Transcript
Pablo Tomasi: but Hello, everyone, and welcome back to the Telco Drift. And I'm really excited for this episode because we have the first guest joining me on the Telco Drift.
Pablo Tomasi: And it's ah it's an amazing guest. ah ah We have Roberto Kompany Principal Analyst at Omdia. So, Roberto, welcome to the Telco Drift.
Roberto Kompany: Cool. Thank you, Pablo. Yeah. So hi everyone. As Pablo mentioned, so I'm Roberto Company. I've been at Omdia for about five years. Previous to that, I was another analyst company. And previously, little bit before that, I was working in strategy and also around engineering activities. So I know the mobile infrastructure landscape quite a lot, quite well.
Roberto Kompany: And currently here at Omdia, what I do is I research mainly the 5G core or the migration to 5G core as part of what we call the mobile infrastructure service.
Pablo Tomasi: So amazing. I think you're the perfect person for for this episode. and i don't remember exactly the title that I put, but it's something about the 5G essay story. So effectively what what you know what the audience will learn from our conversation today is a little bit of what has been happening with 5G SA what have been some of the challenges, what ah what is changing over the years, you know should we start thinking about 5G Advanced but also the ever present question of monetization.
Roberto Kompany: Yeah.
Pablo Tomasi: which he is always the hardest question for anyone in the telco world. So hopefully you can share a few details in terms of ah how should people think about making money.
Pablo Tomasi: but But before starting really thinking about making money, I mean, let's less get a little bit from the basics and let let's have the audience sort of settling a little bit.
Roberto Kompany: yeah
Pablo Tomasi: Now, if I'm telling you 5GSA adoption, where are we with that?
Roberto Kompany: Okay, so since we're doing the little bit of a basic thing, let's go back a little bit and let me explain where this comes from.
Pablo Tomasi: Mm-hmm.
Roberto Kompany: So generally, when a mobile infrastructure is rolled out in the past, was you deploy the 5G or rather, let's say the previous generation radio access network.
Roberto Kompany: together with its core network. So this was the case with 3G, this was the case with 4G, but with 5G, the story was different. The 5G, the first rollouts, and this is going back to 2019 when, you know, 5G started rolling out for some of the fast moving operators.
Roberto Kompany: they rolled out the mainly the radio access network. So they rolled out higher spectrum bands, you know, typically is the 3.5 gigahertz, which gives you access to a much wider bandwidth for faster data throughput.
Roberto Kompany: And they connected this to their existing 4G core, the EPC, which is well and good. This is called the non-standalone architecture, means that the 5G is non-standalone, is working together with their 4G core.
Roberto Kompany: Now, Why this happened, there are several points to make is because the 5G core is took a bit longer to develop.
Roberto Kompany: Some of the specifications took a little bit longer, but although with release 15, it was there, a lot of it was there, but 5G core is supposed to be cloud native in terms of design principles. And this is where the story gets a bit complex.
Roberto Kompany: So what is cloud native? It's a little bit in the copying what folks have done in the IT sector, the way that the software is written to be deployed on servers in terms of containers and microservices, which makes it a lot more efficient and scalable.
Roberto Kompany: And we can go into that a little bit later.
Pablo Tomasi: Mm-hmm.
Roberto Kompany: But that's kind of been, you know, ah the journey for operators. And that's why it's been a bit complex to migrate to deploy the 5G core, because you're doing many things at the same time.
Roberto Kompany: You're upgrading your servers, your platform, you're upgrading to new tools, automation tools. So, you know, the 5G core, uh, it's a little bit more complex to deploy and more ah complex to operate on a daily basis like i mentioned it's got new tools like automation so that's why it's taken some time and to today um and at omdia we do count how many operators have deployed the 5g standalone core and i can count as of now it's
Roberto Kompany: about 70 operators around the world that have deployed the 5G standalone core.
Pablo Tomasi: Okay.
Roberto Kompany: So this is you know quite a small number. If you think about you know the journey of 5G core started late 2019, and you know there's about eight hundred ah more than 800 operators around the world. So out of all that, only 70, it's been a long journey.
Pablo Tomasi: Yeah, and let let me pick up on that because I think that there's quite a very interesting statistics. 70 in pretty much a six-year time period, it clearly shows that telcos have been hesitant.
Pablo Tomasi: ah They have decided, I imagine, most of the other telcos have gone to 5G NSA. thinking this is going to be good enough to drive the first uptake in revenues.
Pablo Tomasi: And then as those revenues are kicking in, and then I can sort of justify further investment, which which we know is sort of a thought process that didn't really work out as they wanted. um But from those 70s, and I know we sort of prepare some things, but I'm jumping up and down.
Roberto Kompany: you
Pablo Tomasi: From the 70s, ah Is anyone sort of really reaping benefits from that 5G SA?
Roberto Kompany: Yeah, I mean, that's a good question. it's been It's been a long journey and operators really only now recently or over the last 12 to 18 months are really starting to reap some of the major benefits.
Roberto Kompany: So ah you would have heard the term network slicing, that's ah being able to
Pablo Tomasi: Hmm.
Roberto Kompany: reserve a portion of the or a slice of the network to maybe more premium paying or higher paying customers to give them specific, you know, SLAs or qualities of experience.
Roberto Kompany: ah So that's one way that operators have really started to and T-Mobile in the US is one example that's been started to do this.
Pablo Tomasi: So one one question. ah So I believe it was Nokia that has been telling me that some some time ago. You can do network slicing even without 5G SA, but it's manual and is not sort of as functional or effective.
Pablo Tomasi: is is that Is that correct?
Roberto Kompany: Yeah, there there is some truth to that. So with 4G core, you can do a bit of quality of service, ah dividing the network in that, but it's not very efficient.
Pablo Tomasi: Mm-hmm.
Roberto Kompany: ah The 5G core has a much better architecture. um Like i was saying before, you know, it's based on cloud native, so it's much easier. um I wouldn't say it's easier, but it's possible to scale up and scale down resources as required.
Pablo Tomasi: Mm-hmm. Mm-hmm.
Roberto Kompany: And then um the whole microservices and containerization architecture allows the operators to say, you know, how much of the network I want or which components of the network individually I want to scale up. so you know if you If we think about use cases, for example, so until now, the general use case has been mobile broadband, faster throughput to customers. no But with 5G core, we can do low latency services.
Roberto Kompany: We can do network slicing, as we mentioned. so
Pablo Tomasi: Mm-hmm.
Roberto Kompany: And we can do more enhanced mobile broadband. So for low latency, for example, you reserve a part of the ah the network and you have some edge computing which is servers closer to the end customer to reduce the latency, to reduce the distance, hence why the latency reduces.
Roberto Kompany: So you can much easier allocate those resources to the customer. This way, you can actually give a much better response in terms of um scaling up, scaling down.
Roberto Kompany: And like you were saying before, network slice, give better network slice, which with 4G was a little bit more complex and very manual, like you were saying.
Pablo Tomasi: And and ah it seems to me that, ah you know, part part of this is effectively you have a better network utilization, right? Because you can partition it in in different ways rather than using only sort of part of the whole potential.
Pablo Tomasi: it it allows you to kind of, you know let's say before you were using 60% potential you know random numbers, and then you can go up to 80% in a more effective way, targeting different bits and pieces.
Pablo Tomasi: But if if we go back a little bit, so ah there are a lot of things. you know We say 5GSA, but as you mentioned, there are a lot of different improvements from the automation, Cloud Native, so on. ah So are these the challenges that people see? So it's like changing...
Pablo Tomasi: in, you know, the the the software, the technology to become more cloud native? Or are there other the challenges that, you know, the telcos are seeing when deploying this?
Roberto Kompany: Yeah. Yeah. So that's a good point because right now, actually, I'm working on our, what we do is ah on an annual basis, we do a survey of the operators and I'm actually working on this year's edition.
Pablo Tomasi: Mm-hmm. Mm-hmm.
Roberto Kompany: So we've just finished doing a survey of about 111 CSPs
Roberto Kompany: globally um and one of the questions is exactly that we've asked them you know what are the challenges in deploying the 5G core and the top three uh challenges are ones which constantly come up year after year so i'm telling you it's for example integration with complex multi-cloud hybrid networking environments it's a bit of a mouthful mouthful
Pablo Tomasi: A little bit.
Roberto Kompany: But it's it's one of those things which operators nowadays, they want to have multi-cloud in their network architecture. So between private and public, so that's one example.
Roberto Kompany: um The second ah challenge is managing legacy together with cloud native infrastructure. So if you think about it, operators still are operating many places around the world, the 2G network, the 3G network, and these were generally ah physical assets.
Roberto Kompany: Then when it started coming to 4G, we started having, you know, virtualized assets and then moving to containerized and cloud native for 4G and maybe even 5G. So multi-cloud, legacy versus cloud native, and these require a lot of upskilling of ah the operator staff. So they need to work with, you know, like I said, in the physical environment, in the virtualized environment, the virtual machine based and cloud native.
Roberto Kompany: So that that's just the truth. Sorry, good. yeah going to ask a question.
Pablo Tomasi: ah No, it's a bit bit of a segway but a few years back, there was like all this talk about Telcos potential moving their entirety of their core on the public cloud.
Pablo Tomasi: is Is that sort of a dead end? Is that something that
Roberto Kompany: I think ah definitely it's moving and it's interesting. It's just that maybe we need to consider what use cases those operators might enjoy the core network for the public cloud.
Roberto Kompany: So there are a number of challenges, and I've looked into this proposition ah in some detail. so Vendors are coming up with these solutions, um and operators, depending where they are in the world, they may go for it at a faster rate or a slower rate. And I explain why.
Roberto Kompany: In many places the world, Europe being one of them, um there is a lot of concern, and of course with other regions as well, there is a lot of concern around privacy. So there are in a tree regulatory um rules and issues that operators need to consider and act on.
Pablo Tomasi: yeah Okay. Mm-hmm.
Roberto Kompany: For example, making sure that the data of the customer always stays within their borders. So you know that it does not leave the border or that the person administrators who's accessing those assets are based in that country and you know they have all the security clearances and so on so those are some of the challenges but on the opportunity side yes it can happen uh operators are considering those and you know but maybe not for the consumer side, maybe for IOTs or enterprise businesses, use cases, and maybe even providing solutions to factories and smart factories. So those are some of the maybe easier to go for use cases, but there is a lot of movement in that area.
Pablo Tomasi: ah A bit speculative here, but you know just jumping on on the back of what you mentioned, you could you could potentially use it better for some enterprises. We're kind of shifting to the monetization part of the chat anyways.
Pablo Tomasi: So it's you think it's a feasible idea to have separate 5G SA cores dedicated, for instance, to to the enterprise side or dedicated to IoT and then leaving whatever you're doing with consumer. Anyways, no one makes them no one is making money out of consumer. So let's let's be clear on this.
Pablo Tomasi: Just making friends with my analysts on the consumer side. ah So does it make sense to have a 5G SA that is only for selected enterprises or regions?
Pablo Tomasi: is Do you think it's is is that a possible way forward?
Roberto Kompany: Yeah, I mean, operators have done have had separate cores for the enterprise or IoT use cases. ah you know They could be on separate platforms. um
Pablo Tomasi: Mm-hmm.
Roberto Kompany: They could be now with cloud native, they could be multi-tenanted on the same server to have their consumer core and then next to it, the enterprise core on the same number of servers.
Roberto Kompany: um maybe Maybe they do that a bit less because one of the things that operators are very always very conscious and concerned about is how many times they change configuration on the consumer side. So they don't really like to do that and they want to risk keep the risks as low as possible, which is understandable.
Roberto Kompany: um So you can deploy it as a separate platform, or you can say, like you said before, on public cloud infrastructure and deploy it. And this could be in public cloud data centers, or it could be an instance within your your own premises.
Roberto Kompany: So deploy that public cloud within your premise, and but it's still it's separate from the consumer cloud.
Pablo Tomasi: and And if you're thinking about the suppliers, um I would imagine that it sort of makes sense to have the same vendor providing, let's say, the 5GSA for consumer and for enterprise.
Pablo Tomasi: or or Or at the end of the day, let's say a tech could go for one on Ericsson and one on Nokia. Or is that too much of a hassle to actually have in the type of
Roberto Kompany: Yeah. And actually, this is one of the questions that we've asked when we did the survey, how many vendors you would you would use to deploy use use your deploy your network functions.
Pablo Tomasi: Oh well.
Roberto Kompany: So um compared to the previous generations, the 5G core has many, many network functions.
Pablo Tomasi: Hmm.
Roberto Kompany: And What operators really want is to deploy with what's called multi-vendor architecture. So the network functions can be classified, categorized in different sort of categories.
Roberto Kompany: um For example, you have the packet core, which is several components, and then you have signaling, and you have, for example, roaming, you have analytics and automation. So these could be separate components. Generally, what operators do is by...
Roberto Kompany: a category of network functions from one vendor then they can buy the other category from another vendor or from the same vendor whichever strategy they wish to do but it is with 5G core it is more possible and this is something that many operators have wanted to do to have best of breed solutions and have multi-vendor architectures but there has also been challenges in deploying that i have to say
Pablo Tomasi: ah so I would imagine so the integration, it's has to be a little bit tougher. And and it it seems to me that it's mirroring the the whole ORAN conversation, right? You have sort of best of breed multi-vendor that, and that's the idea, but then there are challenges in actually sort of implementing it and making sure that it's as as good or as efficient, as cost-effective, whatever you want to say, as it a more traditional option.
Roberto Kompany: Yeah, yeah. I mean, definitely integration is one of the challenges. and In fact, that's one of our challenges from that other question. What are your challenges in deploying 5G core integrating multi vendor has its challenges because um you have to so there are several level levels of doing this activity, whether the operator does everything if they have the resources and the skill set, or they give it to a systems integrator and the systems integrator can be a third party can be one of the larger vendors that does this work.
Roberto Kompany: But then there is comes the, you know, if there is a problem, you know, if there's software bugs, how do they resolve this? And this has been one of the key issues in terms of deploying multiple network functions in a multiple vendor domain.
Pablo Tomasi: but Very interesting. and And by the way, to whoever is is listening, I don't know how to put links in the podcast. So if you're interested in anything that Robert is saying, easiest thing is just reach out to him on LinkedIn.
Pablo Tomasi: and then he can direct you to the to the relevant content. One day I will learn how to put links and stuff. But for now, let's keep things nice and simple. and and And let's move on as well. i mean So we have seen few of the challenges. Now, let's let's try to focus a little bit more on the on the monetization, right, on the on the bright side at the end of the tunnel.
Pablo Tomasi: So I'm a Telco. I've started this 5G SA process, which you know has all the challenges and problems that we have seen. um But I should then be able to better monetize the network compared to having 5G NSA.
Pablo Tomasi: and what What do you think is going to be sort of the low hanging fruits if you want? Where where should I focus first?
Roberto Kompany: yeah And let me just say before we go to there, what's really been interesting, one of the answers that we've put in our what have been your challenges in deploying the 5G core, one of the answers that consistently has come up but has been reducing over the years is operators don't see a business case for the 5G core.
Pablo Tomasi: Mm-hmm.
Pablo Tomasi: Mm-hmm. Mm-hmm.
Roberto Kompany: So that's just want to put that there. um
Pablo Tomasi: okay
Roberto Kompany: But to go to monetization, so in terms of Building it, it's the 5G core that will, as we said, enable some of these capabilities like network slicing or use cases like low latency communications and so on.
Roberto Kompany: But then there is that other next phase coming up in 5G deployments is the 5G Advanced So you know more use cases can become can become available, ah capabilities that maybe before operators didn't have.
Roberto Kompany: um For example, one example is, you know, better uplink. this is This is something that several operators are working and trying to see how best to monetize.
Roberto Kompany: That's because ah uplink has been one of those things that, you know, ah most people, what they do is download. You know, you download your Facebook, you download your videos.
Pablo Tomasi: Yeah.
Roberto Kompany: ah But ah social media, for example, influencers like yourself, you know, you want to do a video.
Pablo Tomasi: This is going to be one of the highlights, 100%.
Roberto Kompany: Yes.
Pablo Tomasi: ah hundred percent
Roberto Kompany: yeah You want to do one of these, imagine if we're outside and you're depending on a 5G network to be able to give a big, good throughput to upload this video as we're doing it in real time.
Roberto Kompany: So this is one of the use cases that operators want to leverage and monetize, so get you to pay more to get a better uplink speed compared to what was available until now.
Pablo Tomasi: and And that is something that is going to require 5G Advanced
Roberto Kompany: So with 5G Advanced, the the specifications allow better control over this to be able. So that's one of the use cases that 5G Advanced will enable.
Pablo Tomasi: And that so effectively, you're going to be able to to better kind of play around, ah yeah my my very technical jargon, play around with sort of how you are setting up downlink and uplink is is that sort of the
Roberto Kompany: Yes.
Pablo Tomasi: layman way of saying it.
Roberto Kompany: Yeah, and of course, it also depends how much radio resources you have in the field. So, you know, what spectrums you have and how much congestion there is. So obviously, you don't want to impact your existing customers.
Roberto Kompany: And you if if there is congestion, you need to add onto the radio resources and to be able to do that.
Pablo Tomasi: Mm-hmm.
Roberto Kompany: But that's part of the whole optimization of the network.
Pablo Tomasi: And it's ah i mean it's interesting, first of all, because when when someone says uplink and that there is ah an enterprise angle there, ah is and it seems sort of instinctively you say that's enterprise. Then when you start digging deeper, you're like, yes, but but not not that straightforward.
Pablo Tomasi: um but But then you you touch on the RAN side, and and I wonder how much of a of a roadblock that that is in the sense that depending where you deploy, it and then then again, depending on the spectrum that you have, you're still going to have some some constraints.
Pablo Tomasi: And I know that every telco has the best possible network ever. with the best coverage ever, but then they're always complaining anyways. So that's, you know, something as probably for ah for another podcast, but something else that I'm actually interested in ah there is a lot of talk, you know, with 5G SA and then with 5G Advanced that telcos need to change ah towards more of an experience based monetization.
Pablo Tomasi: and And while I was preparing for the podcast, i was looking at some of the stuff they're doing consumers. And you know there are some um some pricing that are based on speeds.
Roberto Kompany: Thank you.
Pablo Tomasi: And I'm wondering, like who cares about speeds? Honestly, why would I want to have speed when I never you know keep track of the speed? But anyways, so ah selling based on experience. So how how can you do that? where what What use cases are we talking about today?
Roberto Kompany: Yeah, so that's really an interesting point because until now, operators have given you better and better speeds. But that's generally been on average throughput or you know average sort of quality of experience.
Pablo Tomasi: Mm-hmm.
Roberto Kompany: So if you're in a cell, like if you're in um middle of London, for example, in the middle of the afternoon where there's rush hour, There's a lot of people that are trying to download.
Roberto Kompany: So the whole average speed goes down for every single person. So that's where this experience-based monetization can come in. So you can pay a little bit more if you if and when you need it to get better, either better download or better upload as you need. So this is where things start to become more interesting for operators to be able to monetize because, you know, they can they can get more revenue if they're selling you a better better quality of service.
Pablo Tomasi: And and i mean the the question is it kind of always at this point, are have telcos you know really looked at this in a sense?
Pablo Tomasi: have have have they ah clear Do you think they have a clear roadmap in terms of this is what our customers want and that's how we're going to respond? Or do you think that what they're doing with 5G sometimes I have the feeling that what they're doing is being highly influenced by what vendors have been telling them.
Pablo Tomasi: And the reason I'm saying this is because when I look at private networks, I know it's different market, but there has been like a an awful lot of people talking about one millisecond when no one really needed it. So I'm just curious whether you now see sort telcos become a little bit more ah the protagonist, right?
Pablo Tomasi: of the story? is is that Am I making sense?
Roberto Kompany: yes Yeah. And I think telcos generally also, they look to the analysts to see what our opinions are, of course, but they also look at other telcos around the world. And, you know, some of the telcos in the faster moving markets, like in Asia, for example, or you know, some of the ones in the US, they are doing, they're experimenting, and they're trying to see what works with their customers. So obviously, some of these um capabilities and use cases, they need to be tested before they're rolled out.
Roberto Kompany: ah But at least now we're beginning to get to that point where the technology is allowing us to do more and to be able to segment, to give you know network slice or better uplink.
Roberto Kompany: And then you know it comes the discussion comes to what we call in the 5G core jargon, the NWDAF function, which is an analytics function.
Pablo Tomasi: Yeah.
Roberto Kompany: So this is a new network function. It's capable of getting data from the customer and from the network wide and then make predictions. So automating this to a large extent, allowing the operator to understand what the customer needs are in the moment and what if the network has that resource, free available resource to be able to give that resource to the customer and charge for it.
Pablo Tomasi: Advanced nw.daf, is this 5G advance, right? It's not 5GSA.
Roberto Kompany: it's It's a 5G core network function, so not necessarily a 5G Advance
Pablo Tomasi: OK, so so you you can have it in 5GSA then.
Roberto Kompany: You can have it with 5G SA But it's again one of those, and again, this is one of those things that we've just recently, yesterday, um launched a report on.
Pablo Tomasi: OK.
Roberto Kompany: we did We did some case studies with six operators around the world, and the NWDAF function came up in at least half those times. ah It's something that operators are working on. It's still maybe not as mature as it should have been by now, but it's something that operators are working on building use cases on.
Pablo Tomasi: mean it I mean, first of all, my my first impression, need it needs a sexier name, NWDAF. That doesn't cut it for me. but But it seems like a sort of like a great function right that that drives that automation, drives that understanding of what's happening in the customer and the network.
Pablo Tomasi: So I'm surprised. of its slow adoption. So it's just like a complex function to to deploy. Is that is the sort of why people have been slower at adopting it?
Roberto Kompany: Yeah, it's a complex function to adopt and make use cases out of. And it also goes back to what I was saying initially about cloud native. You need to upskill a lot of the folks at the operators to be able to work in more software based environments and DevOps based environments.
Roberto Kompany: And this is what a lot of the operators, at least the larger and faster moving operators have been doing. The other operators obviously have to depend more on their vendors to help them out. But yes, you need to have a lot more AI, big data, you know, analytics skills to be able to make use of these things. And of course, the vendors have to have the products more ready and mature.
Pablo Tomasi: And we managed to mention AI, so that's going to be a good hashtag for us whenever we're posting this. ah But maybe as as we're trying to wrap wrap this up within a 30-minute time frame, I mean you have a couple of minutes left. Any any last thoughts, any last recommendation for for telcos you know to drive more revenues or for vendors to sell more virtual boxes?
Roberto Kompany: uh for telcos definitely to move in uh so deploy the 5G core and start experimenting and understanding what are some of those more advanced use cases are capable of and how they can be deployed how you can monetize them and then for vendors to help the operators so like i said only about 70 operators that we've counted that have launched commercially launched the 5G core so you know vendors need to help go out there and help these ah other operators, small, medium, even some large ones that are having you know ah challenges and meet those challenges to meet to get to the to that point.
Roberto Kompany: And then the operators can monitornet better monetize their network because so far, and this comes from our WCIS, we know that ARPU has been decreasing and has decreased over the last 10, 15 years.
Roberto Kompany: um So, you know, operators on one hand, they need to invest, but on the other hand, their revenues are going down from at least the consumer side. So they need to find other opportunities to to monetize.
Pablo Tomasi: ah Maybe really last question since you're like kind of pushing me in that direction. so future opportunity, consumer or enterprise. And and don' don't you know yeah you know that I'm biased, right?
Pablo Tomasi: So don't let that affect your judgment.
Roberto Kompany: Yeah, it it's a good question because obviously we've talked a lot around this new opportunities with 5G standalone core and 5G Advanced We need to get some of my ah consumer colleagues here to understand also because I'm more on the network infrastructure side.
Roberto Kompany: um But I think the enterprises have the possibility of offering more to customers, to the operators at this point. But you know the consumer side is still there. it you know Operators can monetize the consumers, offering them better uplink speeds or better network slices for gaming. Operators are doing that, trialing those out. So you know I would suggest operators to experiment and try new things and see how how how the monetization goes.
Pablo Tomasi: Okay, fantastic. ah Roberto, you know, right on time, 30 minutes on the on the dot. ah Thank you very much for your insights and your expertise. And, you know, for, you know, everyone who's listening, best way to reach out to Roberto, just ah reach out to him on LinkedIn, and then you can continue the conversation with him and he can direct you to the different piece of research that he has been working on.
Pablo Tomasi: So thanks again, Roberto, and for everyone listening, have a great day.
Roberto Kompany: Thank you. See you soon.
