its jurisdiction, the FTC will investigate and take enforcement action as appropriate against Internet service providers for unfair, deceptive, or otherwise unlawful acts or practices, including but not limited to, actions pertaining to the accuracy of the disclosures such providers make pursuant to the Internet Freedom Order’s requirements, as well as their marketing, advertising, and promotional activities.
3. Consistent with each agency’s jurisdiction and to maximize the resources of each agency, at the regular coordination meeting established by the Agencies’ 2015 Memorandum of Understanding, the Agencies will discuss potential investigations against Internet Service Providers that could arise under each agency’s jurisdiction, and coordinate such activities to promote consistency in law enforcement and to prevent duplicate or conflicting actions, to the extent appropriate and consistent with law.
4. To further support coordination and cooperation on these matters, the Agencies will continue to work together to protect consumers, including through:
• Consultation on investigations or enforcement actions that implicate the jurisdiction of the other agency;
• Sharing of relevant investigative techniques and tools, intelligence, technical and legal expertise, and best practices in response to reasonable requests for such  assistance from either Agency; and
• Collaboration on consumer and industry outreach and education efforts, as appropriate.
5. The FCC and FTC will securely share consumer complaints pertaining to the subject matter of the Internet Freedom Order’s requirements to the extent feasible and subject to the Agencies’ requirements and policies governing, among other things, the protection of confidential, personally identifiable, or nonpublic information.
6. The Agencies may coordinate and cooperate to develop guidance to assist consumers’ understanding of Internet service provider practices.
7. In seeking to encourage and facilitate the enforcement of applicable law, the Agencies recognize that decisions by one agency to take or withhold action are not, except by operation of law, binding on or intended to restrict action by the other agency.
8. To ensure the effective exchange of information between the Agencies, the persons signing below and their successors shall be deemed Designated Liaison Officers to serve as the primary sources of contact for each agency. Formal meetings between appropriate senior officials of both Agencies to exchange views on matters of common interest and responsibility shall be held from time to time, as determined to be necessary by such liaison officers…..blah, blah, blah!

……………………………………………………………………………………………………………………………………………………………….

Analysis:

The action reversed the agency’s 2015 decision, during the Obama administration, to better protect Americans as they have migrated to the internet for most communications. It will take a couple of weeks for the changes go into effect, but groups opposed to the action have already announced plans to sue the agency to restore the net neutrality regulations. Those suits could take many months to be resolved.

FCC chairman Ajit Pai said the rollback of the rules would eventually help consumers because broadband providers like AT&T and Comcast could offer people a wider variety of service options. We are helping consumers and promoting competition,” Mr. Pai said in a speech before the vote. “Broadband providers will have more incentive to build networks, especially to under-served areas.”   We think that’s disingenuous nonsense!

The discarding of net neutrality regulations is the most significant and controversial action by the F.C.C. under Mr. Pai. In his first 11 months as chairman, he has lifted media ownership limits, eased caps on how much broadband providers can charge business customers and cut back on a low-income broadband program that was slated to be expanded to nationwide carriers.

His plan for the net neutrality rules, first outlined early this year, set off a flurry of opposition. Critics of the changes say that consumers may have more difficulty finding content online and that start-ups will have to pay to reach consumers. In the past week, there have been hundreds of protests across the country, and many websites have encouraged users to speak up against the repeal. After the vote, numerous groups said they planned to file a lawsuit challenging the change.

As expected, the five FCC commissioners were fiercely divided along party lines. In front of a room packed with reporters and television cameras from the major TV networks, the two Democratic commissioners warned of consumer harms to come from the changes.

Mignon Clyburn, one of the Democratic commissioners, presented two accordion folders full of letters in protest to the changes, and accused the three Republican commissioners of defying the wishes of millions of Americans.  “I dissent, because I am among the millions outraged,” said Ms. Clyburn. “Outraged, because the F.C.C. pulls its own teeth, abdicating responsibility to protect the nation’s broadband consumers.”

“I dissent from this rash decision to roll back net neutrality rules,” said FCC Commissioner Rosenworcel. “I dissent from the corrupt process that has brought us to this point. And I dissent from the contempt this agency has shown our citizens in pursuing this path today. This decision puts the Federal Communications Commission on the wrong side of history, the wrong side of the law, and the wrong side of the American public.”

On the other hand, Brendan Carr, a Republican FCC commissioner, said it was a “great day” and dismissed “apocalyptic” warnings. “I’m proud to end this two-year experiment with heavy-handed regulation,” Mr. Carr added.

During Mr. Pai’s speech before the vote, security guards entered the meeting room at the F.C.C. headquarters and told everyone to evacuate. Commissioners were ushered out a back door. The hearing restarted a short time later.  That shows you how unpopular the repeal of Internet Neutrality really is!

Despite all the uproar, it is unclear how much will change for internet users. The rules were essentially a protective measure, largely meant to prevent telecom companies from favoring some sites over others. And major telecom companies have promised consumers that their experiences online would not change.

Mr. Pai and his Republican colleagues have echoed the comments of telecom companies, who have told regulators that they weren’t expanding and upgrading their networks as quickly as they wanted to since the creation of the rules in 2015.

“There is a lot of misinformation that this is the ‘end of the world as we know it’ for the internet,” Comcast’s senior executive vice president, David Cohen, wrote in a blog post this week. “Our internet service is not going to change.”  We certainly hope so!

But with the F.C.C. making clear that it will no longer oversee the behavior of broadband providers, telecom experts say, the companies could feel freer to come up with new offerings, such as faster tiers of service for business partners such as HBO’s streaming service or Fox News. Such prioritization could stifle certain political voices or give the telecom conglomerates with media assets an edge over rivals.

Is this net neutrality repeal set in stone? Not necessarily. The repeal could be overturned in court or by Congress. A Democratic senator is already working on legislation. Net neutrality advocates are also saying they’ll push ahead with both options to fight the repeal. In order for the repeal to go into effect, it must be approved by the Office of Management and Budget — a process that could take several months.

Other Voices:

Consumer groups, start-ups and many small businesses say there are examples of net neutrality violations by companies, such as when AT&T blocked FaceTime on iPhones using its network.

These critics of Mr. Pai, who was nominated by President Trump, say there isn’t enough competition in the broadband market to trust that the companies will try to offer the best services for customers. The providers have the incentive to begin charging websites to reach consumers, a strong business model when there are few places for consumers to turn when they don’t like those practices.

“Let’s remember why we have these rules in the first place,” said Michael Beckerman, president of the Internet Association, a trade group that represents big tech firms such as Google and Facebook. “There is little competition in the broadband service market.”

Mr. Beckerman said his group was weighing legal action against the commission. Public interest groups including Public Knowledge and the National Hispanic Media Coalition said they planned to challenge Mr. Pai’s order in court. Eric T. Schneiderman, the New York attorney general, also said he would file a lawsuit.

Dozens of Democratic lawmakers, and some Republicans, have pushed for Congress to pass a law on the issue, if only to prevent it from flaring up every couple of years at the F.C.C. — and then leading to a court challenge.

One Republican commissioner, Mike O’Reilly, said he supported a federal law created by Congress for net neutrality. But he said any law should protect the ability of companies to charge for faster lanes, a practice known as “paid prioritization.”  Any legislation action appears to be far off, however, and numerous online companies warned that the changes approved on Thursday should be taken seriously.

“If we don’t have net neutrality protections that enforce tenets of fairness online, you give internet service providers the ability to choose winners and losers,” Steve Huffman, chief executive of Reddit, said in an interview. “This is not hyperbole.”

Netflix, which has been relatively quiet in recent weeks about its opposition to the change, said that the decision “is the beginning of a longer legal battle.”  Netflix via Twitter (tweet) at 10:26 AM – Dec 14, 2017:

References:

I.  Light Counting’s 3Q2017 Market Update:

In its newly released “December 2017 Quarterly Market Update” LightCounting LLC states that demand for optical communications technology in 3Q 2017 followed what has been a year-long trend:  Telecom/network service provider spending declined year-on-year while data center operators increased their investments in fiber optic infrastructure.

The decline in telecom optical network spending hit the optical components segment hardest, but was negative for vendors selling to telcos which can be seen from the chart below:

In 3Q 2017, data center use of optical communications technology was considerably more than that of telecom/network service providers.

Source:  LightCounting LLC

…………………………………………………………………………………………………………..

Chinese carriers (see companion piece below) followed through on their announced plans to trim spending. LightCounting reports that China Telecom will continue to cut capex in 2018. Elsewhere in the world, only Orange looks like it will spend more this year than last among LightCounting’s list of top 15 telecom service providers.

Upticks in 100G DWDM transponders and WSS module sales paled in comparison to the declines experienced in the FTTx and wireless front haul markets, both sequentially and annually (see “Demand for FTTx, wireless optics declines from 2016: LightCounting”).

LightCounting says that check-ins with semiconductor vendors such as Analog Devices, Qualcomm, and Xilinx revealed increased activity in wireless/cellular communications, including 4.5G and 5G projects. This information leads the market research firm to expect initial commercial deployments of next generation wireless technologies in 2018, which in turn should boost the demand for optical front haul technology.

Optical vendors with exposure to the data center and internet content provider markets fared better than long haul/DWDM vendors.  For example, Alibaba, Facebook, and Google increased their infrastructure spends by 142%, 62% and 39%, respectively, leading to overall spending records in the space during the quarter. Facebook plans to double capex in 2018, leading to hopes that data center optical spending growth is sustainable.

Optical transceiver vendors benefited during the quarter, which Applied Optoelectronics seeing a 27% increase in revenues and Innolight a 94% boom versus 3Q16. Shipments of PSM4 and CWDM4 100GbE modules set records during the quarter. However, 100GBASE-LR4 QSFP28 optical transceiver demand in the third quarter of 2017 proved softer than LightCounting expected.

…………………………………………………………………………………………………………….

LightCounting LLC says:

Our analysis is based on confidential sales data provided by leading suppliers and offers a unique port-based view of the industry.

References:

http://www.lightwaveonline.com/articles/2017/12/third-quarter-2017-follows-year-long-theme-for-optical-communications-lightcounting.html

https://www.lightcounting.com/News_121317.cfm

http://techblog.comsoc.org/2017/11/27/cignal-ai-deloro-optical-network-equipment-market-decline-continues/

https://www.futuremarketinsights.com/reports/optical-networking-market

…………………………………………………………………………………..

II. China’s Optical Market Comeback (via Barron’s on-line), by Tiernan Ray

China’s optical fiber market is coming back, but slowly, according to a note this morning from Rosenblatt Securities analyst Jun Zhang, who follows shares of laser vendor Oclaro, Acacia Communications,  Applied Optoelectronics, and other vendors.

“Demand in China is stabilizing and slightly improving,” writes Zhang, “but we do not see a broad acceleration in China’s recovery yet.

“Chinese vendors recently concluded 2018 component and module procure- ments. Therefore, optical module and component suppliers should have base- line procurement contracts from Chinese vendors for 2018.”

The tricky part, indicates Zhang, is that Chinese buyers of components  are increasingly coming up with their own internal components, which is going to dent some of the demand:

Instead of over promising volume to suppliers, we believe Chinese vendors offered baseline procurement volume estimates for 2018. Additionally, we believe these current procurement forecasts do not include any upside from initial 5G deployments in 2H18. However, line and client side module procurements from Chinese vendors are all down YoY due to internal sourcing. Therefore, due to conservative forecasts and increasing competition in the module market, most optical suppliers will likely continue to speak conservatively on China demand. 

Zhang goes through what to expect, and it’s quite a mixed bag for various different vendors:

As we expected, ZTE is attempting to increase its internal sourcing for line side CFP2 DCO modules in 2018. Therefore, Acacia’s business could be negatively impacted in 2018 by ZTE. On the other hand, we believe there’s a chance Acacia can qualify at Huawei for DSP in 2018, but we see no signs yet. Intel’s  CWDM4 has been qualified at Facebook and could have a sizeable market share, similar to the share size we expect InnoLight to also have at Facebook in 2018. However, Applied Optoelectronics shares are down significantly at Facebook in 2018 likely putting its CQ4 guidance at risk […]

NeoPhotonics  could be up YoY, Lumentum flat YoY, Oclaro down slightly YoY, and Acacia down YoY. We also estimate Huawei and ZTE’s 100G ports to grow to 150K and 35K from 130K and 45K, respectively, in 2018. FiberHome  recently saw a large share gain at China Unicom and we expect it to double its 100G port shipments in 2018 from a small basis.

The Fiber Broadband Association (FBA) has issued a very optimistic fiber deployment forecast, which calls for approximately 1.4 million miles of fiber in the top 25 metro markets in the U.S.  That’s driven in large part by carriers’ 5G wireless deployment plans, which will require fiber backhaul, especially for small cells.

The FBA, formerly known as the Fiber to the Home Council Americas, promotes fiber deployment to homes, business and “to everywhere,” the organization notes in a new report titled “The Road to 5G is Paved with Fiber.”

The report also makes a case for why the FBA believes fixed 5G as the only connection to a home will not be the norm.

FBA’s Fiber Deployment Forecast:
In the report, the FBA spells out the assumptions that drove its fiber deployment forecast and cites sources for those assumptions:

• While macrocells are roughly .5 to 25 miles apart, 5G will require small cells located between 200 and 1,000 feet apart
• To deliver gigabit peak speeds to each user, the minimum downlink speed to each small cell will need to be 20 Gbps and the uplink peak data rate will need to be 10 Gbps
• 5G may require 60 small cells to cover one square mile
• The top 25 U.S. metro markets cover approximately 174,000 square miles

The 1.4-million fiber-mile forecast could be on the low side if multiple carriers want to build competing networks, the FBA notes.

Pessimistic on Fixed 5G:

“We do not believe fixed 5G to the home – as the only connection to the home – will become the norm,” the FBA argues in the new report.  Tell that to Verizon and AT&T which are planning to deploy some form of 5G fixed wireless to residences.

The report’s author notes that home network connections may need to support multiple 4K and soon 8K video streams, hundreds of in-home internet-connected devices and multiple virtual reality and augmented reality (VR/AR) users, which will require higher bandwidths than can be delivered by 5G under current development standards.

Additionally, the report argues that the millimeter wave signals that will be used for some 5G deployments do not penetrate exterior walls and would require a receiver attached to an exterior wall, requiring additional hardware costs and ongoing energy and maintenance costs. It’s worth noting, though, that results from early 5G trials are showing that the technology is not as limited as wireless experts initially expected it to be and both AT&T and Verizon have ambitious plans for fixed 5G.

http://www.telecompetitor.com/fiber-deployment-forecast-1-4-million-miles-needed-for-5g-in-top-25-metros/

………………………………………………………………………………………………………………………………

Separately, Cignal AI reported that North America metro WDM sales grew with increased spending by cloud and colo customers, offsetting weakness in the long-haul WDM market. Cisco and Ciena were the main beneficiaries of this shift to metro WDM, with Cisco realizing double-digits year-over-year growth related to cloud/colo shipments and growth in its NCS 4000 revenue. Significant shipments for metro WDM applications resulted in global coherent 100G port shipments exceeding 100,000 units in the quarter.

EMEA revenue dropped almost 20 percent year-over-year in 3Q17. Huawei, one of the top vendors in the region, experienced a very sharp decline and provided negative guidance into 2018. This data point, as well as others, compelled Cignal AI to reduce its forecast for EMEA for this year and 2018. Cignal AI expects to see weak spending trends among tier-1 customers in the region. Cignal AI also cut its 2018 forecast for China based on ongoing uncertainty tied to regional spending and a stall in revenue growth in 3Q17.

• Last quarter was the weakest YoY revenue growth recorded in China in over 4 years as momentum from 2Q17 spending failed to continue into the third quarter. Spending trends in the region remain difficult to predict.
• Revenue in the rest of Asia (RoAPAC) eased following breakout results in India during 2Q17 though spending remains at historically high levels.
• Quarterly coherent 100G+ port shipments broke 100k units for the first time on a global basis. 100G+ Port shipments in China were flat QoQ and are substantially up YoY

Despite unabated exponential growth in network usage, global telecom revenue is on track to grow just 1.1 percent in 2017 over the prior year, according to a new report [1] by business information provider IHS Markit.

Global economic growth prospects, meanwhile, are looking up. IHS Markit macroeconomic indicators point to moderate global economic growth of 3.2 percent for 2017, up from 2.5 percent in 2016, and world real gross domestic product (GDP) is projected to increase 3.2 percent in 2018 and 3.1 percent in 2019.

“Although the telecom sector has been resilient, revenue growth in developed and developing economies has slowed dramatically due to saturation and fierce competition,” said Stéphane Téral, executive director of research and analysis and advisor at IHS Markit. “At this point, every region is showing revenue growth in the low single digits when not declining, and there is no direct positive correlation between slow economic expansion and anemic telecom revenue growth or decline as seen year after year in Europe, for instance.”

China alone is tamping down global telecom capex in 2017:

IHS Markit forecasts a 1.8 percent year-over-year decline in global telecom capital expenditures (capex) in 2017, mainly a result of a 13 percent year-over-year falloff in Chinese telecom capex. Asia Pacific outspends every other region in the world on telecom equipment.

“Call it precision investment, strategically focused investment or tactical investment, but all three of China’s service providers — China Mobile, China Unicom and China Telecom — scaled back their 2017 spending plans, and the end result is another double-digit drop in China’s telecom capex bucket, with mobile infrastructure hit the hardest,” Téral said. “Bringing down capital intensity to reasonable levels of 15 to 20 percent is the chief goal of these operators.”

The virtualization trend:

A transformation is underway in service provider networks, epitomized by software-defined networking (SDN) and network functions virtualization (NFV), which involve the automation of processes such as customer interaction, as well as the addition of more telemetry and analytics with feedback loops into network operations, operations and business support systems, and service assurance.

“Many service providers have deployed new architectural options — including content delivery networks, distributed broadband network gateways, distributed mini data centers in smart central offices, and video optimization,” said Michael Howard, executive director of research and analysis for carrier networks at IHS Markit. “Nearly all operators are madly learning how to use SDN and NFV, and the growing deployments today bring us to declare 2017 as The Year of SDN and NFV.”

Data is the new oil, and AI is the engine:

Big data is becoming more manageable, and operators are leveraging subscriber and network intelligence to support the automation and optimization of their networks using SDN, NFV and initial forays into using analytics, including artificial intelligence (AI) and machine learning (ML).

“Forward-thinking operators are experimenting with how to use anonymized subscriber data and analytics to create targeted services and broker this information to third parties such as retailers and internet content providers like Google,” Téral said. “No matter their size, market or current level of digitization, service providers need to rethink their roles in the new age of information and reset the strategies needed to capitalize on this opportunity.”

……………………………………………………………………………………………….

Note 1.  The Telecom Trends & Drivers Market Report is published twice annually by IHS-Markit to provide analysis of global and regional market trends and conditions affecting service providers, subscribers, and the global economy. These roughly 40- page reports assess the state of the telecom industry, telling the story of what’s going on now and what we expect in the near and long term, illustrated with charts, graphs, tables, and written analysis. These critical analysis reports are a foundation piece for all market forecasts.

The reports include top takeaways on the economic health of the global telecom/datacom space; regional and global trends, drivers, and analysis for the service provider network sector in the context of the overall economy; financial analysis of the world’s top 10 service providers (revenue growth, capital intensities, free cash flow, debt level); regional enterprise and carrier spending trends; top-level service provider and subscriber forecasts; macroeconomic drivers; and key economic statistics (e.g., unemployment, OECD indicators, GDP growth). The reports are informed by all of IHS Technology research, from market share and forecasts to surveys with telecom service providers and small, medium, and large businesses.

……………………………………………………………………………………………………………….

The chart below from Bharti Airtel (India’s largest telecom company) shows that telecom industry revenue has declined in 2017 Q2, Q3, and Q4 with only Q1 showing positive growth.

“Today the 3GPP TSG RAN Plenary Meeting in Lisbon, Portugal successfully completed the first implementable 5G NR specification. AT&T, BT, China Mobile, China Telecom, China Unicom, Deutsche Telekom, Ericsson, Fujitsu, Huawei, Intel, KT Corporation, LG Electronics, LG Uplus, MediaTek Inc., NEC Corporation, Nokia, NTT DOCOMO, Orange, Qualcomm Technologies, Inc., Samsung Electronics, SK Telecom, Sony Mobile Communications Inc., Sprint, TIM, Telefonica, Telia Company, T-Mobile USA, Verizon, Vodafone, and ZTE have made a statement that the completion of the first 5G NR standard has set the stage for the global mobile industry to start full-scale development of 5G NR for large-scale trials and commercial deployments as early as in 2019.

On February 27, 2017 in Barcelona, global mobile industry leaders announced their support for the acceleration of the 5G NR standardization schedule, which introduced an intermediate milestone to complete the first implementable specification for Non-Standalone 5G NR operation. As a result of this announcement, the schedule acceleration was agreed at the 3GPP RAN Plenary Meeting on March 9 in Dubrovnik, Croatia. This first specification was completed as part of 3GPP Release 15.  Widespread commercial deployment is expected to start next year.

The completion of the 3GPP New Radio specification is an essential milestone to enable cost-effective and full-scale development of 5G NR, which will greatly enhance the capabilities of 3GPP systems, as well as facilitate the creation of vertical market opportunities. 3GPP plans to continue to develop Release 15, including the addition of support for Standalone 5G NR operation also agreed upon by 3GPP in Dubrovnik. The 5G NR lower layer specifications have been designed so that they can support Standalone and Non-Standalone 5G NR operation in a unified way, to ensure that 3GPP benefits the global industry with a large-scale single 5G NR ecosystem. We express our appreciation for the tremendous efforts that 3GPP has dedicated to accomplishing this challenging standardization schedule.”

Editor’s Note: 

3GPP NR spec is NOT a standard as 3GPP itself says it’s not a standards body. More importantly, NR is one of several Radio Interface Technologies that will be presented to ITU-R WP 5D for evaluation and selection of the true 5G/IMT 2020 standard for the Radio Access Network.

3GPP is an engineering organization that develops technical specifications – not standards. “The 3GPP Technical Specifications and Technical Reports have, in themselves, no legal standing. They only become “official” when transposed into corresponding publications of the Partner Organizations (or the national / regional standards body acting as publisher for the Partner). At this point, the specifications are referred to as UMTS within ETSI and FOMA within ARIB/TTC.”

http://www.3gpp.org/specifications/63-official-publications

“3GPP specification” cover all GSM (including GPRS and EDGE), W-CDMA (including HSPA) and LTE (including LTE-Advanced and LTE-Advanced Pro) specifications, and the emerging 5G specifications.

……………………………………………………………………………………………………………………

Telecom Company Support:

AT&T
“We’re proud to see the completion of this set of standards. Reaching this milestone enables the next phase of equipment availability and movement to interoperability testing and early 5G availability,” said Hank Kafka, VP Access Architecture and Analytics at AT&T. “It showcases the dedication and leadership of the industry participants in 3GPP to follow through on accelerating standards to allow for faster technology deployments.”

BT
“BT welcomes the first significant step to 5G deployment and we remain excited about the further innovations that 5G will bring.” said Neil J. McRae, Chief Architect at BT, “We are proud to have played a part in this and BT is committed to continuing to drive further 5G standardisation at pace to benefit our customers and communities.”

China Mobile
“The first version of 5G NR not only provides a NSA solution for 5G deployment but also completes the common part of NSA and SA, which lay a solid foundation for a global unified 5G system with global market scale. We believe the next important milestone that is SA standard providing end to end 5G new capability could be completed by June of 2018, which is very crucial to enable the operators to explore the enterprise and vertical markets. China Mobile is actively working with industry partners for 5G commercialization in year of 2020 and providing various services to customer.” said Zhengmao Li, EVP of China Mobile Group.

China Telecom
“China Telecom is proud of being part of the 3GPP standard efforts that led to the completion of the first implementable 5G new radio specification. We expect that this important milestone, together with the SA part to be completed later, will promote and accelerate the development of 5G products, trials and commercial deployment in the coming years,” said Liu Guiqing, EVP of China Telecom. “With this successful completion of the 5G new radio standard, China Telecom plans to lead the 5G effort by launching field trials in many major cities in China as early as 2018, and prepare for the possible commercialization thereafter.”

China Unicom
Guanglu Shao, EVP of China Unicom Group, said: “It is the significant step for both 3GPP and the whole industry. This first version of 5G NR standardization provides essential functionalities for NSA and SA deployment, which are equally important for operators. We believe in that the industry could joint together further to make 5G more advanced for both human and vertical societies. We welcome the 5G era’s coming, and will continue collaborate with industry partners to make successful 5G commercialization.”

Deutsche Telekom
“We view both the Non-Standalone and Standalone modes of New Radio as equally important for the completeness of the 5G standard specification. This timely finalization of NSA is one important step on that journey and in the development of the 5G ecosystem,” said Bruno Jacobfeuerborn, CTO Deutsche Telekom. “It is crucial that the industry now redoubles its focus on the Standalone mode to achieve progress towards a full 5G system, so we can bring key 5G innovations such as network slicing to our customers.”

Ericsson
Erik Ekudden, CTO at Ericsson, said: “3GPP has done a tremendous job to complete the first 5G specifications according to industry demand and expectations. As a prime contributor to 5G standardization, Ericsson has worked with industry partners in the evolution of mobile technology to a global network platform for consumers and enterprises. Our research team has worked on 5G since 2010 including early 5G testbed efforts created together with these industry partners. The open contribution-driven specification work and the rapid completion of the first 5G standards for global deployment demonstrates the strength of the 5G eco-system.”

Fujitsu
Masayuki Seno, EVP and Head of Network Products Business Unit at Fujitsu, said: “I’m very pleased that the first 5G NR standard has been completed today. Fujitsu will accelerate development of 5G NR products based on the first 3GPP 5G NR specifications and provide them to worldwide markets to support our customers’ trials and commercial deployments.”

Huawei
Yang Chaobin, president of Huawei 5G product line, said: “As one of the key players, Huawei has committed to develop a single global 5G standard. With the a successful cooperation and join efforts with global organizations including governments, regulatory agencies, research organizations, academia, industries, and many more sectors, 3GPP 5G NR standardization Phase 1 has been completed with great progress. Huawei will keep working with global partners to bring 5G into the period of large-scale global commercial deployment from 2018.”

Intel
“We are pleased to work in cooperation and close alignment with global mobile industry leaders to support the new 3GPP Non-Standalone 5G NR standard and to accelerate the first NR trials,” said Asha Keddy, Intel vice president and general manager, Next Generation and Standards. “As part of this coordinated effort, Intel will continue to play a leading role across the network, cloud and client devices; and with our first commercial 5G modems, we will help the ecosystem lead the way to 5G deployments worldwide.”

KT Corporation
Dongmyun Lee, Chief Technology Officer and Head of Institute of Convergence Technology, KT said: “As one of the 5G leaders, we are greatly excited to witness the first ever release of 5G NR NSA specification that the whole industry including KT has endeavored to achieve in recent years and therefore make a strong commitment to finally bring full-scale services of the true 5G standards to commercial market as early as 2019.”
KT expects that such 3GPP’s efforts meeting the market needs will further accelerate the realization of the 4th Industrial Revolution for telecommunication industry.”

LG Electronics
I.P. Park, Chief Technology Officer, said: “LG Electronics is pleased to be one of key contributors to the first global 5G NR standard completed in a timely manner, which will play a pivotal role in enabling innovative IoT services and expediting the convergence of diverse industry sectors. Along with continued contributions to evolved 5G standards, we will make all the efforts to introduce new innovative 5G convergence products and services in the market.”

LG Uplus
Joosik Choi, Head of 5G Strategy Planning, said: “We would like to thank to 3GPP and all companies for great effort on initial 5G NR NSA standard which will accelerate promising future. As one of the big contributor for RF analysis on LTE band, 3.5GHz and 28GHz dual connectivity operation, LG Uplus will keep endeavor for bring 5G NR deployment and advanced standard into industry for this ecosystem.”

MediaTek Inc.
“The milestone reached is significant as it is an important step towards making 5G NR a commercial reality,” said Dr. Kevin Jou, Corporate Sr. Vice President and Chief Technology Officer, MediaTek. “As a leading baseband chip provider, MediaTek has actively contributed to the standardization of 5G NR and will continue to do so. With the standard becoming stable, our focus is now on delivering viable commercial solutions that will enable the use of 5G NR technology to its full potential.”

NEC Corporation
Atsuo Kawamura, executive vice president and head of the Telecom Carrier Business Unit at NEC Corporation, said: “Completion of Non-Standalone 5G NR standardization is a significant milestone for the realization of full-scale 5G services. NEC is strongly committed to driving the progress of standardization for a global mobile system, and believes future 5G services will benefit society in an unprecedented manner by utilizing advanced information and communications technologies. NEC is creating secure and intelligent technologies to realize such services.”

Nokia
Marcus Weldon, president of Nokia Bell Labs and chief technology officer, Nokia, said: “This is a key milestone in bringing 5G to market, and one in which Nokia is proud to have played a significant role. 5G will advance new possibilities for the role of wireless technology in society, leading to dynamic innovation in mobile broadband and in industrial automation for industry 4.0, enabling the creation of exciting new applications that connect and control our physical and digital worlds.”

NTT DOCOMO
Dr. Hiroshi Nakamura, Executive Vice President and Chief Technology Officer, NTT DOCOMO said: “I would like to express my deepest gratitude for 3GPP’s great effort to successfully complete the first release of 5G NR specification six months ahead of schedule. NTT DOCOMO has made tremendous contributions to the standardization as a world-leading mobile operator. We have been collaborating with various partners across industries to co-create 5G services through ‘5G Trial Sites’ since this May. This completion will accelerate these activities and we will launch 5G services with Non-Standalone 5G NR by 2020.”

Orange
Arnaud Vamparys, SVP Radio Networks said: “Orange welcomes this inaugural first release of a worldwide standard for 5G. With subsequent 3GPP releases expected from mid 2018 that will accelerate application and IoT development, Orange sees a myriad of opportunities to deliver a differentiated and high quality network, and is therefore fully committed to working with the industry to roll out 5G.”

Qualcomm Technologies, Inc.
“We are excited to be part of this significant milestone, and to once again be at the forefront making the 5G vision a reality in 2019,” said Cristiano Amon, executive vice president, Qualcomm Technologies, Inc. and president, Qualcomm CDMA Technologies. “We look forward to continue working with our mobile industry peers to bring 5G NR commercial networks and devices in 2019 in smartphone and other form factors, for both sub-6Ghz and mmWave frequency bands, and to continue developing 5G technologies to connect new industries and enable new services and user experiences in the years to come.”

Samsung Electronics Co., Ltd.
DJ Koh, President and Head of IT and Mobile Communications Division at Samsung Electronics, said: “As a global leader in the mobile industry, Samsung has been collaborating with the whole industry to achieve this milestone in 5G standards. With the completion of 5G NSA NR standard, we will be able to expedite 5G commercial deployments including chipsets, devices and network equipment. Samsung will continue making every effort to deliver complete Rel-15 NR standards. Rel-15 NR and its further evolution will be a key milestone for the industry to meet the increasing global demand for enhanced mobile broadband services and exploring new business opportunities and services inspired by 5G.”

SK Telecom
“Having global 3GPP 5G NR standard by 2017 is one of key milestones to bring 5G into early commercial service in 2019”, said Jinhyo Park, EVP, Head of ICT R&D Center, “SK Telecom is proud to be one of key contributors to the accelerated 3GPP 5G NSA-NR standardization. We will continue to work on further development of 3GPP 5G NR to ensure readiness for early 5G commercial deployment.”

Sony Mobile Communications Inc.
Mr. Izumi Kawanishi, Director, EVP, Sony Mobile Communications Inc., said: “Sony has been part of the 5G NR and NSA standardization and recognizes the progress in 3GPP to reach this important milestone with features targeting evolved mobile broadband and ultra low latency communications. Sony Mobile is ready for full-scale development of 5G NR smartphones to take benefit of the opportunities offered by the new standard.”

Sprint
“We’re excited to help usher in the next generation of wireless networks that will drive new levels of innovation and progress around the world,” said Dr. John Saw, Sprint CTO.”We congratulate 3GPP and its delegates on this important milestone, and we look forward to working with our industry partners to deploy 5G NR in our 2.5 GHz (NR band n41) spectrum.”

TIM
Mr. Giovanni Ferigo, CTO, said: “TIM has already defined a sound track towards 5G and is collaborating with key industry players, municipalities and public Institutions to unleash the full potential of 5G for people and vertical markets by 2020 expanding the footprint of LTE-A. The extraordinary work done in 3GPP in a few months to keep the promise of a first set of standards coping with the strict requirements of a new radio interface is a fundamental step in this roadmap. We are looking forward to contributing to the next 3GPP milestones which will complete the work on Release 15.”

Telefonica
Mr. Enrique Blanco, Telefónica’s Global Systems and Networks Director, said: “Telefónica greatly appreciates the efforts made by the industry for completing this major milestone towards 5G. Telefónica acknowledges the full potential of 5G, and encourages the industry to keep developing ambitious ideas in order to deliver outstanding connectivity and bring the best possible experience to our customers. Telefónica is fully committed to working with the industry in this direction.”

Telia Company
“We are happy to see that the acceleration of 5G standardization that we and the whole industry called for in February has been achieved. This allows for the early commercial deployments needed to open up for innovation and new business opportunities that our customers expect from us”, says Mauro Costa, Director Network Architecture & Strategy, Telia Company. “In order for the industry and society to take advantage of the full potential of 5G, it is vital that the standardization now continues with a focus to complete also the stand alone version.”

T-Mobile USA
“This is an important moment and a crucial development toward making 5G NR happen,” said Neville Ray, Chief Technology Officer for T-Mobile US. “At T-Mobile, we’re committed to drive a 5G rollout across the US in 2020, and the efforts of 3GPP will help us to realize this great win for our customers.”

Verizon
“Verizon is delighted that the 3GPP is moving quickly to release a global standard for mobile 5G,” said Ed Chan, Chief Technology Architect and Network Planning.”With this important 3GPP milestone, Verizon is once again well positioned to deliver next-generation technology to customers just as we did with 4G LTE.”

Vodafone
Luke Ibbetson, Head of Vodafone Group R&D said: “Completion of the 5G standard six months earlier than originally anticipated is a significant milestone that should enable compliant network infrastructure and phones to be delivered in line with our requirements. This first version of 5G will build on the success of 4G, providing fast and highly efficient mobile broadband services to our customers and setting the foundation for the Gigabit Society.”

ZTE
Mr. Xu Huijun, CTO of ZTE Corporation, said: “The completion of the Non-Standalone 5G NR standardization is a critical milestone in the industry. I really appreciate 3GPP’s efforts in meeting this challenging schedule. As one of the contributors to the 5G standards-making process, ZTE will partner with the fellow mobile industry players to commit to accelerating the 5G NR large-scale trials and deployments.”

…………………………………………………………………………………………………………………………..

References:

http://www.3gpp.org/news-events/3gpp-news/1931-industry_pr_5g

India’s Department of Telecommunications (DoT) has firmed up plans to set up a 5G test bed that will be anchored by Indian Institute of Technology (IIT), Madras, where this author presented several guest lectures in December 1990.  According to a DoT official, the test bed is expected to be operational within the next six months.

The Telecom Regulatory Authority of India (TRAI) too is soon expected to issue a set of recommendations to the Center that would enable companies wanting to conduct research experiments for the latest generation of mobile telephony to do so domestically. A senior TRAI official told the Indian Express newspaper that these recommendations would be a part of the suggestions on ease of doing business that the regulator is in process of issuing to the government.

“We need to have an ecosystem in India itself, which is simple so that experiments can be conducted. We should have sand-boxing, and licensing for experimentation on 5G technology here. For experiment purposes, we should have a light-touch system, where if some company wants to research, it should be able to get a license to do so,” the (unnamed) official said. “If these experiments were happening here, our officials would have been training here itself instead of China. We are soon going to give recommendations to the government on this issue,” the official added.

To accelerate research and development of technologies as well as specifications related to 5G, the Center has set up a high-level forum comprising officials from the DoT, the Ministry of Electronics & Information Technology, and the Department of Science & Technology, with representatives from industry and academia. The high-level forum, set up in September, is expected to evaluate and approve roadmaps and action plans with a broader target of rolling out 5G in India by 2020, which is the aim for most global telecom companies for launch of commercial 5G services.

India has traditionally been behind the curve in adoption of mobile technologies, especially in when the global standards for 3G and 4G were being set. One of the key objectives behind setting up the high-level forum on 5G was for India to be able to participate in the process being undertaken by the International Telecommunications Union (ITU)  in creating standards for 5G (IMT 2020), which is expected to be a key driver of technological growth in form of artificial intelligence, internet of things, etc.

The high-level forum will also work towards accelerated deployment of 5G for specific use cases in India, and these will include the development of road map related to emerging technologies, testing, and trials. It will also aim to strengthen domestic telecom equipment manufacturing necessary for the technology. As per a presentation prepared by the DoT, the targets set for the forum suggest that local manufacturers should be able to capture 50 per cent of Indian market and 10 per cent of global market over next five to seven years. The aforementioned DoT official said that the proposed 5G test bed at IIT Madras will play the role of a key enabler for research and development of domestic manufacturing of 5G equipment.

http://indianexpress.com/article/technology/tech-news-technology/telecom-infrastructure-dot-to-set-up-dedicated-ecosystem-for-testing-5g-technologies-5000303/

…………………………………………………………………………………………………………………………………………………………..

Earlier in December, Ericsson demonstrated a 5.75Gbps “5G” network setup in Mumbai, India.  In their live demonstration at at a trade show, the company showcased “essential technologies on the road to 5G.”  One highlight was Gigabit LTE (1 GBPS download speeds) with License Assisted Access+ (LAA) technology. The LAA live demo highlighted the technology’s ability to leverage wireless network resources using higher frequency bands on a small cell architecture.  Other technology innovations presented in the Ericsson showcase included advancements in Radio Network Evolution, 5G Ready Transport and Network Slicing.

+License Assisted Access is a LTE feature that leverages the 5 GHz unlicensed band in combination with licensed spectrum to deliver a performance boost for mobile device users.  For more on LAA, please visit here.

Ericsson estimates that mobile data traffic in India will grow by 11 times by 2023.

………………………………………………………………………………………………………………………………………………………….

In a recently released Ericsson 5G Business Potential Report, 5G will enable a $27 billion revenue opportunity for Indian telecom operators by 2026. The largest opportunity will be seen in sectors like manufacturing, energy and utilities followed by public safety and health sectors. This will be over and above the revenue generated from traditional services which are expected to grow up to $63 billion by 2026.

Key findings from the Ericsson report:

• Industry digitalization investments are growing and generating revenue for ICT players worth an estimated USD 3.3 trillion by 2026
• Operators can benefit from an additional 34 percent revenue from 5G-enabled market opportunities by 2026
• 5G has the potential to deliver unparalleled benefits to society and businesses
• The time is now to start creating a 5G business

https://www.deccanchronicle.com/technology/in-other-news/021217/ericsson-demonstrates-575gbps-5g-network-setup-in-india.html

Verizon said in a press release that it completed the first successful FDD (Frequency Division Duplexing) massive MIMO (Multiple Input Multiple Output) trial with a fully compatible customer device thanks to its collaboration with Ericsson and Qualcomm.   The trial included the use of the latest Ericsson massive MIMO software and hardware along with a mobile test device powered by Qualcomm’s Snapdragon 845 Mobile Platform with an X20 LTE modem.

According to the aforementioned press release:

Massive MIMO is a key technology component in the evolution towards 5G. It has the potential of greatly improving network capacity and the customer’s experience. To realize the gains, both the network and devices need to support new TM9 [1] functionality which leverages advanced beam forming schemes between the network equipment and the mobile device. This will raise network spectral efficiency and customer speeds.

Note 1.  In 3GPP Release-10 (LTE-Advanced) Transmission Mode 9 (TM9) was introduced.  TM9 is designed to help reduce interference between base stations to maximise signal stability and boost performance. The new TM-9 enables the enhancement of network capabilities and performance with minimum addition of overhead. More information on TM9 is here.

………………………………………………………………………………………………………..

Qualcomm introduced the 845 Mobile Platform at the Snapdragon Summit in Hawaii in early December.   The trial comes after Verizon and Ericsson deployed massive MIMO on the wireless carrier’s Irvine, Ca network in late October.

“We don’t wait for the future, we build it. And this is another great example of moving the industry forward,” Verizon Chief Network Engineer and Head of Wireless Networks Nicola Palmer said in the release. “Massive MIMO is a critical component of our 4G LTE Advancements and will play an important role in 5G technology that will result in single digit latency and scalability in the billions of connections,” he added.

Joe Glynn, vice president, business development at Qualcomm Technologies, Inc. said: “This milestone further demonstrates Qualcomm Technologies’ leadership and commitment to continually bring innovative technologies to consumers to improve their mobile experiences. We look forward to continuing our work with Verizon and Ericsson to push the limits of LTE while ushering in a world of 5G.”

Massive MIMO is an LTE Advanced (4G) technology which has been described as being akin to a set of focused flashlights targeting users rather than a single floodlight. The high number of transmitters enables more possible signal paths and beam forming, which directs the beam from the cell site directly to where the customer is located, dramatically cutting down on interference.

Figure 1. Massive MIMO exploits large antenna arrays to spatially multiplex many terminals.

……………………………………………………………………………………………………………………………….

Figure 2. Active Phased Array Antenna (APAA) shown above right in 5G base stations. The combination of analog beam forming via APAA and digital MIMO signal processing for the multi-beam multiplexing is believed to be one of the promising approaches for reducing the complexity and power consumption of 5G base stations.  However, that has yet to be proven in a commercial 5G deployment.

………………………………………………………………………………………………………………………………….

In October, Verizon and Ericsson announced they had achieved a milestone in LTE Advanced technologies by completing their first deployment of FDD massive MIMO on Verizon’s wireless network in Irvine, California. Massive MIMO improves both spectral and energy efficiency, increasing network capacity for currently compatible devices in the market. Customers experience higher and more consistent speeds when using apps and uploading and downloading files.

Ericsson’s massive MIMO portfolio is expected to be available next year, putting it in line with commercial smartphones with the TM9 compatible chipset, which are expected to hit the market in the first half of 2018.

The past year saw a lot of talk around massive MIMO, which is considered by many to be a foundation technology for 5G. At the inaugural Mobile World Congress Americas in September, Sprint and Ericsson unveiled results of 2.5 GHz massive MIMO field tests conducted in Seattle and Plano, Texas, using Sprint’s spectrum and Ericsson’s radios.

• In early September, Ericsson said massive MIMO was part of a trial with T-Mobile US using mid-band FDD spectrum on three sites in Baltimore, Maryland.
• In February, Blue Danube Systems announced the completion of commercial trials using its massive MIMO technology in licensed FDD LTE spectrum with AT&T and Shentel.

Niklas Heuveldop, Head of Market Area North America, Ericsson, said: “Advanced Antenna Systems and Massive MIMO are key technology enablers for 5G, and 4G LTE service providers and end users will also benefit from the superior capacity and network performance these technologies enable. The latest trial is another important step in the collaboration we have with Verizon and Qualcomm Technologies to further evolve 4G and prepare the network for 5G.”

The Ericsson Massive MIMO portfolio is expected to be available next year, putting it well in line with commercial smartphones with the TM9 compatible chipset, which are expected to hit the markets in the first half of 2018.

References:

https://www.verizon.com/about/news/verizon-qualcomm-and-ericsson-collaborate-trial-latest-massive-mimo-advancements-path-5g

Verizon, Ericsson Team Up for Massive MIMO Deployment

http://www.samsung.com/global/business-images/insights/2017/Massive-MIMO-Comes-of-Age-0.pdf

http://www.ni.com/white-paper/52382/en/

http://techblog.comsoc.org/2017/10/17/mimo-starting-to-realize-its-full-potential-in-lte-networks/

http://techblog.comsoc.org/2015/06/30/separating-5g-fact-from-hype-is-massive-mimo-a-solution-or-dead-end/

https://www.itu.int/en/ITU-T/Workshops-and-Seminars/qos/201707/Documents/Rami%20Alnatsheh-%20Orchestrating%20the%20Performance%20of%205G.pdf

https://www.everythingrf.com/News/details/2639-zte-completes-massive-mimo-tests-for-imt-2020-5g

https://arxiv.org/pdf/1612.03993.pdf

http://www.analog.com/en/analog-dialogue/articles/massive-mimo-and-beamforming-the-signal-processing-behind-the-5g-buzzwords.html

One unpublicized 2017 telecom story was that the U.S. telecom industry didn’t grow.  Revenues were flat (despite continued exponential traffic growth), profits, CAPEX and stock prices were all down.  Indeed, telecom was the worst performing S&P 500 sector in 2017 with a -6% loss (vs +37% gain for Information Technology sector).   The most obvious top story of the year was the FCC’s vote to end neutrality, which we chronicled in this blog post.

Instead of a review of other telecom stories for 2017, we offer a tribute to radio and wireless transmission pioneer Nikola Tesla.  Readers are invited to review the IEEE ComSoc Techblog archives and/or contact this author if you’d like to discuss the past year’s top telecom news and mega trends.

Tesla, whose name Elon Musk chose for his electric car company, was on the cover of Time magazine in 1931 for his achievements.  Unfortunately, he died a poor man in 1943 after years devoted to projects that did not receive adequate financing.  Although the main Tesla lab building on Long Island, New York is being restored by a nonprofit foundation — the Tesla Science Center at Wardenclyffe — the World System broadcast tower he built there was torn down for scrap to pay his hotel bill at the Waldorf Astoria in 1917. Yet Tesla’s most significant inventions resonate today.

Tesla’s ambitions outstripped his financing. He didn’t focus on radio as a stand-alone technology. Instead, he conceived of entire wireless transmission systems, even if they were decades ahead of the time and not financially feasible.  Tesla envisioned a system that could transmit not only radio but also electricity across the globe. After successful experiments in Colorado Springs in 1899, Tesla began building what he called a global “World System” near Shoreham on Long Island, hoping to power vehicles, boats and aircraft wirelessly. Ultimately, he expected that anything that needed electricity would get it from the air much as we receive transmitted data, sound and images on smartphones. But he ran out of money, and J. P. Morgan Jr., who had provided financing, turned off the spigot.

“He proved that you could send power a short distance (without wires),” said Jane Alcorn, president of the Tesla Center. “But sending power a long distance is still proving to be a hurdle. It would be monumental if it could be done.”

Tesla’s wireless house lighting scheme was the first step towards a practical wireless transmission of energy system. The most striking result obtained was two vacuum tubes lighted in an alternating electrostatic field while held in the hand of the experimenter. The wireless energy transmission effect involved the creation of an electric field between two metal plates, each being connected to one terminal of the induction coil’s secondary winding.  A light-producing device was used as a means of detecting the presence of the transmitted energy.

Tesla recognized that electrical energy could be projected outward into space and detected by a receiving instrument in the general vicinity of the source without a requirement for any interconnecting wires. He went on to develop two theories related to these observations

1.  By using two type-one sources positioned at distant points on the earth’s surface, it is possible to induce a flow of electrical current between them.

2. By incorporating a portion of the earth as part of a powerful type-two oscillator the disturbance can be impressed upon the earth and detected “at great distance, or even all over the surface of the globe.”

Tesla also made an assumption that Earth is a charged body floating in space.

“A point of great importance would be first to know what is the capacity of the earth? and what charge does it contain if electrified? Though we have no positive evidence of a charged body existing in space without other oppositely electrified bodies being near, there is a fair probability that the earth is such a body, for by whatever process it was separated from other bodies—and this is the accepted view of its origin—it must have retained a charge, as occurs in all processes of mechanical separation.”

Tesla was familiar with demonstrations that involved the charging of Leiden jar capacitors and isolated metal spheres with electrostatic influence machines. By bringing these elements into close proximity with each other, and also by making direct contact followed by their separation the charge can be manipulated. He surely had this in mind in the creation of his mental image, not being able to know that the model of Earth’s origin was inaccurate. The presently accepted model of planetary origin is one of accretion and collision.

“If it be a charged body insulated in space its capacity should be extremely small, less than one-thousandth of a farad.”

We now know that the earth is, in fact, a charged body, made so by processes—at least in part—related to an interaction of the continuous stream of charged particles called the solar wind that flows outward from the center of our solar system and Earth’s magnetosphere.

“But the upper strata of the air are conducting, and so, perhaps, is the medium in free space beyond the atmosphere, and these may contain an opposite charge. Then the capacity might be incomparably greater”.

We also know one of the upper strata of Earth’s atmosphere, the ionosphere, is conducting.

“In any case it is of the greatest importance to get an idea of what quantity of electricity the earth contains”.

An additional condition of which we are now aware is that the earth possesses a naturally existing negative charge with respect to the conducting region of the atmosphere beginning at an elevation of about 50 Km. The potential difference between the earth and this region is on the order of 400,000 volts. Near the earth’s surface there is a ubiquitous downward directed E-field of about 100 V/m. Tesla referred to this charge as the “electric niveau” or electric level (As noted by James Corum, et al in the paper “Concerning Cavity Q,” PROCEEDINGS OF THE 1988 INTERNATIONAL TESLA SYMPOSIUM, and others).

“It is difficult to say whether we shall ever acquire this necessary knowledge, but there is hope that we may, and that is, by means of electrical resonance. If ever we can ascertain at what period the earth’s charge, when disturbed, oscillates with respect to an oppositely electrified system or known circuit, we shall know a fact possibly of the greatest importance to the welfare of the human race. I propose to seek for the period by means of an electrical oscillator, or a source of alternating electric currents”.

………………………………………………………………………………………………………………………………………………….

Another Tesla invention combined radio with a remote-control device. We’d now call it a robotic drone. Shortly after filing a patent application in 1897 for radio circuitry, Tesla built and demonstrated a wireless, robotic boat at the old Madison Square Garden in 1898 and, again, in Chicago at the Auditorium Theater the next year. These were the first public demonstrations of a remote-controlled drone.

An innovation in the boat’s circuitry — his “logic gate” — became an essential steppingstone to semiconductors.  Tesla’s tub-shaped, radio-controlled craft heralded the birth of what he called a “teleautomaton”; later, the world would settle on the word robot. We can see his influence in devices ranging from “smart” speakers like Amazon’s Echo to missile-firing drone aircraft.

Tesla’s achievements were awesome but incomplete. He created the A.C. energy system and the basics of radio communication and robotics but wasn’t able to bring them all to fruition. His life shows that even for a brilliant inventor, innovation doesn’t happen in a vacuum. It requires a broad spectrum of talents, skills and lots of investment capital.

References:

https://teslaresearch.jimdo.com/wireless-transmission-of-energy-1/

Verizon has chosen Samsung Electronics as a major supplier in the U.S. telco’s push to offer high speed fixed access internet and other services over its wireless network. Financial terms of this “5G” business relationship weren’t disclosed.  Samsung’s “5G” Fixed Wireless Access network products (including 5G home routers and 5G Radio Access units) will be used for commercial deployments.

Verizon says its “5G” fixed access network will launch in the second half of this year in Sacramento, CA, which is more than two full years before ITU-R WP5D completes its IMT 2020 standards.  Verizon plans to add the same “5G” fixed broadband access service in four other U.S. markets later in 2018.  It will use cellular antennas to beam high-speed internet into consumers’ homes. Samsung will make network equipment for Verizon—including the small boxes that will sit inside each home, receiving the signal and translating it into WiFi— the companies said Wednesday, January 3, 2018.  Verizon said last month it would also use “5G” network equipment made by Ericsson for commercial launches in other U.S. markets.

Verizon estimates the market opportunity for initial 5G residential broadband services to be approximately 30 million households nationwide. In addition, it says that the 5G commercial launch will not have a material impact on its consolidated Capex in 2018 and that it expects its full-year 2018 capital spending program to be consistent with the past several years.

Last year, Verizon began “5G” fixed access trials, focused on home broadband service, in 11 U.S. markets from New Jersey to California. Samsung will provide network gear for Verizon’s launch in Sacramento, where customers will be offered the option of purchasing the faster wireless access capability.  Verizon and Samsung collaborated on 5G trials in parts of California, Georgia, New Jersey, Massachusetts, Michigan, Texas, and Washington, D.C.  Verizon and Samsung said that those trials revealed that a single 5G radio could reach the 19th floor of a multi-dwelling unit, and that broadband service was achieved using line of sight, partial Line of Sight (LOS) and even non-LOS connections. They also claimed that “environmental factors” such as rain and snow, did not interrupt “5G” based broadband service.

“The industry has been discussing 5G connectivity for years, and through our joint collaboration with partners like Samsung, we are beginning to make it a reality for our customers,” Ed Chan, chief technology architect and network planning at Verizon, said in a statement. “Sacramento is an ideal place to begin deploying 5G broadband services, providing a progressive environment for creating future use cases.”

“Together with Verizon, we have explored the vast potential of 5G through market trials across the U.S.,” added Mark Louison, SVP and GM, networks division, at Samsung Electronics America. “At the same time, Samsung applied lessons learned from these real-world trials to ensure that our complete end-to-end 5G portfolio is ready for commercial service. We are delighted to work with Verizon on this journey to create unprecedented user experiences powered by 5G.”

[Note that there’s been no mention of when “5G” mobile service might be available from Verizon.]

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

“5G” carries the potential to disrupt the broadband fixed access market for triple play services.  That market is currently dominated by cable/MSO providers like Comcast Corp. and Charter Communications Inc, but AT&T is also there with its U-verse and AT&T Fiber offerings.

Companies globally are investing billions of dollars in 5G despite continued debate over its ultimate uses beyond faster download speeds.  The three main applications areas for IMT 2020 are:

1] Enhanced Mobile Broadband

2] Ultra-Reliable, Low Latency Communications

3] Massive Machine Communications, i.e. Internet of Things (IoT)

Note that fixed broadband Internet access is not one of them!

Here’s an ITU diagram of IMT 2020 5G Use Cases from from a September 2016 ITU presentation:

Arthur D. Little has written a report called “5G deployment models are crystallizing” in which it makes the case that telcos need to find use cases now, if not to reap the benefits of being early to market then as a defensive measure. Where in the past only other telcos had the wherewithal to roll out a new generation of wireless technology, ADL points out that that’s no longer true. Non-telecom players are moving into the 5G space, including Google, Facebook, Apple, Hitachi, Scania, NEC, Ericsson, and Comau. Government agencies and telecom operators expect broad “5G” availability in many markets by 2020, but again, that won’t be based on ITU-R ratified IMT 2020 standards.

………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

“5G is a reality,” said Kim Young-ky, president of Samsung’s networks business, in an interview with the Wall Street Journal.

South Korean technology giant Samsung, a fairly small player in the network equipment world, believes its knowledge making products and components could give it an edge with telecom customers seeking to sell connectivity to a wider range of devices.  Samsung’s network business generated some 2 trillion ($1.9 billion) to 2.5 trillion won in 2017, according to research firm Counterpoint Technology Market Research. It targets annual revenue of 10 trillion won by 2022, a Samsung spokesman said.

The average U.S. consumer uses about five gigabytes of mobile data a month, Mr. Kim said. But after 5G becomes more ubiquitous in the next few years, he believes consumers will eventually use closer to 100 gigabytes monthly on new services such as virtual or augmented reality programs—or even from driverless cars that will require greater data speeds to rapidly process traffic conditions.

About two years ago, Samsung combined about 1,000 workers from different divisions including handsets, network and its central research-and-development group, to create a “Next Generation Communications Business” team dedicated to 5G.

“With 5G, it’s going to be expanding beyond your phone,” Kim Woo-june, a senior vice president in Samsung’s network business, said in an interview. The industry’s first mobile phones with 5G capabilities aren’t likely to debut until 2019, he added.

………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

AT&T last month said it would launch a “5G” trial site in Texas, after tests in other markets. Sprint Corp. and T-Mobile US Inc. have said they are working on nationwide “5G” networks, targeting late 2019 or 2020.

References:

https://news.samsung.com/us/verizon-5g-commercial-launch/

http://www.broadcastingcable.com/news/platforms/samsung-gets-piece-verizon-s-5g-action/170867

https://www.wirelessweek.com/news/2018/01/verizon-partners-samsung-5g-fixed-wireless-launch

Related Articles on “5G” Deployments:

Verizon Exec: ‘Meaningful’ 5G Deployments to Start in 2018:
http://www.multichannel.com/news/finance/verizon-exec-meaningful-5g-deployments-start-2018/411354
…………………………………………………….
Verizon 5G to launch in Sacramento in 2018 | ZDNet
http://www.zdnet.com/article/verizon-5g-to-launch-in-sacramento-in-2018/
…………………………………………………….

Verizon Tips Launch of 5G-Based Residential Broadband Service

http://www.multichannel.com/news/finance/verizon-tips-launch-5g-based-residential-broadband-service/416824

…………………………………………………….

Verizon commits to residential fixed broadband as first 5G use case, but analysts call the plan “murky”

http://www.telecomtv.com/articles/5g/verizon-commits-to-residential-fixed-broadband-as-first-5g-use-case-but-analysts-call-the-plan-murky-16206/

…………………………………………………….
AT&T Targets 5G Rollouts in 2018 After 3GPP Standards Acceleration
https://www.wirelessweek.com/news/2017/03/t-targets-5g-rollouts-2018-after-3gpp-standards-acceleration
……………………………………………….
AT&T Expects 5G in Late 2018 or Early ’19
http://www.lightreading.com/mobile/5g/atandt-expects-5g-in-late-2018-or-early-19/d/d-id/733953
…………………………………………………….

South Korea to launch first commercial 5G network in 2019
https://www.rcrwireless.com/20170525/5g/south-korea-launch-first-commercial-5g-network-2019

Overview:

The Internet Association, a Washington trade group representing prominent tech companies including Facebook, Google and Netflix, announced plans Friday January 5th to help sue the federal government over its decision to rescind Obama era FCC regulations that guaranteed equal access to the Internet (AKA “net neutrality”).  The Association said it would act as an “intervenor” in expected litigation over the FCC’s action.

That means that the Association won’t file its own lawsuit, but would join a legal action filed by others. Public interest groups and some state attorneys general have said they intend to challenge the repeal in court.

Net neutrality supporters argue that agency’s plan is illegal under federal laws that prohibit “arbitrary and capricious” changes in regulations, and that the agency didn’t gather sufficient public input on its proposal to overturn its old rules.

“The final version of Chairman Pai’s rule, as expected, dismantles popular net neutrality protections for consumers,” Michael Beckerman, president and CEO of the Internet Association, said in a statement. “This rule defies the will of a bipartisan majority of Americans and fails to preserve a free and open internet. IA intends to act as an intervenor in judicial action against this order and, along with our member companies, will continue our push to restore strong, enforceable net neutrality protections through a legislative solution.”

The FCC on Thursday posted the final text version of its new Internet rules, which it calls “Restoring Internet Freedom”  (do you believe that?).  Those rules are expected to enter the Federal Register in the coming weeks.

FCC Chairman Ajit Pai (pictured above), has said the repeal of the rules will free ISPs from regulatory burdens that harm investment.  He was scheduled to speak at the Consumer Electronics Show in Las Vegas next week, but canceled due to death threats according to Recode which stated that the cancellation was in response to security concerns.

Pai has received sharp criticism since the vote, but defended his position by saying the rules were a heavy-handed approach to government regulation. Pai canceled a planned appearance at the CES technology conference in Las Vegas next week because of death threats, technology website Recode reported Friday. It is unclear whether the threats were connected to Pai’s net neutrality decision, which has drawn rancor on social media.

Congressional and Legal Challenges:

U.S. Senator Edward Markey (D-Mass.) is seeking to secure the votes that would force a vote to reverse the FCC’s action and restore the rules, via the Congressional Review Act. The move would be somewhat symbolic, as many Republicans support the FCC’s decision and President Donald Trump would be expected to veto such an action, if it were ever to reach his desk.

This week, California state Senator Scott Wiener, D-San Francisco, introduced a bill that requires telecommunications companies doing business in the state to guarantee equal Internet access. State Senate President Pro Tem Kevin De León, D-Los Angeles, is backing a similar bill. Efforts are also under way in New York and Washington state to write their own rules guaranteeing equal Internet access to consumers.

Several government officials and advocacy groups have said they plan legal action, but they all have to wait until the FCC repeal order is published in the Federal Register.

……………………………………………………………………………………………..

Opinions and Other Voices:

Noah Theran, an Internet Association spokesman, said open Internet rules helped level the playing field among companies, both small and large, in terms of their ability to reach people.

“The best websites and apps should win in a competitive marketplace because consumers like and use them, not because an ISP is picking winners and losers online by speeding up, blocking, or throttling access to certain sites,” Theran said in an email.

AT&T Senior Executive Vice President Bob Quinn said in a blog post after the December 2017 vote that “the Internet will continue to work tomorrow just as it always has.” He added that the company won’t block, censor or slow traffic to websites “based on content, nor unfairly discriminate in our treatment of Internet traffic.”

References:

https://internetassociation.org/statement-restoring-internet-freedom-order/

http://www.sfchronicle.com/business/article/Facebook-Google-Netflix-join-fight-to-restore-12477404.php

https://www.wired.com/story/tech-giants-to-join-legal-battle-over-net-neutrality/

https://www.fcc.gov/document/fcc-releases-restoring-internet-freedom-order

http://techblog.comsoc.org/2017/12/14/fcc-votes-to-reverse-net-neutrality-not-regulate-broadband-industry/

Internet Association Will Join Legal Battle to Fight FCC’s Net Neutrality Repeal

AT&T says it will use small cells for its mobile “5G” service planned for 12 U.S. cities this year. The company’s first of these roll outs will use millimeter wave [1] spectrum, which offers higher capacity rates than low-band spectrum but does not propagate over large distances. That requires transmit/receive radios need to closer together than they are in LTE deployments.

Note 1.  Millimeter wave (also millimeter band) is the band of spectrum between 30 gigahertz (Ghz) and 300 Ghz.

“Millimeter wave is more associated with small cell-like ranges and heights,” said AT&T’s Hank Kafka, VP of network architecture. “It can be on telephone poles or light poles or building rooftops or on towers, but generally if you’re putting it on towers it’s at a lower height than you would put a high-powered macrocell, because of the propagation characteristics.”

“5G will change the way we live, work and enjoy entertainment,” said Melissa Arnoldi, president, AT&T Technology and Operations. “We’re moving quickly to begin deploying mobile 5G this year and start unlocking the future of connectivity for consumers and businesses. With faster speeds and ultra-low latency, 5G will ultimately deliver and enhance experiences like virtual reality, future driverless cars, immersive 4K video and more.”

AT&T has announced 23 cities that are getting its 5G Evolution infrastructure, which the company describes as “the foundation for mobile 5G.” Those cities are Atlanta; Austin; Boston; Bridgeport, Connecticut; Buffalo, New York; Chicago; Fresno, CA; Greenville, South Carolina; Hartford, Connecticut; Houston; Indianapolis; Los Angeles; Louisville; Memphis; Nashville; New Orleans; Oklahoma City; Pittsburgh; San Antonio; San Diego; San Francisco; Tulsa, Oklahoma and Sacramento, California.

AT&T’s deployment of small cells to support mobile 5G will be largely independent of another 2017 AT&T infrastructure initiative – the build-out of the 700 MHz spectrum for FirstNet.

“Where appropriate we’re always going to try and get as much synergy as we can … but there’s a difference between dealing with small cell sites and dealing with macro sites,” Kafka said.

“You’ll find that a lot of radios that suppliers are putting out now are going to be upgradeable to support 5G,” Kafka said. “Some of the radios we’re deploying now do have that capability in the hardware.”

Kafka said that in some instances, tower crews might be able to add “5G” equipment near the base of the tower at the same time they add 700 MHz radios to the top. But the synergies between the two deployments are limited.

………………………………………………………………………………….

In sharp contrast to AT&Ts endorsement of millimeter wave technology, Sprint’s CTO John Saw said last week that he is not sure that using millimeter waves to deliver 5G services is a practical economic use of the high-band spectrum and that Sprint will be focusing on using its existing bandwidth to initially deploy 5G.

“What is the cost to deliver a bit over millimeter waves? Where is the business case on that?” John Saw asked at the Citi conference in Las Vegas.

………………………………………………………………………………………………………….

Verizon CTO Hans Vestberg told a CES panel last week that Verizon “will be first” to deploy 5G.  Verizon is moving ahead with deployment of pre-standard fixed-wireless 5G service, starting with a rollout in Sacramento, California in the second half of this year. But Vestberg noted fixed-wireless is just one part of what Verizon plans to do with 5G.

“From 5G you can do different slices. We are now focusing on one slice, which is basically residential broadband to deliver superior performance quicker to market…That’s one use case, we can talk about many others.”

References:

https://www.rcrwireless.com/20180111/carriers/att-mobile-5g-will-rely-on-small-cells-tag4

https://policyforum.att.com/att-innovations/preparing-5g-need-small-cell-technology/

http://about.att.com/story/att_to_launch_mobile_5g_in_2018.html

http://techblog.comsoc.org/category/5g/

http://www.lightreading.com/mobile/5g/sprint-says-no-to-mmwave-yes-to-mobile-5g/d/d-id/739592

Verizon CTO vows to beat AT&T to 5G

In December 2017, China’s Ministry of Industry and Information Technology (MIIT) released a five-year plan outlining a road map for commercial and technological progress in a broad set of optical technologies.

China has optical component makers, but they have generally produce lower-speed devices that lag U.S. companies by a product generation.  China’s efforts to develop a domestic optical industry aims to support optical network equipment makers,  such as Huawei and ZTE, according to Jefferies analyst Rex Wu.

The 63-page MIIT document is written in Chinese (Mandarin), but Cignal AI commissioned a professional English translation which summarizes the section of the plan about the Chinese optical components industry.

Cignal AI reports:

The goals and objectives outlined in the plan are exceptionally ambitious and should gravely concern incumbent component vendors. This document outlines strategic rather than rational economic objectives to catalyze market progress in Chinese component companies. Our interpretation is that this will increase the number of non-rational economic actors participating in the component market.

If executed, this plan will greatly increase the level of competition in an already fractured industry.  It will also reduce or in some cases eliminate access for western component vendors to the largest market for optical communications components in the world – China.

……………………………………………………………………………………………………………

NeoPhotonics, Oclaro, Acacia, Lumentum, and Finisar sell the most optical components to China, says a UBS report. Those optical parts makers took a hit in 2017 as demand weakened from China’s telecom service providers. Analysts have been expecting a rebound in 2018 spurred by spending on fiber-optic networks, 5G wireless backhaul and data centers designed for cloud computing services.

China’s domestic optical component makers include O-Net, Accelink and Innolight.

“The government aims to have two to three Chinese optics companies in global top 10 in 2020, and one company in global top 3 in 2022,” Mr. Wu wrote in a Jefferies report to clients. “The market share of Chinese optics companies will reach over 30% worldwide in 2022,” according to the government’s plan, he added.

References:

https://cignal.ai/2018/01/chinas-5-year-optical-component-plan/

https://www.investors.com/news/technology/does-china-optical-plan-mean-trouble-for-oclaro-lumentum-finisar/

http://techblog.comsoc.org/2017/12/15/lightcountings-3q-2017-optical-market-update-chinas-optical-network-comeback/