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Monday, May 04, 2020

Mobile standards may fragment again, driven by geopolitics

I think we might see a return to the old days of multiple competing mobile standards.

But rather than the US/Europe technical war of 2G/3G over the nuances of GSM & CDMA, this time I see a scenario driven more by US/China geopolitics and ideology, enabled by various technology catalysts.

[This is an extended and more nuanced version of a post of mine on LinkedIn - link, which I edited to fit the 1300chrs limit. It's worth looking at the discussion in the comments there]

The past: how LTE and 5G became global standards

To understand how we got here, and why we might diverge in future, we need to look at the past. Historically, there were two main competing camps for 2G and 3G networks:
  • GSM/UMTS, championed by 3GPP and Europe-centric players such as Ericsson, Nokia and major European operator groups such as Vodafone & Telefonica.
  • CDMA, driven by US companies, especially Qualcomm and Verizon, plus also Sprint, Lucent, Nortel and others, organised via 3GPP2
Back around 2006-7, when 4G was being designed and specified, a number of options were proposed:
  • LTE was the 3GPP's option
  • UMB was the CDMA/3GPP2 approach, leaning heavily on Qualcomm's acquisition of Flarion, which was developing an IEEE 802.20 wireless system.
  • WiMAX, which came from vendors with a Wi-Fi background, notably Intel. That was an IEEE technology too - 802.16.
For various reasons, LTE won, and the others disappeared. (I wrote plenty about this at the time, if you want to go through my archived posts, such as here and here). 

IEEE still technologies dominate in local networks such as Wi-Fi and "personal area networks" such as Bluetooth, but for wide-area mobile, the 3GPP dynasty rules supreme.

But there's a back-story to LTE's success, and its rise as the single global standard for 4G.

In the 3G era, it wasn't just UMTS vs. CDMA2000, but also the Chinese TD-SCDMA standard. (& minor proprietary techs, such as Nextel's & Motorola's iDEN)

TD-SCDMA never gained traction outside China's domestic market, but it helped build the local industry to scale and then evolved into TD-LTE for 4G, which was folded in as part of the global LTE story.

The world's mobile-dedicated spectrum comes in two varieties - FDD (frequency-division duplexing) which uses separate 'paired' bands for uplink and downlink, and TDD (time-division duplexing) which uses a single 'unpaired' band, alternating between up/down slices of time. 2G and 3G were dominated by FDD radios. The inclusion of TD-LTE enabled 4G to access both categories. (WiMAX was TDD-only, a major failing).

The Europe+China combination made 3GPP / LTE unstoppable, especially given the extra scale in terms of both market size and spectrum it enabled. It also cemented Huawei's role as a powerhouse, and partly led to Alcatel's acquisition by Nokia and Nortel's cellular business by Ericsson. Qualcomm's conversion to the LTE cause helped too.  

In parallel to the radio, the 4G cellular core network (EPC) also rose in perceived importance compared to 2G/3G eras, as it allowed MNOs much greater control over data flows. It also allowed vendors easier lock-in.

For the last 11 years, the mobile industry has exploded, partly because of LTE's ubiquity and scale economies, and partly because of the simultaneous rise of the iPhone and Android. It's worth noting that 3GPP's original vision for 3G and 4G didn't see access to the "public Internet" as a core part of the service, although it now dominates usage and value.

In recent years, we have seen the 3GPP "global standard" continue to evolve to 5G, with Huawei, Nokia, Ericsson, Qualcomm dominating the landscape again, plus Samsung and a few others following behind them. At the moment, most 5G is "non-standalone", using the existing 4G cores - and thus again locking-in the established vendors, and the existing powerful core and exclusive national-licence philosophy favouring traditional large MNOs.

However, the 5G vision of many of the industry "old guard" is still centres on the them vs. us approach to network control and "native" (ie telco-delivered) services. There's still the almost-bigoted rhetoric and lobbying about so-called "OTTs" (an obsolete and self-damaging term, in my view), and the attempt to dilute - or at least monitor - the user's desire & ability to access open Internet applications and even connect independently via Wi-Fi.


But now, I see clouds gathering - or new rays of sunshine, depending on your perspective.

I think that geopolitics may undermine the "single global standard" for mobile, along with some conveniently-timed technical evolution paths. This is not a forecast, or even the most likely outcome - but I believe it is solidifying into a much more realistic scenario.

For the later stages of 5G (from Release 17 onwards), and then beyond that with the evolution of 6G, I think the US might be about to diverge from the last decade's consensus.

The Sino-US politics were already stark, even before the COVID19 pandemic added more fuel to the fire. We have already seen massive pressure with regard to Huawei, not just in North America but across Europe and other OECD countries such as Japan and Australia. The US has previously taken action against ZTE as well, and more recently has started even discouraging interconnection with Chinese telcos (link). 

Apparently, the US tech industry is now being pushed/advised to avoid working with China, even on standards development (see this Economist article, although it may be behind a paywall for some - link). That potentially weakens US influence at 3GPP, and could prompt it to seek alternative paths forward. We can expect the US Presidential campaign to focus on this theme as well, over the next 6 months - although both major US political parties have been fairly unified on the ongoing trade disputes with China.

There are also some signs of tougher views in Europe. Even though the UK and EU have allowed continued limited engagement with Huawei, the politics is still hardening, especially in the wake of the virus' trajectory (link).

But this is not just about geopolitics. It is also about technology "philosophy". I see something of a divide here, too. In a way, it's a modern-day version of the Bellheads vs. Netheads battle of the past (link):

  • Control: On one side is a vision of mobile world with strong vendor / MNO / national control, evolved from today's 3GPP & GSMA vision. This has
    • Strong policy control - and eventually network-slicing - delivered from a powerful core network. 
    • Deep reach down into devices, from SIMs to connectivity management, and perhaps surveillance options. 
    • A big focus on optimised & automated infrastructure, which probably favours single-vendor (or at least big-vendor) approaches. 
    • An expectation of exclusive national spectrum licenses, with limited scope for local or enterprise networks which do not also lean on MNOs' services. 
    • There's also a lot of work aimed at reinventing TCP/IP in ways that give telcos more control, as well. 
    • Edge-computing is integrated into the telco domain as much as possible, and delivered as part of a "slice" or MNO service.
  • Openness:The other world vision has a more open / Internet-centric approach. It's more "permissionless" with vendor or even operator lock-ins of any sort being anathema. There's:
    • Less core-network control, favouring local breakout & device-led multiple connections, without the MNO (or government) having a panopticon view of traffic. 
    • An emerging focus on disaggregated & open RAN models (O-RAN, TIP, OpenRAN etc), favouring multivendor- and IT/cloud -centric architectures. 
    • An expectation of Wi-Fi indoors, often owned and controlled by a non-MNO. 
    • Growing availability of more-open spectrum with dynamic / local licenses, as well as traditional exclusive bands as a foundation. 
    • Edge computing is primarily an enabler of telecom networks, not delivered by them - and the expectation is that most will be neutral or independent, in local 3rd-party datacentres/modules or on enterprise premises.
In a way, this is almost a 3GPP vs. IEEE/IETF divide, but just as politics has shifted from a left/right axis to open/closed, perhaps something similar is happening here too.

It's not clear that the wireless world will cleave cleanly along this divide, especially in the near future as 5G is still being deployed. AT&T and Verizon will not be happy relinquishing control-points, either. So today, we have some fairly messy - and maybe unworkable - hybrids. There's lots of talk about opening APIs for enterprises to configure their own 5G slices. We have some grudging approaches to blending cellular and Wi-Fi, and various moves to enable "non-public networks" for enterprise in Release 16 & 17 of the 5G standards. But even that phrasing is awkward and somewhat derisive - as is the term "non-trusted" to describe other access networks.

But the technology forces are clear, even beyond the politics. In the last year or so we have seen:
  • CBRS launching, with dynamic spectrum and a focus on new use-cases and business models, especially enterprise/local networks. It is catalysing a new vendor ecosystem of small cell suppliers, cloud EPCs and specialised SPs and integrators.
  • Huge interest in local/private spectrum and networks in Germany, UK, Japan and elsewhere
  • Rakuten, Dish and other operators validating the vRAN model and working with new US-centric vendors like Altiostar and Mavenir. (Rakuten is, like Softbank, an Internet company diversifying into cellular. Dish isn't "old school" mobile, either, but a satellite TV provider).
  • Huge upswing of presence of IT/cloud players in cellular infrastructure, including acquisitions. IBM/RedHat, Dell/VMware, Microsoft/Affirmed, HPE, Oracle - plus AWS and Google taking various roles from RAN to core, as well as Facebook with TIP and its new stake in Reliance Jio
  • A massive tranche of 6GHz spectrum being made available on an unlicensed basis in the US, primarily for Wi-Fi6E, but also maybe 5G variants in future as well. This has further killed off the (already implausible) idea that cellular-based LANs might edge out Wi-Fi
  • Fragmentation of the EPC / 5G Core marketplace, with low-cost / cloud-based / programmable / "light" variants that look like a normal piece of the IT stack, rather than arcane telco wizardry. (I wonder if we'll see "core-optional" mobile networks - but that's for another post).
  • More interest in mmWave in the US and South Korea, including for indoor use.
  • FCC and the White House have taken a close interest in 5G and next-gen wireless, and seem keen to foster a local technology ecosystem for mobile (link)
  • Innovation in satellite constellations such as SpaceX's Starlink
  • Plenty of other big US-centric technology players watching closely, such as Cisco, Juniper and of course Apple.
  • (I know there's also various moves around evolving TCP/IP, but I haven't had a chance to get my head around them yet).
We might still see 5.5G and 6G world emerge as an elegant hyper-converged version of these two philosophies. And we'll certainly see firms such as Ericsson and Huawei try to continue the 3GPP/control vision, while also exploring the opportunities and tools from the other side. Neither seems especially happy with the rise of local/private spectrum or pure-play enterprise and neutral-host providers. It's easier to sell direct to 100s of MNOs, than 10000s of enterprises via a myriad of new channels and integrators.
I'm also interested to see what happens with ownership of Nokia (which seems a bit more open to the new realities) given its financial woes - and also how the European governments and regulators act. Is Europe a bridge between the two worlds, or does it fall in the gap? 

In many ways, I see the EU model lean more towards MNO control, with governments happier to focus regulation on competition at commercial levels, rather than technical - it tends to push harmonisation heavily, as a consequence of its previous success with GSM which catalysed the whole sector. There is more wiggle-room around enterprise and local spectrum licensing, given the strong lobbies for manufacturing and other industrial sectors., plus more emphasis on privacy.

I can imagine Japan aligning more with the US vision, but South Korea in a similar position to Europe. A year ago, Samsung was the obvious beneficiary of Huawei's problems. Now, it's probably the OpenRAN ecosystem that's the effective #3 choice.

At the moment, I'd rate the chances of a more-serious and clearer split at 30% and rising. It won't happen overnight - I think that Release 17 is probably the trigger-point. By the time we get to 2030 and 6G though, I wouldn't be surprised to see a revival of something that looks like 3GPP2, or perhaps (whisper it, as many will cringe) WiMAX2. At the very least, it will be more Internet-flavoured.

If the "old guard" vendors and their institutional peers within 3GPP, GSMA, ETSI etc. want to avoid this bifurcation, they are going to have to make some difficult decisions, and soon. Otherwise the potential to be disrupted from adjacency will grow. They need to be genuinely open, and start loosening the vision of pure "end-to-end control", and embracing imperfect, inelegant pragmatism about network design, operation and ownership. Exactly how that fits with the worsening geopolitical landscape is a problem I'll leave for the diplomats and spin-doctors.

Note: If you are interested in understanding more about this scenario, or are looking for an analyst or advisor to help formulate strategy in the wireless technology space, please get in touch with me. I can be reached via LinkedIn, @disruptivedean on Twitter, or via information at disruptive-analysis dot com.