The 5G-aliser November 2020 Update: Interest in private networks and open RAN continues to rise

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As the end of the year approaches, this month’s 5G-aliser, created with STL Partners, shows that a number of trends are set to continue accelerating into 2021

The month of November was one of quiet progress for 5G, with more momentum steadily being gained for long-term trends towards private network deployments and open RAN innovation. At the same time, 5G devices are gradually becoming more affordable and widely available, though whether the long-awaited release of the iPhone 12 will drive demand for the new technology remains to be seen.

5G smartphone market shift

As the year goes on, more and more 5G-capable mobile devices are being launched, including a number of budget friendly options as well as premium products like the much-awaited iPhone 12.

The question is, how much is this driving 5G demand?

The answer is nuanced and deeply affected by the coronavirus pandemic. Stuck at home more than ever before, customers are reluctant to upgrade their devices, especially with the economic strains that come with the pandemic.

Many operators were looking at the belated launch of the iPhone 12 to be a major driver of 5G uptake, but it is still too early to tell exactly whether this launch will live up to expectations in this regard.

In fact, it may not be the premium devices like the iPhone that are most influential in driving 5G adoption, with Telstra noting earlier in the month that it is actually the arrival of cheaper 5G devices (eg, from the Motorola) that is expected to help them reach their target of 750,000 5G subscribers by the end of the year.

The device market itself is in something of a volatile state right now, with Huawei still languishing under the pressure of US sanctions. Huawei recently sold its budget smartphone brand, Honor, to a consortium explicitly set up for this purpose, including state-backed Shenzhen Zhixin New Information Technology group. This is clearly a sensible decision, since the company is unlikely to perform well given the US limitations and Huawei proper will be able to use the funds generated to further its homegrown semiconductor tech, hoping to overcome US reliance once and for all.

In fact, Qualcomm recently received a licence to supply Huawei with 4G chips, but it is not currently clear if 5G will be allowed – if not, this will be a major blow for Huawei’s device business.

Open RAN continues to pick up speed

Open RAN has been gaining momentum for some months now and November has been no exception.

This month Dish and Qualcomm announced that they are set to work together on the US’s first Open RAN-compliant 5G network. Similarly, in the UK, Vodafone’s August pilot for Open RAN, that took place in Wales, is being scaled up to 2,600 Open RAN sites in Wales and England, potentially using them to replace Huawei gear.

Meanwhile, companies like Mavenir continue to rapidly develop open RAN solutions, recently boasting of supporting 2G–5G for its open RAN packet core, thanks to a recent acquisition of ip.access.

By this point, it seems fair to say that Open RAN is here to stay and is no longer something of a novelty. While many issues remain around things like standardisation, the movemenr is beginning to see increasing interest from operators and policymakers alike.

Private networks continue to flourish

It is becoming increasingly clear that private 5G networks could be viable connectivity options for major industries like manufacturing and shipping, giving them not only access to the latest technologies to enhance efficiency, but also the flexibility to structure their network however they please.

In Europe, November has seen a Germany announced that it has awarded 88 licences for private 5G networks this year and expects more to come; for example, Nokia recently installed a private 5G network in Nuremburg for industrial IoT specialist MYNXG. In France, electronics manufacturer Lacroix is working with with Orange and Ericsson to create a 5G factory, and in the UK BT is installing a 5G network into Belfast Harbour, and Huawei is creating a private 5G testbed in Cambridge.

There has also been significant movement in the US too, with General Motor’s new Factory ZERO installing a private 5G network from Verizon to manufacture the next generation of electric vehicles.

However, it should be remembered that despite its promise, private 5G networks are also still very much in their infancy, with a survey from STL Partners showing that the majority of enterprises still rely primarily on Wi-Fi and ethernet or fixed broadband for their connectivity needs.

Climbing demand

While demand for 5G is objectively still on the low side right now, so too is supply, but a balance is beginning to emerge. Demand is rising in the latter part of this year, holding significant promise for 2021.