10 Principles for Telecoms Vendor Diversification in the UK & Beyond

This was originally published as one of my newsletter articles on LinkedIn. Click here for discussion and commentary & to subscribe. 

 Introduction

The UK is currently a hive of activity for government and regulatory involvement in telecoms. I can’t remember a time when so much emphasis has been put on my domain – from election commitments on gigabit broadband, to concerns over “high risk vendors” (HRVs) – notably Huawei.

This week has seen further progress through Parliament of the Telecom Security Bill (link) which makes telcos face legislation on cybersecurity and HRVs. There has also been the linked publication of the 5G Supply Chain Diversification Strategy (link), which ties the removal of Huawei gear with the government’s intentions to expand operators’ choice of other vendors.

I’m going to be spending considerably more time on the policy aspects of telecoms in coming months – not just my normal areas like spectrum, but more broadly the intersection with geopolitics, technology evolution and industrial strategy, competition and trade.

This article focuses on the diversification aspects - my thoughts on the published strategy, plus what I’d like to see in recommendations from the Task Force and policies from government in 2021. It’s a follow-on from my recent post on interoperability. Note: I’m not revisiting the HRV or Huawei issue here.  

I should stress that this isn’t just parochial and UK-specific - it has wider ramifications on the global telecom market, and links up with activities in Brussels, Washington and elsewhere, such as the US Open RAN Policy Coalition, and the EU’s cybersecurity “toolbox” and upcoming European Cybersecurity Strategy review.

Disclosure – my advisory clients span a broad range of UK and international organisations, from startups to large vendors, service providers of numerous types, investors and branches of government. I work with companies and organisations that enable closed macro & small-cell networks, Open RAN, Wi-Fi, satellite connectivity and more. As people who know me will attest, my opinions are my own – and attempts to influence them will often backfire, even if made by paying clients. In fact, people pay me because I regularly say things they don’t want to hear. I like saying “no”.

Background

 Even before the pandemic there was huge UK government engagement – and manifesto commitments - on “full fibre”, 5G mobile networks, sponsored testbeds & trials, and even satellite communications with the investment in OneWeb.

A lot of my own focus in recent years has been triggered by the Future Telecom Infrastructure Review in 2018, which kicked off the current regulatory enthusiasm for localised spectrum, enterprise/private cellular and neutral host networks – although other commentators had also advocated this for some time previously (*coughs modestly*).

In the last 6-12 months, there has been a specific focus on “supply chain diversification”, and a desire by policymakers to increase the number of equipment/software vendors in the market for network infrastructure. This isn’t new – the Government published its initial Telecom Supply Chain Review in mid-2019 – but it has lately taken on greater urgency.

The largest catalyst has been the recent action taken on Huawei and what that means for supply of equipment in the UK as a result, particularly for national 5G RAN build-outs by the four main UK MNOs BT, Vodafone, Telefonica O2 and 3UK.

The net result of this has been the establishment of the UK Telecoms Diversification Task Force as an advisory group (link), aligned with an internal project to develop a strategy and policy for broadening the vendor base, being run by DCMS (Department of Digital, Culture Media & Sport).

The new strategy document highlights what it sees as a duopoly of Nokia and Ericsson, especially for macro RAN gear, and suggests that if that continues it implies a risk to future resilience of the supply-chain. During the various Science & Technology committee hearings this year, there has been input from vendors, operators, security officials, task force members and others.

The discussion has largely been 5G-dominated, although the strategy document also mentions fixed-infrastructure diversification (subject to ongoing consultation and review). Many of the parliamentarians seem to think 5G is something special, and have bought into the “unicorn” visions of GDP uplift and “ubiquity”. (My regular readers know that 5G is “just another G” – an important upgrade, but not something which will change the world).

The strategy proposes three areas of action:

• “Supporting incumbent suppliers” (Nokia and Ericsson) as major vendors, but suggests various approaches towards nudging them to greater levels of openness.
• “Attracting new suppliers into the UK market” – this essentially means working out ways to get Samsung, NEC & Fujitsu more involved, as well as others. The parliamentary debate’s speakers also name-checked Mavenir, Parallel Wireless, Rakuten’s platform business and others.
• “Accelerating open-interface solutions and deployment” – which refers more to the realm of industrial policy around Open RAN, and components such as semiconductors.

As you might imagine, I’ve got some fairly trenchant opinions on much of this.

Is the market that concentrated?

Clearly, the UK MNOs are today almost entirely dependent on Huawei, Nokia and Ericsson for their macro RAN deployments, although Samsung has previously been present in the 3UK’s 4G network, and Vodafone has recently started deploying gear from Mavenir in its Open RAN deployment.

However, some countries such as the US and Japan have maintained a greater diversity in macro RAN supply, despite a lack of Huawei gear - although there are some differences compared to the UK. Continued support of older 2G/3G services currently relying on combined “single RAN” infrastructures is a valid concern – and the Diversification report suggests it might be possible to sunset or improve interoperability there. The Samsung presentation and letter to the committee also had some suggestions about this (link).

I think there’s perhaps also a link to the historical “3GPP monoculture” in UK/Europe. Other regions had a mix of GSM, CDMA and local alternatives, which fostered greater supply fragmentation originally, which endured over time as the "single RAN" approach wasn't as much of an obvious win (or lock-in).

It is worth noting that there is already good diversity for private cellular networks and specific mobile products such as 4G/5G cores, indoor wireless and other niches such as fixed-wireless access. Many alternative suppliers are gaining traction first in rural and other “secondary” areas, rather than dense urban macro locations.

One aspect the government hasn’t appeared to consider is how much of the anticipated 5G “upside” (whether you believe the $billions GDP numbers or not) is conveniently located in these very contexts which have greater levels of supply diversity. Many of the expected new 5G applications are indoors (in factories, hospitals etc), or in sectors such as agriculture.

Another set of “advanced connectivity” applications have alternative technology options, especially over the 3-5 years it will take 5G to mature. WiFi 6/6E/7, LoRa, 60GHz FWA, new satellite constellations and proprietary platforms like Amazon Sidewalk all offer alternatives to 5G. Yet I still hear people talking about 5G for low-latency AR/VR in peoples’ homes when it’s obvious that 90%+ of that will use Wi-Fi, for multiple reasons.

Reading the report and listening to the debates, there seems to be a certain amount of hindsight here, with regrets that previous governments hadn’t thought through possible consolidation from three big cellular vendors to two, irrespective of which was taken out of the equation or how. Some speakers went back further, to the days of Nortel and Marconi, mourning the loss of greater diversity and national sovereign capability.

There’s also an implied sense of worry that one of the existing incumbents might make a mis-step. It’s notable that the “supporting incumbents” line was absent in January discussions, but was perhaps catalysed by Nokia’s 5G woes earlier in this year. The US Attorney General floating the possibility of a US company acquiring either Nokia or Ericsson, probably raised the stakes even further, even if that suggestion was rapidly shot down at the time.

Other concurrent drivers have related to Brexit, trade deals with Japan (and presumably EU, US and S Korea in future) and the enthusiasm of the current administration for more “industrial policy”. There is interest in state-aid for many areas of technology, ranging from hydrogen-powered aircraft (“Jet Zero”) to biotech to quantum computing, with the aim of improving the UK’s export and trading prospects in new and emerging areas. Telecoms technology needs to be seen in the context of a very expansive vision from artificial meat to nuclear fusion. (Wearing my futurist hat, I heartily approve of this).

Open RAN & disaggregation

Perhaps the least-cohesive part of the strategy document (and some initial actions like the testing and interoperability lab announcements) is the focus on Open RAN as the main saviour of supply-chain diversification. It got a huge amount of airtime in the DCMS report, as well as in politicians’ speeches.

In my view, Open RAN is similar to 5G more generally – important, but getting rather over-hyped. It’s going to be very important in future, but it's not the only game in town. Perhaps it will form the centrepiece of 6G, but for 5G macro – which is being deployed now – it’s going to be secondary, even if some of the Huawei rip/replace by 2027 uses it.

There seems to be quite a lot of disagreement between the MNOs as well – Vodafone is clearly a fan, while BT and 3UK seem more sceptical, with O2 somewhere in the middle.

I’m far from convinced that some of the detailed aspects in the document and annex – going as far as discussing eCPRI interfaces and 7.2 O-RAN splits – are the pivot-points for the overall diversification or resilience story. We don’t have TIP specs for OpenRAN 5G Massive MIMO yet, and may not get there for quite a while.

We’ll see a growing amount of vendor orientation on cloud and open RAN approaches anyway – Samsung, NEC and even Nokia are pursuing it. Ericsson and Huawei are being more diffident, but also seem to recognise that virtualisation is important, even if they’re not breaking open all bits of the RAN. Ericsson's recent Cloud RAN announcement could reasonably be described as "tentative" (link).

While there’s a lot of action and excitement with Rakuten, Dish and other greenfield networks, that doesn’t mean that operators in the UK or elsewhere would necessarily follow suit, even if they could do it tomorrow. It would be nice for the option to be there – but I’m a little concerned that the document asserts that interoperability should always be a default rather than a viable option. (If you haven’t seen my post on interop, have a scan through it here). Different operators have different views - and different legacy infrastructure.

Think of an analogy: should the government also suggest that Airbus planes should interoperate with Boeing avionics? Or, for that matter, how many of the advocates would accept Linux as the “default” OS for their laptops, rather than being able to choose Windows or MacOS if they prefer?

I expect we'll see a growing amount of Open RAN in rural and then perhaps suburban areas - but it's going to be a long time before it's common in existing MNOs' urban cores and high-density macro domains. It's an interesting platform for neutral host networks too, as the NEC trial points out. It is part of the overall “choice architecture” for future networks, but arguably the most interesting domains for advanced connectivity will get more choice / vendor competition from non-5G technology options. The normal 5G macro RAN is more about capacity for smartphone broadband, rather than clever new applications. 

What we should aim to see from future UK Diversification recommendations & policy

What comes next is the Diversification Task Force recommendations, which are expected early in 2021. This will feed into the policies and actions taken by the rest of government – potentially DCMS, although some have suggested aspects should reside with Ofcom, the security agencies or other departments.

As some external input, I thought I’d lay out some my own preferences, principles and what I’d like to see. (I may also submit more formal comments into the consultation process).

• Clarity of purpose(s): There is a tendency in the report and parliamentary debate to conflate security, supply resilience, competition, innovation, export opportunity and other drivers for telecoms (de)regulation. All are valid concerns and thus represent areas for government to become involved – but any individual recommendations or rules should break out the underlying purpose(s) clearly. Obviously, few politicians or media commentators are experts in telecoms networks arcana – so communications across Westminster and beyond needs to be crisp, and misconceptions and misrepresentations pointed out swiftly. Soundbites and spin always get attention – but must be rooted in technical reality rather than convenience and media-friendliness.
• Technology neutrality: While there are specific concerns about 5G RAN as it’s a major current focus of investment – and because the intelligence/core functions are increasingly distributed – it’s far from the only important telecom technology, or the only one with a concentrated supplier base. 4G mobile, fibre and fixed-line broadband infrastructure, satellite and assorted other wireless technologies should also be considered as part of diversification. There’s no major UK Wi-Fi player, for instance, which ideally would be rectified. At a component level, we should rightly be considering semiconductors, but also many areas of cloud and software elements involved in ever-more-virtualised telecom networks as well.
• Business model neutrality: This links to my recent post on interoperability. Governments shouldn’t mandate either proprietary or interoperable interfaces, or vertically-integrated or disaggregated solutions – as long as there’s enough competition. Openness is good – but both highest-performance and lowest-cost options may involve “black boxes”. Open RAN (which in any case needs more careful definitions and comes in multiple variants) has huge promise, but shouldn’t be a political football either. We should be encouraging market forces to operate effectively, in the demand side of telecoms networks. Choice is imperative. (You could say the same about net neutrality: if customers have a choice of 10+ ISPs, it doesn't really matter if one of them sells "Ain'ternet" as long as it's accurately marketed & distinguished from the real thing).
• Realistic time horizons & paths: Regular readers of my posts may have noticed increasing mentions of “path dependence”. Timelines matter. If there’s an awkward 4-year gap between promise and reality for a given technology, for instance because of lengthy testing and commercialisation, that needs to be recognised upfront. We can’t leap straight to 6G, terabit FTTx or massive LEO satellite constellations, even if the UK might have an edge in specific components. The new rules need to reflect realistic time horizons – including buffers for delays. That’s especially relevant for things like Massive-MIMO 5G radios.
• Removing obstacles: The UK’s telcos will continue to need large and medium sized international vendors for the foreseeable future. Ericsson and Nokia will obviously remain central, and we should be looking to encourage Samsung, NEC and Fujitsu in 5G – as well as the continued roles for Mavenir, AirSpan, Parallel Wireless, Commscope, Cisco, Juniper, Microsoft and so on. We need to address why, for instance, Samsung is largely absent from UK MNOs’ networks, despite its profile in Korea and the US. If it is about the need for continued support of 2G/3G and other legacy systems (for instance to support eCall), then we should be considering creative solutions for this. I could even imagine a government-sponsored 2G shared network to support M2M and emergency calls, leaving MNOs to focus on 4G/5G differentiation (and reclaiming spectrum).
• Global vision: While I can understand why government likes the idea of home-grown UK telecom startups thriving, this vision needs to be tempered with reality. It isn’t realistic to expect UK firms to tackle all aspects of network infrastructure at the scale and expertise needed by major telcos. This doesn’t just mean “heavy iron” macro 5G networks, but also future elements such as fibre transport or hyperscale cloud for next-generation platforms. There won’t be a UK (or European) equivalent to AWS or Azure any time soon, nor a Qualcomm equivalent. If domestic self-sufficiency and ownership was a desire, there would have been obvious questions about recent sales of ip.access and Metaswitch. The diversification review should address areas where the UK should expect to collaborate internationally – as well as its contribution to new standards, for instance on 6G development.
• Supporting cast: For all the various reasons mentioned above – security, supply resilience, export opportunity and so forth – the “leading actors” of MNOs, semiconductor designers and network hardware/software vendors will need other sets of market players to evolve in tandem. Government is right to be creating testing labs, but should also look at training centres for engineers and installers, university courses, systems integrators, infrastructure financiers, insurance providers and many others. It doesn’t have to (and probably shouldn’t) fund all of these, but it can perhaps advocate for their growth, and help remove barriers if they exist. How many indoor mmWave 5G URLLC vertical specialist engineers - or OpenRAN Massive MIMO maintenance teams - are there in the UK? How can we multiply that by 100x?
• Flexibility to respond to emergent events: Linked to path-dependence is the concept of protecting “optionality”. I can come up with a range of scenarios under which the world might evolve in surprising directions, both technologically and geopolitically. China might reach a different set of compromises with Joe Biden on network vendors, components and trade. Brexit and new UK trade deals may impact supply chains and telecoms demand in unexpected ways – positive or negative. New cybersecurity vulnerabilities might come to light – or new safeguards developed. Any new policies on diversification should aim to enable new vendors and standards, rather than add constraints such as mandating specific interfaces.
• Industry verticals & new applications: The UK authorities, like others around the world, seem focused on Industry 4.0, automation, IoT and the potential benefits of greater network-intensity in many sectors. This filters through to the idea of private networks, cloud/edge computing and other adjacent domains. It may also feature high on the telecoms diversification agenda. My view is that this should revolve around a general principle of “advanced connectivity”, rather than specifically relating to 5G and its supply chain. Wi-Fi, fibre, LoRa, Bluetooth and even proprietary network solutions have equally-important roles to play, and as before, neutrality of policy is desirable. The government should consider technology substitution between options, as well as vendor choice within one technology.
• Awareness of energy & CO2 implications: One of the trade-offs of “abstraction layers” and simplicity/flexibility can sometimes be increased power consumption. “Software-defined X” or “Adaptive Y” can involve lower efficiency than something optimised or hardware-based. The UK should be thinking about a future of networks where everything has a CO2 budget – perhaps with cascading carbon taxes built in. Rather than least-cost routing, we might find networks built around lowest-energy optimisation. I didn't see anything about energy or CO2 in the strategy document.

Overall, as a UK-telecom industry analyst and advisor, I see this as both worthwhile and exciting – and I’m keen to participate in one way or another when possible. I’m certainly intending to check up on how the ongoing pronouncements fit with the principles I’ve outlined here. (I'll also be pondering the international ramifications and linkages).

I think the existing Diversification Strategy makes some good points and has clearly taken inputs from numerous well-placed and knowledgeable sources. However, it’s a bit too focused on 5G, Open RAN and macro networks, rather than the broader realm of “Advanced Connectivity”. I'd like to see more technology neutrality and optionality across the board.

It also blends together multiple issues – cybersecurity, resilience, UK industrial policy, competition, technical philosophy and so on – when they sometimes only have tenuous or debatable links. Interoperability is used as a “glue” to stick together the separate parts. I’d rather see broad top-level goals such as “security” and “optionality” and separate self-consistent analysis for each purpose.

As always, I'll aim to respond to the comments and discussion as much as possible. And please get in touch via email or LinkedIn, if you'd like a deeper dive on any of these areas.

#5G #policy #DCMS #wireless #telecoms #regulation #openran #interoperability #wifi #fibre #broadband #IoT #neutralhost #6G

Interoperability is often good – but should not be mandated

Note: this post was first published via my LinkedIn Newsletter. Please subscribe (here) & also join the comment & discussion thread on LI

Context: I'm going to be spending more time on telecom/tech policy & geopolitics over the next few months, spanning UK, US, Europe & Global issues. I'll be sharing opinions & analysis on the politics of 5G & Wi-Fi, spectrum, broadband plans, supply-chain diversity & competition.

Recently, I've seen more calls for governments to demand mandatory interoperability between technology systems (or between vendors) as a regulatory tool. I think this would be a mistake - although incentivising interop can sometimes be a good move for various reasons. This is a fairly long post to explain my thinking, with particular reference to Open RAN and messaging.

Background & history

The telecoms industry has thrived on interoperability. Phone calls work from anywhere to anywhere, while handsets and other devices are tested & certified for proper functioning on standardised networks. Famously, interoperability between different “islands” of SMS led to the creation of a huge market for mobile data services, although that didn't happen overnight in many countries.

Much the same is true in the IT world as well, with everything from email standards to USB connections and Wi-Fi certification proving the point. The web and open APIs make it easier for cloud applications to work together harmoniously.

Image source: https://pixabay.com/illustrations/rings-wooden-rings-intertwined-100181/

 But not everything valuable is interoperable. It isn't the only approach. Proprietary and vertically-integrated solutions remain important too.

Many social media and communications applications have very limited touch-points with each other. The largest 4G/5G equipment companies don’t allow operator customers to mix-and-match components in their radio systems. Many IT systems remain closed, without public APIs. Consumers can’t choose to subscribe to network connectivity from MNO A, but telephony & SMS from ISP B, and exclusive content belonging to cable company C.

This isn't just a telecom or IT thing. It’s difficult to get different industrial automation systems to work together. An airline can’t buy an airframe from Boeing, but insist that it has avionics from Airbus. The same is true for cars' sub-systems and software.

Tight coupling or vertical integration between different subsystems can enable better overall efficiency, or more fluid consumer experience - but at the cost of creating "islands". Sometimes that's a problem, but sometimes it's actually an advantage.

Well-known examples of interoperability in a narrow market subset can obscure broader use of proprietary systems in a wider domain. Most voice-related applications, beyond traditional "phone calls", do not interoperate by default. You could probably connect a podcast platform to a karaoke app, home voice assistant and a critical-communications push-to-talk system.... but why would you? (This is one reason why I always take care to never treat "voice" and "telephony" synonymously).

Hybrid, competitive markets are optimal

So there is value in interoperable systems, and also in proprietary alternatives and niches. Some sectors gravitate towards openness, such as federation between different email systems. Others may create de-facto proprietary appoaches - which might risk harmful monopolies, or which may be transferred to become open standards (for instance, Adobe's PDF document format).

And even if something is based on theoretically interoperable underpinnings, it might still not interoperate in practice. Most enterprise Private 4G and 5G networks are not connected to public mobile networks, even though they use the same standards.

Interoperability can be both a positive and negative for security. Open and published interfaces can be scrutinised for vulnerabilities, and third-parties can test anything that can be attached to something else. Yet closed systems have fewer entry points – the “attack surface” may be smaller. Having a private technology for a specific purpose – from a military communications infrastructure to a multiplayer gaming network – may make commercial or strategic sense.

In many all areas of technology, we see a natural pendulum swing between openness and proprietary. From open flexibility to closed-system optimisation, and back again. Often there are multiple layers of technology, where the pendulum swings with a different cadence for each. Software-isation of many hardware products means a given system might employ multiple layers at the same time.

 Consider this (incomplete and sometimes overlapping) set of scenarios for interoperability:

• Between products: A device needs to be able to connect to a network, using the right radio frequencies and protocols. Or an electrical plug needs to fit into a standardised socket.
• Within products or solutions (between components): A product or service can be considered to be just a collection of sub-systems. A computer might be able to support different suppliers’ memory chips or disks, using the same sockets. A browser could support multiple ad-blockers. A telco’s virtualised network could support different vendors for certain functions.
• Application-to-application / service-to-service: An application can link to, integrate or federate with another - for instance a reader could share this article on their Twitter feed, or mobile user can roam onto another network, or a bank can share data access with an accounting tool.
• Data portability: Data formats can be common from one system to another, so users can own and move their "state" data and history. This could range from a porting a phone number, to moving uploaded photos from one social platform to another.

There’s also a large and diverse industry dedicated to gluing together things which are not directly interoperable – and acting as important boundaries to enforce security, charging or other functions. Session Border Controllers link different voice systems, with transcoders to translate between different codecs. Gateways link Wi-Fi or Bluetooth IoT devices to fixed or wireless broadband backhaul. Connectors enable different software platforms to work together. Mapping functions will eventually allow 5G network slicing to work across core, transport and radio domains, abstracting the complexities at the boundaries.

Added to this is the entire sphere of systems integration – the practice of connecting disparate systems and components together, to create solutions. While interoperability helps SIs in some ways, it also commoditises some of their business.

Coexistence vs. interoperation

Yet another option for non-interoperable systems is rules for how they can coexist, without damaging each other’s operation. This is seen in unlicensed or shared wireless spectrum bands, to avoid “tragedies of the commons” where interference would jam all the disparate systems. Even licensed bands can be "technology neutral".

Analogous approaches enable the safe coexistence of different types of road users on the same highway - or in the voice/video arena, technologies such as WebRTC which embed "codec negotiation" procedures into the standards.

Arguably, improving software techniques, automation, containerisation and AI will make such interworking and coexistence approaches even easier in future. Such kludginess might not please engineering purists who value “elegance”, but that’s not the way the world works – and certainly shouldn’t be how it’s regulated.

In a healthy and competitive market, customers should be able to choose between open and closed options, understanding the various trade-offs involved, yet be protected from abusive anti-competitive power.

A great example of consumer gains and "generativity" in innovation is that of the Internet itself, which works alongside walled-garden, telco or private-network alternatives to access content and applications.

Customers can have the best of both worlds - accelerated, because of the competitive tensions involved. The only risk is that of monopolies or oligopolies, which requires oversight.

Where does government & regulatory policy fit in this?

This highlights an important and central point: the role of government, and its attitude to technology standards, interoperability and openness. This topic is exemplified by various recent initiatives, ranging from enthusiasm around Open RAN for 5G in the US, UK and elsewhere, to the EU’s growing attempts to force Internet platform businesses to interoperate and enable portability of data or content, as part of its Digital Services Act.

My view is that governments should, in general, let technology markets, vendors and suppliers make their own choices.

It is reasonable that governments often want to frame regulation in ways to protect citizens from monopolists, or risks of harm such as cybersecurity. In general, competition rules are developed across industries, without specific rules about products, unless there is unfair vertical integration and cross-subsidy.

Governments can certainly choose to adopt or even incentivise interoperability for various reasons – but they should not enshrine it in laws as mandatory. If you're a believer in interventionist policies, then incentivising market changes that favour national champions, foster inward investment and increase opportunities can make sense - although others will clearly differ.

(Personally, I think major tranches of intervention and state-aid should only apply to game-changers with huge investment needs - so perhaps for carbon capture technology, or hydrogen-powered aviation).

Open RAN may be incentivised, not mandated

A particular area of focus by many in telecoms is around open radio networks. The O-RAN Alliance and the TIP OpenRan project are at the forefront, with many genuinely impressive innovations and evolutions occurring. Rakuten's deployment is proving to be a beacon - at least for greenfield networks - while others such as Vodafone are using this architectural philosophy for rural coverage improvements.

Governments are increasingly involved as well - seeing a possible way to meet voters' desires for better/cheaper coverage, while also offsetting perceived risks from concentrations of power in a few large integrated vendors. This latter issue has been pushed further into the limelight by Huawei's fall from favour in a number of countries, which then see a challenge from a smaller number of alternative providers - Nokia, Ericsson and in some cases Samsung and NEC or niche providers.

This combination of factors then gets further conflated with industrial policy goals. For instance, if a country is good at creating software but not manufacturing radios, then Open RAN is an opportunity, that might merit some form of R&D stimulus, government-funded testbeds and so on.

So I can see some arguments for incentives - but I would be very wary of a step to enshrine any specific interop requirements into law (or rules for licenses), or for large-scale subsidies or plans for government-run national infrastructure. The world has largely moved to "tech neutral" approaches in areas such as spectrum awards. In the past, governments would mandate certain technologies for certain bands - but that is now generally frowned upon.

No, message apps should not interoperate

Another classic example of undesirable "forced interoperability" is in messaging applications. I've often heard many in the telecoms industry assert that it would be much better if WhatsApp, iMessage, Telegram, Snap - and of course the mobile industry's own useless RCS standard - could interconnect. Recently, some government and lobbying groups have suggested much the same, especially in Brussels.

Yet this would instantly hobble the best and most unique features of each - how would ephemeral (disappearing) messages work on systems that keep them stored perpetually? How would an encrypted platform interoperate with a non-encrypted platform? How could an invite/accept contact system interwork with a permissive any-to-any platform? How would a phone-number identity system work with a screen-name one?

... and that's before the real unintended consequences kick in, when people realise that their LinkedIn messages now interoperate with Tinder, corporate Slack and telemedicine messaging functions.

That doesn't mean there's never a reason to interoperate between message systems. In particular, if there's an acquisition it can be useful and imporant - imagine if Zoom and Slack merged, for instance. Or a gaming platform's messaging might want users to send invitations on social media. I could see some circumstances (for business) where it might be helpful linking Twitter and LinkedIn - but also others where it would be a disaster (I'm looking at you, Sales Navigator spamming tools).

So again - interoperability should be an option. Not a default. And in this case, I see zero reasons for governments to incentivise.

Conclusion

Interoperability between technology solutions or sub-systems should be possible - but it should not be assumed as a default, nor legislated in areas with high levels of innovation. It risks creating lowest-common denominators which do not align with users' needs or behaviours. Vertical integration often brings benefits, and as long as the upsides and downsides are transparent, users can make informed trade-offs and choices.

Lock-in effects can occur in both interoperable and proprietary systems. I'll be writing more about the concept of path dependence in future.

Regulating or mandating interoperability risks various harms - not just a reduction in innovation and differentiation, but also unexpected and unintended consequences. Many cite the European standardisation of GSM 2G/3G mobile networks as a triumph - yet the US, Korea, Japan, China and others allowed a mix of GSM, CDMA and local oddities such as iDen, WiBro and PHS. No prizes for guessing which parts of the world now lead in 5G, although correlation doesn't necessarily imply causation here.

There's also a big risk from setting precedents that could lead to unintended consequences. Perhaps car manufacturers would be next in line to be forced to have open interfaces for all the electronic systems, impacting many automakers' potential revenues. Politicians need to think more broadly. As a general rule, if someone uses the obsolete term "digital" in the context of interop, they're not thinking much at all.

I've written before about the possible risks to telcos from the very "platform neutrality" concept that many have campaigned for. Do they imagine regulators wouldn't notice that many have their own ambitions to be platform providers too?

In my view, an ideal market is made up of a competitive mix of interoperable and proprietary options. As long as abuses are policed effectively, customers should be able to make their own trade-offs - and their own mistakes.

As always - please comment and discuss this. I'll participate in the discussions as far as possible. If you've found this thought-provoking, please like and share on LinkedIn, Twitter and beyond. And get in touch if I can help you with internal advisory work, or external communications or speaking / keynote needs.

Note: this post was first published via my LinkedIn Newsletter. Please subscribe (here) & also join the comment & discussion thread on LI

#5G #openran #regulation #telecom #mobile #interoperability #competition #messaging #voice #innovation

Cisco and Ericsson: Will the Enterprise move to Private IMS & Cellular?

A lot has been written already about the ramifications of the wide-ranging Cisco / Ericsson deal. Most industry analysts and other observers have already come up with assessments of areas of impact, effects on other vendors (eg Juniper), and the implications for various telco-network technologies such as SDN / NFV.

A fair amount of output has been interpreting the “official line” from the two vendors’ press releases and briefings, which have been a little thin on exact details of how the collaboration will evolve. Light Reading has collated a good set of opinions here, for example.

So I'm going to speculate a little - and consider what is not being mentioned so far. This is a blog post about "what might happen" - there's a lot of variables, complexity and execution risk. Caveat lector.


The story so far: Selling & integrating IP gear & cloud platforms for telcos

Looking around the web, it seems that there’s a roughly 80/20 split between analysis of telco-area implications vs. enterprise. This is unsurprising, given the early focus areas announced - the Ericsson CEO says “Initially the partnership will focus on SPs” in the release. Also, the bulk of observers who cover both companies are strongly focused on SP networks.

But my sense is that a few angles have been overlooked, especially about enterprise. I'll highlight a line in the slide-deck the companies used: "Creating leadership to address converging telco and enterprise domains".

The assumption among most people seems to be that "convergence" here is viewed only in one direction. It's assumed to mean an increasing role for telcos in managing enterprise networks and communications functions. And yes, a lot is about combined sales to/through telcos. Cisco gets to sell IP gear via Ericsson's huge SP-focused services and integration teams, and better integrate its products with the OSS/BSS domain. Going forward, the partnership can allow better network/service coverage in corporate offices, or enable assorted business cloud and IoT offers to be provided by telecom operators.

Yet "convergence" occurs when two trends meet in the middle. There's another side here: enterprises starting to adopt or manage telco-type networks and capabilities. 

But what's in it for the enterprise?

So what does Ericsson have, that Cisco can sell / add value to via its enterprise channels? And what new combined products might come from both firms' R&D labs that could be of interest beyond the reach of telcos, sold directly into the corporate domain?

I have sensed for a while that Ericsson wanted more direct business with enterprises and governments - it recognises that its addressable market for telco capex/opex (whether hardware or managed services) is limited by telcos' own growth difficulties, as well as competition from Huawei, wariness of IT players like Oracle, and the move to software-based (and sometimes open-source) infrastructure. 

It was no coincidence that last year's analyst conference in Stockholm was held partly in Volvo's premises. Or in another area I watch closely, that its WebRTC activities have involved things like online banking (see here) without a mention of telcos at all.

It's not just Ericsson. We've also seen other telecom vendors pitch to goverments, city authorities, utilities, transportation companies and so forth. There are private cellular networks intended for railways and mining operations, to e-commerce and cloud propositions, or re-use of billing/charging for utilities and smart city initiatives. Quite a few vendors also sell to "non-telco SPs", ranging from call-centre providers to (ssshhhhh!!!) big Internet firms, as well as amenity-type public WiFi implementors.

So - the question is what the joint Cisco/Ericsson initiatives might be for enterprise. The briefing deck gives some rather vague lines like "comprehensive systems integration, managed services and technical support for enterprises" as well as "cloud and data-centres" which potentially cover a multitude of sins.

Another interesting line is "Networks of the future require new design principles to ensure agility, autonomy, and security". The interesting word there is "autonomy" which means "the right or condition of self-government." For whom, exactly? For telcos, it could mean the freedom to choose between multiple vendors' platform ad 3rd-party VNFs - but I'm not convinced that's a story that Cisco and Ericsson really buy into.

My sense is that actually - and this is probably a medium-term thing rather than immediate - there are three aspects:

• Distributed enterprise cloud platforms. This should be unsurprising given both references in the announcement, and Cisco's data-centre expertise. Ericsson SDN/NFV work could fit in here, although it's not the main focus of this post.
• Private wireless. This includes both WiFi and potentially private cellular networks, indoor, on campuses, and perhaps for large areas or governmental applications.
• Comms, Collaboration & Private IMS. Both partners have a lot of history in voice, messaging and video communications, not just in telcos but also deployed by businesses. Ericsson used to make PBXs but sold to Aastra in 2008. While UC, cloud and collaboration is impacting the traditional PBX/IP-PBX market, that doesn't mean that enterprises want everything delivered "as a service". Cisco & Ericsson can help both telcos' UCaaS propositions - but also help corporations take back control in-house.

It should be noted that the last two points are unlikely to be especially popular with the telecom service provider community, and would thus not be the focus of the initial SP-friendly announcement.


Private Wireless

Together, Cisco and Ericsson have a decent chance of “fixing” indoor mobile coverage, capacity and control for large enterprises. Both have WiFi assets and also small-cell exposure (Cisco especially via its SpiderCloud partnership), but the kicker here is Cisco’s footprint and understanding of the enterprise fixed LAN and security domain. 

There are two angles here:

• Helping mobile operators "reach" deeper into enterprises to allow better in-building cellular coverage, WiFi offload/voice and (in the GSMA's dreams) run corporate wireless data connectivity as a fully-managed service. Print-over-4G....
• Allow enterprises to better manage and run their own mobile infrastructure, most obviously in unlicenced spectrum. This could extend beyond traditional WiFi towards allowing private management of LPWAN (low power networks) for IoT, rather than using Opex-centric services like SigFox's.

Historically, one of the main problems for enterprise pico/femtocells, or use of corporate WiFi for offload and carrier VoIP, has been how these coexist with the corporate-run firewalls and in-house network management and prioritisation. Normally, telco visibility/control ends “outside” a demarcation point. Most enterprises will view outbound VPN tunnels from small cells, or external control of devices on the LAN, as a security risk. Telcos, in turn, are hesitant to offer service guarantees where they have limited ability to measure or manage performance – and will also see security issues. 

There are also various issues with security, privacy and legal liability when using a 3rd-party cloud platform for identity, data processing or storage.

There is a chance here for Cisco and Ericsson to create solutions to all these areas. The short-term headlines will probably be around better in-building cellular (competing with DAS and, implicitly, SpiderCloud) and IMS WiFi-voice support, but the longer-term vision will perhaps include:

• Carrier-managed enterprise WiFi, perhaps in neutral-host mode to support multiple cellular operators' subscribers on the same network
• Private corporate-run LTE-U networks, maybe using Qualcomm's MuLTEfire or something similar, for indoor or campus usage
• Private IoT networks using both unlicenced and licenced spectrum, linked into corporate IT and communications systems directly, rather than via a service provider
• Licenced-band cellular for non-telco organisations with access to cellular spectrum (eg public safety networks, rail/transport systems, maybe smart cities or big oil/mining companies in remote areas)
• (Perhaps, depending on regulation) ways to enable "corporate MVNOs" 

This is all pretty speculative - and it may be that some of these concepts are a long way off, and perhaps not even fully-considered by Ericsson and Cisco themselves. (Get in touch if you'd like me to run a brainstorm workshop, guys!)
 
 
Comms, Collaboration & Private IMS

Absent from the announcement was any clear reference to communications: UC/UCaaS, IMS, VoLTE, WebEx, Spark, WebRTC and so forth are, to me, elephants in the room.
 

Predictable things we'll likely see include various Cisco-to-Ericsson moves, around UCaaS and WebEX linked to Ericsson's IMS. But I think that's only part of the story that will emerge.

 

Let's go back to that term "autonomy" from above. 

 

It's easier to get seduced by the idea that enterprises (and small businesses) want to get rid of their old on-premise phone systems, recognise their employees are mobile-first and BYOD-minded, and shift to some form of UCaaS platform linked to a telco network and number. Yet on the ground, plenty of enterprises either want to keep control of their own communications system, or are using 3rd-party Internet-based tools like Slack, rather than an SP's integrated proposition. 

 

I don't think that's going to change - many businesses prefer to keep hold of their own "phone" system, especially as it becomes part of their messaging or contact-centre or contextual-comms platform. That doesn't mean it has to be a lump of tin, or a proprietary IP-PBX platform for call control - it could be in the cloud, or using standardised software elements. It just doesn't have to be a "per-seat per-month" cost model. 

 

A rather surprising term I’ve heard a few times recently – mostly from folk in the IT/cloud industry – is “enterprise IMS”. It’s not an industry-standard term, but basically, it means that some large businesses want to deploy their own internal IMS-type infrastructures as communications/service platforms. These might be owned outright, managed on-site by third parties, or delivered from multi-tenant clouds in the same fashion as UCaaS today. But I think this area is one of the likely mid-term outcomes of the Ericsson / Cisco deal, if the concept comes to fruition.

Remember - PBX stood for Private Branch Exchange. We should not be surprised if the IP and Mobile equivalent turns out to be the enterprise-owned PIMS, not a "mobile PBX" run as a service in a telco network. 

 

It’s being catalysed by a few things:

• Mobile and BYOD: many employees are using mobile devices for most of their business communications. But most UC/smartphone implementations are still a bit clunky, with varying UIs depending on device and especially iOS vs. Android. Having an enterprise-run IMS (and voice application) would potentially allow the CIO to regain control of the “native dialler” on a phone, especially when connected in-building. There are open questions about numbering, but they may be tractable.
• Cloud / Open-Source IMS: A few years ago, the idea of an enterprise owning an IMS would have been ludicrous, given the costs involved. But now, with virtualisation, cost pressures by telcos wanting cheap VoLTE, the emergence of open-source options like Metaswitch Clearwater, it is becoming much more downward-scalable. PIMS is starting to look like a cost-effective option.
• Applications: Currently pretty much the only useful IMS application is straightforward VoIP/VoLTE phone calls. That isn't enterprise-optimised - it lacks the typical PBX-type functions that are needed. There aren't really telco-IMS contact centre apps, and nonsense like RCS certainly doesn't address enterprise messaging. Having a PIMS/WebEx/Spark combination would be much more interesting. Potentially it could also be run as an operator-hosted service, but I think the real value is where it is owned outright.
• Middleware & APIs: Where this starts getting really interesting is in the creation of integrated apps blending a corporate comms platform, with corporate IT systems. Hooking into existing software platforms for sales or field automation, line of business and so forth. Potentially this is where a combination of a Cisco/Ericsson PIMS + Tropo starts looking interest. (Sidenote: unlike GenBand with Kandy, Ericsson lacks a WebRTC PaaS)

There’s a few other angles that play in here too. Most notably Cisco's earlier partnership with Apple, which I think many have underestimated. It is likely to optimise iPhones & iPads for use with Cisco's security, WiFi and collaboration tools. I can envisage a situation where companies ditch their old desk-phones for Apple i-Devices, either BYOD or company-issued, linked to Cisco communications apps running via an Ericsson PIMS, with outbound SIP/IMS trunks if needed. Potentially this could work with virtual numbers as well - not just for the US where fixed/mobile numbers are indistinguishable, but the rest of the world where mobile numbers are from separate defined ranges. 

Having a corporate-issued mobile number, anchored in a PIMS, would make a lot of difference - ability to use SMS, better fit with assorted apps that use mobile numbers for identity or authentication, porting in/out, maybe even assigning mobile numbers to IoT objects. There's a lot of variables here, and the rules will likely vary by country.

And for a long-range view, consider Apple’s work on virtual / eSIMs added in to this. Telcos might not like the idea of virtual SIMs in phones – but an enterprise, running its own IMS, its own WiFi network, and perhaps having access to LTE-U and maybe even its own mobile network code – may not be so squeamish. There are various types and styles of enterprise MNO and MVNO that can be envisaged here, depending on local regulation, willingness of local operators to wholesale or allow roaming, or even share spectrum. I can even imagine an “enterprise MNO” being run as a managed service by Ericsson.

Who would be impacted by this? Microsoft is at the top of the list, and also the traditional mobile operators’ enterprise units which still make good margins on corporate mobile subscriptions. It also sits against the emerging Google/Android/Telcos/BroadSoft/Switch enterprise ecosystem. Avaya is left looking a bit lonely here (although it also works with Google), as are the smaller UC players like Shoretel. It possibly even makes the bizarre Mitel/Mavenir acquisition look more sensible in hindsight, although that’s still pretty baffling.

The interesting question is whether Cisco and Ericsson have actually looked closely at what they might be catalysing – or whether they are themselves likely to be as surprised by the direction of travel. Obviously there are lots of questions about execution that come first, but if things go well, there could be a game-changer afoot.

(None of this is entirely new as a concept. About 10 years ago, I did consulting for a company called Zynetix (later bought by Sonus Networks) that sold enterprise-grade cellular-core MSCs that linked to PBXs. They could allow businesses to run private mobile networks, especially when linked to pico/femtocells running in “guard band” spectrum in the UK. However it was perhaps ahead of its time, hampered by some of the practicalities such as spectrum/radio limitations, needing clunky user-experience hacks like manually selecting different networks).

Conclusion

The bottom line is this: the notion that ALL enterprises will outsource the bulk of their internal networking or communications functions, especially to telecoms service providers, is a comforting myth. Yes, some will - hence the rise of UCaaS for mid-market businesses, and telco-managed WiFi in places like airports or sports stadia.

But that is only part of the story.  

Some enterprises will want to continue managing networks and communications in-house (whether on-premise or in a private cloud). This will ideally expand to include aspects of mobile networks/services where possible. Expect PIMS, better WiFi, PLWPAN and maybe PLTE and PMVNO models. Others will want to outsource these functions to IT-type service providers like IBM, rather than telcos.

Potentially, Cisco+Ericsson (with a side-order of Apple) can facilitate all these different paths to the user. This might not be popular among traditional telcos, but in my view the trend is inevitable. Enterprises will re-assert their control (and sometimes ownership) of wireless/mobile networks and communications platforms, especially as they become more-integrated with business processes and applications. 

There's a lot of reasons why this partnership might fail to bear fruit. But a lack of potential exciting and disruptive opportunities in enterprise isn't one of them.