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MWC 2016 Industry Trends and Takeaways February 2016

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Page 1: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

MWC2016IndustryTrendsandTakeaways

February2016

Page 2: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

PrefaceThe2016edi+onofMWChadtwokeythemes:5GandIoT.Boththemesareposi+onedaspoten+alrevenuedriversforMNOs,buttheyarediametricallyopposedproposi+ons.ThesethemesenforcethestatusoftheMNOsasconnec+vityproviders.Connec+vityisa(necessary)commodity;5GandIoTwilltake+metounfoldasboundedbytherequirementsofinvestmentsandmarketdevelopment.Butbehindthelimelight,theInternetgiantsandOTTscon+nuetoleadtheevolu+ontowardsnetworkvirtualiza+on,whileleveragingtheirinherentcloudandbigdataadvantages,andassuch,drivingtowardsmajormarketdisrup+on.NewbusinessmodelsarenowpossiblethatmayrendertheMNOstospectrumholdersasservicedeliveryisachievedthroughmul+plechannelswiththecellularnetworkbeingoneofmanysuchchannels.

TheXonaPartnersTeam

2©2016XonaPartners

Page 3: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

3©2016XonaPartners

5GdominatedMWC16.Theindustryconsiders5GasalinearevoluConwithfocusonspeedasvendorscompetedongigabitannouncements.

5Gistooearlyontheroadtodeployment–thereismuchtoagreeon,nottheleastisthephysicallayer.

Acrisisisbrewinginradioaccessasspectralefficiencywillbemarginallyimprovedover4GdrivingtheneedforaddiConalspectrumwhichwhileischeapercannotbedeployedsimilartocurrentpracCce.

SpeedisachievedleveragingeverhigherspectrumresourcesthroughcarrieraggregaConwhichisnotscalable.

5Gisanetworkofnetworksbut‘networkslicing’hasbecomeacommoncliché.

Weexpect‘true’5Gtobecommercializedpost2022.Differentserviceswillbemarketedas5GinthemeanCmeconfusingthepublicinthemeanCmelikeneverbefore.

Widelydemoedoutdoormillimeterwaveaccesswillhaveamostchallengingbusinesscase:Beware!

5G:Dominantbytooearly

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4©2016XonaPartners

Therunwayfor4Gtechnologiesislongdrivenbymarketeconomics.

Thefocuson5GhasovershadowedtheevoluConofLTEinpublicdisplaysprovidinganinaccurateprojecConofwhereoperatorswillinvest.

CarrieraggregaConwilldrivespeedonnetworkswhilevirtualizaConofcorenetworkelementswilldrivefutureupgrades.

VoLTEiswellposiConedtogetmoretracConasoperatorslookforcompeCCveadvantage.

A]enConrampinguponLTEinunlicensedspectrum:LAA,MulteFire,andLWA,butwehavereservaConsonthecommercialpotenCalastheychallengethevalueproposiConofMNOservices.

4G:LongLife

Page 5: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

5©2016XonaPartners

ThethreatofLPWAsbearingdownonMNOsfocusedacCononNB-IoT.WherearetheapplicaCons?

TheLPWANsvs.NB-IoTba]leisarepeatoftheWiMAXvs.LTErace.ForLPWANs,thediversityofapplicaConsandoperaConinunlicensedspectrumoffersamarketopportunity.

MNOshavelimitedabilitytocapitalizeonNB-IoTunlesstheyundertakeamajorshicinoperaCon.

ConnecCvityisacommodity;thevalueisintheinformaCon.MoreinformaConfrommoredataincreasesvalue.Focusingon‘smalldata’isacommercialchallengefortheMNOs.

MNOcommunityaimingtoforestallthegrowthofLPWAecosystemthroughmulCprongeda]ackthatincludesunrealisCcacceleratedCmelinesforNB-IoT.

LTECat-0isdefunct.Cat-m1whichmaybecometheworkhorseofmanyIoTapplicaConshastakenabackseattoNB-IoT.

NB-IoTisposiConedforavailabilitybyendofthisyear.Webelieveitisearly2018beforematuresystemsareavailable.

ToomanyIoTconnecCvitysoluCons.Whichwillwin?

IoTConnecEvity:déjàvu!

Page 6: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

ResurgentAIdrivenbytheInternetplayersismakinginroadsintothemobileapplicaConecosystem.SCll,whenfilteringtheannouncement,onlyfewplayerscouldshowforrealAIapplicaCons!

TelcossuchasSocbankhavebeenposiConingintelligentrobotsasapossibleevoluConoftelcoservices.WhiledrasCc,itisaninteresCngbet.ExpectalotofcompeCConahead.

AgoodproporConofnewproductsandsoluConsadverCse“predicCveanalyCcs”and“deeplearning.”Ironically,thesamevendorsareinearlystagesofpujngtogetherabigdataarchitecturewhichisaprerequisiteforintelligentdataprocessing!

TomakeAIwork,moreexperCseisrequiredwithinmanyofthecompaniesaimingatleveragingit.

IncrementalAIusecaseswillconCnuetoemergeasmoredatabecomesavailable.Butwebelievethatthe“AI+everything”storywillnotlast:onlythecompanieswithstrongAIteamswillleverageitspotenCalwhilemostotherswillhavetopartnerwithspecializedAIcompaniestoachievetheirgoals.

©2016XonaPartners 6

ArEficialIntelligenceiseverywhere

Page 7: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

VirtualizaEon:Leadingnewservicesandbusinessmodels

VirtualizaConofthemobilecorehasbeenslowwiththenotableexcepConofafewAsianandUSoperatorsacCvelypursuingcommercializaConofvirtualEPCsoluCons.

VirtualizaConoftheRANissCllinitsinfancybutmajordevelopmentsoccurredoverthepastyearbolsteredbycreaCvestartups.ExpectdrasCcchangeinthesmallcellandDASmarketswithinthenext5yearsasvirtualizedRANenablenewbusinessmodelsandservices.

Tier2vendorsandsmallinnovatorstochallengecomplacenttopTEMsincommercializingvirtualizedsoluConsinthecoreandaccessnetworks.

VirtualizaConandopencomputeplanormsarethedomainsofInternetgiantswhobuiltasubstanCalleadandareintentondefiningtelecomservicesinacommodiCzedcontexttothedisadvantageofMNOs.

Nascentcloud-basedimplementaConsofEPC,IMSandBSSemergingfromfewstartupshaveashotatbusinessmodeldisrupCon(private/corporateLTE,IoTMVNO,etc.)

©2016XonaPartners 7

Page 8: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

OpenComputePlaRorm(OCP):UnderesEmatedemergingthreat

OCPisanimportantthreattoCloudandequipmentproviders.Ithasahugeimpactonhowdatacenterswillbearchitectedinthefuture.

OpenSourcehadwideinterest–severalNEPsmessagedonOpenSourceefforts:OpenMANO,DPDKandFD.IOarethelatestbuzzwords.WhileafewreferenceimplementaConsareavailable,webelieveitwillbeanother12-18monthsbeforematurepublicdeploymentsarerealizedonDPDKandFD.IO.

ThecloudgiantshavebeendoinginternallyforyearswhatOCPdoes.However,onenoCcesstrongmomentumintakingthesedesignspublic.

OCPwillpiggybackontheOpenSourcemomentum,butitsimpactislessseriousonthesystemvendorsthanportrayed.Infact,somevendorsarelikelytoleverageit.

LaunchoftheTelecomInfrastructureProject(TIP)aspartofOCPcreatedmucha]enCondrivenbyprogressiveoperatorssuchasSKtelecom&DeutscheTelekom.HPE,Cisco,Intelandalikeshouldwatchoutforabumpyfutureahead!

©2016XonaPartners 8

Page 9: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

NetworkFuncEonVirtualizaEon(NFV)

vEPCis‘forreal’andGiLANvirtualizaConishappeningatallmobileserviceproviders.

NFVwasahottopicwithmanyNetworkEquipmentProviders(NEPs)demonstraCngfuncConalityincludingmanyvirtualEPCdemos.

MajorNEPsusingNFVasaprimevehicletodelivernetworkservicesandvirtualizedGiLANservices.OpenMANO(ManagementandOrchestraCon)wasdisplayedbyTelefonica.

OpenStackimplementaConsseemtohavematuredandmanyprovidersandNEPsdisplayedanddiscussedtheirdeployments.

©2016XonaPartners 9

AllNEPsandOpenSourceProvidershadbigmessagingonNFV.WebelieveNFVisrealandwillbedeployedatlargescaleinthenext12months.However,thesamecannotbesaidaboutSDN.

Page 10: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

NotableTopics

10©2016XonaPartners

TheGSMA-drivenRCSframeworkgotanewbreathoflifethroughtheGooglepartnership.WebelieveRCSispassé,andwon’tmakeana]empttocomeback!

ThewearablefadthattookoverMWC14haslargelyfizzled,aswepointeditwould.CapitalizingonthewealthofdatageneratedbywearablesissCllworkinprogress.

MVNO/MVNEservicesandplanormsareemergingtoaddresstheglobalIoTopportunity.eSIMtechnologiesareenablingnewbusinessmodels.TheMVNOrevivalisdrivenasmoreMNOsseektheopportunitytocapitalizeontheemergingIoTmarketforlowrevenueconnecCvitywhiletheyfocusonprovidinghigh-bandwidthbroadband.

Virtual&AugmentedRealityhadastrongshowing.Thelow-latency,high-bandwidthpromiseof5GisinlinewithVRrequirementsandwillfeatureinmanyusescases,butVRalonecannotcarry5G.

SmartCitydemostookastepbackthisyearinfavorofmorespecificapplicaCons.Thiscomesasarelieffromthevagueconceptpromotedbyindustryplayersasacatch-allphrasefordifferentapplicaCons.

VoLTEandIMSweretopicsofdiscussion.WhileGoogleannouncedIMSsupport,webelieveVoLTEwillconCnuetobedeployedandRichMediaCommunicaCons(RMC)willconCnuetobeOvertheTop.

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NotableTopics

11©2016XonaPartners

UnlikeMWC15,therewerefewermergerandacquisiConsannouncedthisyear.TheacquisiConofAlcatel-LucentbyNokiaforetellsoffurtherconsolidaConinthesupplychain.

MNOsareprojectedtoincreasecollaboraCononprocurementfurtherreducingmarginsforvendors.

AnythingasaService(XaaS)isemergingasavehicletosCmulaterevenueforequipmentvendors.ThechallengeisinestablishingacooperaCveframeworkwiththeclientsandmiCgaCngacompeCCvestance.

ThefirstPublicSafetyLTEsoluConswereondisplay.TetrawillhaveamajorchallengerinLTE.

ThereareinteresCngsimilariCesamong“countryspecific”innovaConboothsinrelaContoapplicaConsandproducts.ItleadustoconcludethatmuchoftheinnovaConinapplicaConshas‘gonelocal’.Inreality,themainchallengeistoscalewhichrequiresoneto‘beglobal’.Hence,weforeseechallengesaheadformanyofthesestartups.

WhileMWC15hashadasignificantnumberofDemandSidePlanorms(DSPs),thisnumberhasbeenreduceddrasCcally.AsignoftheonlineadverCsingbusinessconsolidaCngaroundbigplayers.BestCmesarebehindforstartupsinthissector.

Page 12: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

Highlights

12©2016XonaPartners

Virtualrealityrampant:toutedas5Gusecase,itisclosetotheulCmateinhype!

Carswereeverywhere–muchcanbeachievedthoughwithout5G!

ThepushforNB-IoTisinfullswingastheba]lewithLPWANsintensify

TD-LTEaimingtoalignwithverCcalsforetellsofMNOstrategyinsaturatedmarkets.

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Highlights

13©2016XonaPartners

Band41(2.5GHz)high-powerUErequestedbySocBankpointstofuturechallengeswithspectrum

MNOsbetonLPWANsasecosystema]empttoaccelerateNB-IoT:isthistherightplay?

Whymountsmallcellsonexpensivepoleswheretherearemanholes?

3.5GHzmarketawaitsJapan’sdeployments.USCBRStodrivevolumespost2017.

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Highlights

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Abandpassfilterlaminateby3M:ReflecCnglightwhilelejngRFpassthrough.

AssetallocaConandtrackingarekeyIoTapplicaCons.Bikesweresecondtocarsindisplay!

VirtualRANprojectedenablesneutralhostandotherbusinessservices:adisrupConinwaiCngforsmallcellsandDAS.

Page 15: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

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Page 16: MWC 2016 Industry Trends and Takeaways€¦ · Industry Trends and Takeaways February 2016 Preface The 2016 edi+on of MWC had two key themes: 5G and IoT. ... 5G dominated MWC16. The

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