Fierce Network Research Bulletin, Friday, May 10, 2024 — A director at the U.S. National Science Foundation has harsh words for the country’s telco companies: We’ve lost the 5G race.
But the Next-G game is just getting started, and U.S. companies can win by playing to American strengths, said Sudharman K. Jayaweera, a program director at the National Science Foundation.
“We fell asleep at the wheel and we’re behind in 5G technology,” Jayaweera said.
Jayaweera spoke at the Linux Foundation Open Networking & Edge (ONE) Summit in San Jose, Calif., last week. (Jayaweera emphasized that he was stating his own opinion and not speaking officially for the NSF.)
In addition to telcos lagging, no U.S. vendor has significant market share in the 5G infrastructure equipment market, which is dominated by Huawei, ZTE and other companies, Jayaweera said.
How did the overseas firms lap the U.S.? With heavy investment in R&D leading to competitive products at lower cost and winning global 5G deals, Jayaweera said.
U.S. firms did a lot of good research, using funding from the NSF, Department of Defense, and other agencies, but R&D investment in the U..S did not translate from basic research to technology.
Likewise, the U.S. lags in true 5G networks. Most of the country’s deployments are non-standalone (NSA) 5G, which doesn’t support 5G’s most advanced features.
The U.S.’s 5G gap isn’t just a threat to telecom — it threatens to handicap emerging industries, which need advanced performance that can only be provided by standalone (SA) 5G networks, Jayaweera said.
These emerging verticals include connected autonomous vehicles and other intelligent transportation, smart factories, training and gaming applications using virtual-, extended- and mixed-reality, and robotic telesurgery, Jayaweera said, replying to a follow-up email query from Fierce Network.
Many of these emerging industries require low-latency performance with high reliability and low jitter, available primarily from 5G SA.
Open source RAN can help
Open source, open radio access networks (RAN) can play a role in the U.S. gaining ascendancy in Next-G networking.
“Open source can accelerate innovation and it can offer cost efficiencies,” Jayaweera said. “It can provide early competitive advantage and a chance for the U.S. to establish a skilled domestic workforce.”
He added, “That will only happen if we actually make a concerted effort to grow the skilled workforce here.”
For that, we need to get universities and research institutions more involved in open source, to build a local ecosystem that can support skilled workforce development in open source, open RAN and wireless technology.
Multivendor open RAN faces an obstacle in adoption, in that no single company takes responsibility for making sure multivendor implementations work. That’s a great opportunity for systems integrators, Jayaweera said.
But open RAN alone isn’t going to make the U.S. ascendant in 5G, or Next-G.
Samsung, Mavenir, NEC, Fujitsu, Rakuten Symphony and Parallel Wireless hold about 97% of open RAN market share, Jayaweera said.
Of these, only Mavenir and Parallel Wireless are U.S.-based. These market leaders will face competition from incumbent vendors such as Ericsson and Nokia. Already, Ericsson has inked a deal to deploy its Open RAN in AT&T networks.
By 2028, the open RAN market share of the RAN market will be about 20-30%, with at most 10% of that market share being multi-vendor, Jayaweera said.
Assuming 25% of the RAN market is open RAN by 2028, if even half is claimed by the current incumbents, that means only a single-digit percentage of the overall RAN market will actually be open. “In my view, that is not going to be a game-changer,” Jayaweera said.
A singular focus on open RAN may hinder efforts to catch up to the competition in 5G and break the incumbents’ market dominance, Jayaweera said.
What will Next-G look like?
“The most interesting and defining feature of Next-G networks may be that they are open and integrated in many ways,” Jayaweera said in email. They’ll be open and integrated across domains, connecting space-based, air, ground and undersea networks, and connecting networks of sensors, compute and communications.
These networks will operate over multiple available bands, requiring highly spectrum-agile radios. They will use open standards, not just in open RAN but also in other interface segments. Next-G will be cloud-native and AI-native.
All of this can work to the U.S.’s benefit, because it allows us to play to our strengths, Jayaweera said.
The U.S. leads in open source and cloud technology, particularly bringing the cloud to the edge — both multi-access edge computing (MEC — formerly known as the mobile edge) and space — along with artificial intelligence (AI) and machine learning. The U.S. also leads in software and IT, and in power and in spaceflight. All these domains will be integral to Next-G networking.
While the U.S. excels at skilled workforce development, the country needs to set a goal to graduate and train the workforce at numbers we need and in areas we need, Jayaweera said.
Additionally, developing extremely low-power, energy-efficient, software-defined radio to power Next-G networks will be a grand challenge for the U.S., Jayaweera said.
Dire or just early days?
Do Jayaweera’s insights of a dire U.S. present for 5G, and bright opportunities for Next-G, hold water? Mostly yes.
Industry analysts agree that non-U.S. vendors dominate the 5G equipment and software market. Analysts at Mordor Intelligence described the market as dominated by five major players, of which only one is American: ZTE, Nokia, Cisco Systems, Huawei and Samsung.
Dell’Oro Group ranks Huawei as number one for 5G RAN in market share by revenue, with more than 30%, followed by Ericsson in the number two slot, at 20-30%, followed by Nokia (less than 20%) and ZTE (more than 10%). None of these are U.S. companies, of course.
In a report, Gartner cites Mavenir and Microsoft — two U.S.-based companies — as “emerging software-based vendors” that are “gaining traction with cloud-native solutions, delivering distinctive value additions. They harness their strengths and achievements in adjacent markets and integrate open-source components to offer a more agile solution.”
Gartner’s commentary complements Jayaweera’s recommendation — that U.S. companies can succeed by leveraging U.S. strengths.
Those strengths are not guaranteed to last forever; for example, China is outspending the U.S. on AI research, according to a report from Georgetown University’s Center for Security and Emerging Technology.
Dell’Oro analyst Stefan Pongratz takes issue with Jayaweera’s gloomy assessment of the state of the U.S. in the 5G market (while he cautions that he did not watch Jayaweera’s presentation). It’s still early days of 5G deployment, he said in an email to Fierce.
“My personal opinion is that the U.S. is in solid shape in this initial 5G phase, which is really a 4G+ and FWA [fixed wireless access] phase,” he said.
“When it comes to connecting the machines and proliferating 5G into the enterprises and across industries, I am not sure there are any major winners at this point. It is just very early days in the journey, and we will have a better read in the next 5 to 15 years about the potential efficiency improvements and value creation with cellular connectivity.”
Still, the U.S. is behind in 5G SA deployments, according to Dell’Oro analyst Dave Bolan. The analyst firm tracked 50 5G SA enhanced mobile broadband (eMBB) deployments through last year, of which only two — DISH Wireless and T-Mobile — were in the U.S.
The firm tracked eMBB because those networks are available to anyone, as opposed to private networks, of which the Global mobile Suppliers Association (GSA) tracks 66, mostly still in the trial phase, Bolan said.
We’ll likely see progress in 5G SA deployments in both the U.S. and Europe next year, peaking in 2027, “just like prior mobile generations,” said David Lessin, director of ISG ProBenchmark.
While the U.S. has fallen behind in the 5G race, the emerging landscape of Next-G offers a new frontier for leadership in global telecommunications. By harnessing its core strengths in open source, cloud computing, AI, and skilled workforce development, the U.S. is well-positioned to lead the charge in the development of Next-G networks.
Here's what I'm reading this week
- T-Mobile reportedly close to deal to buy part of UScellular
- Congress tries desperate save for Affordable Connectivity Program
- Sovereign cloud on the rise in APAC amid security concerns
- Here's what Google Cloud’s asteroid hunt means for scientific AI
Stat of the week
- On average, only 48% of AI projects make it into production, and it takes eight months to go from AI prototype to production, according to Gartner.
What I'm watching for next week
- European operators BT, Deutsche Telekom and Vodafone report earnings next week. Bloomberg Intelligence's Matthew Bloxham says the operators have "optomistic" outlooks for 2024.
Meme of the week
That's it for this week, folks. Stop back on Fridays for the latest issue of our Fierce Network Research Bulletin.
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