I’ve been covering the communication service provider’s journey to 5G for several years. I can easily say this is the most exciting time thus far on the road to 5G. The obstacles CSPs have faced along the way have gone from predictions to real challenges, and all the way through to achievable solutions. Today I’d like to talk about TCO during the migration to 5G. And more specifically, how can CSPs get the best TCO during 5G migration?
Now that 5G is well underway, I am excited to finally see 5G use cases and mainstream IoT in real life situations. But for CSPs, there’s still a lot at stake. There are important business and operational goals to meet while at the same time, migrating to a 5G Core — which up until now has been no easy feat. How is it possible to remain profitable while upgrading 4G networks to meet growing consumer demands?
A recent McKinsey report stated, “in an analysis of one European country, we predicted network-related capital expenditures would have to increase 60 percent from 2020 through 2025, roughly doubling total cost of ownership (TCO) during that period.”
60% is a huge number, which again makes me wonder…
How Can CSPs Get the Best TCO During 5G Migration?
Recently, I read a 5G migration article written from a TCO perspective by Ericsson’s Fredrik Ambjörn. He wrote, “Adding new technology needs to be balanced with finding new efficiencies in the legacy.”
That simple sentence holds the key for CSPs. Getting the best TCO will ultimately come down to optimizing the Core to achieve the best of both worlds. In other words, leveraging existing 4G Core networks for 5G.
Ericsson’s Dual-Mode 5G Cloud Core is a means to that end, and in this article, I’m going to talk about the TCO benefits of this solution.
I’d like to start by talking about what this solution is. Since many aspects of 5G technology can be built upon 4G networks, this dual-mode 5G Cloud Core solution allows CSPs to take an evolutionary approach towards investments. At the same time, they are able to progress quickly into new services while remaining flexible and agile.
Think of this as “everything old is new again.” I remember back in 2015 when the global conversation began about how CSPs could migrate to a 5G Core without throwing out decades of investments in legacy technology.
Years ago, I was in Shenzhen, China at a roundtable discussion about how to make this possible. The technical side of migrating to 5G is complicated, but adding to that the operational and financial hurdles that need to remain at the forefront of each decision can make it seem insurmountable.
Ericsson’s Dual-Mode 5G Cloud Core is a potential solution we didn’t know about back then. It is a way for CSPs to migrate to 5G while getting the best TCO by optimizing and finding new efficiencies in the legacy. 4G is going to be relevant for another decade. It only makes sense to leverage those existing 4G Core networks for 5G.
As the name suggests, in the dual-mode, you have both EPC and 5GC functionalities. In other words, you can enable both the 4G and 5G in the same Core. This solution represents a suite of microservices that represent the full mobile Core.
The system is designed to give CSPs ultimate flexibility. You’re able to use 5G or 4G technology as a standalone, or use a combination of both.
The high levels of automation (along with eliminated operational inefficiencies) work to lower your network’s TCO. The video below explains how it evolves your network to a multi-access, cloud native, programmable Core.
Every CSP wants to grow their revenue with agility and speed, but aside from that, every CSP’s strategy is unique. In order to maximize your returns on 5G, it’s important to understand how your specific network will evolve over the next several years.
By gaining a deep understanding about the network and the evolving changes (along with the costs associated with them), you’ll be well armed with the data you need to put together a sound investment strategy to meet your business and operational objectives, while at the same time, migrating to a 5G Core.
Now that we’ve covered the basics of Ericsson’s Dual-Mode 5G Cloud Core, and briefly touched on the TCO aspect, let’s get back to the original question:
How Can CSPs Get the Best TCO During 5G Migration?
If you would like to skip the rest of this article and jump right into the vortex of it all, download Ericsson’s 14 page TCO report that details these cost reduction opportunities.
According to the report:
By leveraging innovative platforms, frameworks and architecture, the Ericsson Dual-Mode 5G Cloud Core solution can significantly improve TCO in future Core networks by enabling previously unseen benefits to be realized in unique ways.
The result is the Core network capex and opex can be significantly reduced, user plane footprint can be greatly mitigated and substantial cost savings can be seen on new network integration.
What is Most Impressive About This Report (and the Solution Itself)?
I have to take a moment to talk about what’s most impressive about the TCO report and this solution. I like the brilliance in ONE platform (ONE dashboard) for all EPC and 5GC functionalities (based on a cloud native and microservices architecture).
CSPs have wanted to simply their networks for a long time, and this is a way to do it. Below is a photo I took at MWC 2019 in Barcelona. In it, you can see the suite of microservices that make up this Dual-Mode 5G Cloud Core solution. They are represented in white.
Beneath each one, you can see a green or orange (or a combination) color. Those colors indicate whether functionality is running for EPC or 5GC, or a combination of both.
With this dual-mode, you no longer need two separate NFs working separately (one for EPC and one for 5GC). This solution automatically rebalances the capacity of both, without the need for extra capacity in either.
These dual-mode cloud native operations can result in a savings of 20% in network infrastructure resources, with the additional 20% capex reduction.
Also, if you look to the last white rectangle on the second row, you’ll see the Cloud Core Exposure Server. This particular part of the solution is important as it relates to the monetization of 5G.
How do you enable the use cases we’ve all seen with AR, VR, AI, etc. so you can become part of the value chain? This Cloud Core Exposure Server is key. It allows you to use the capability of the network to expose your API to third party developers.
In other words, the Cloud Core Exposure Server is all about network exposure and API management. There are many more 5G use cases that we don’t know now, but by collaborating and allowing developers to enable those use cases, they will become a reality. By simplifying your APIs in this way, developers will be able to use it effectively.
According to Google, the world’s first publicly available LTE service was opened on December 14, 2009, and branded as 4G.
It’s magical that almost exactly ten years later, I’m writing this article asking the question — How Can CSPs Get the Best TCO During 5G Migration? That question and the timing of it all just shows how far technology has come in ten short years. I can only imagine what I’ll be writing about in ten more years!
To continue these fascinating learnings, I would suggest you download Ericsson’s TCO Report that explains all of this in more detail.
As always, thank you for reading my article! Live long and prosper.
[Disclaimer: This article was sponsored by Ericsson. I was paid to review the TCO benefits of Ericsson’s 5G Core solution.]