The latest Dell’Oro Group CBRS RAN 5-year forecast report suggests delays have not changed the underlying demand for CBRS. The overall CBRS market – LTE plus 5G NR – is expected to grow at a rapid pace between 2019 and 2024 with cumulative RAN investments projected to surpass $1.5 Billion.

Even if the regulatory process has taken significantly longer than expected (> 4 years since initial NPRM), the high level vision has not changed. We continue to believe that there is an opportunity to improve spectrum utilization while at the same time stimulating innovation for both public and private networks. The CBRS band with its unique spectrum sharing characteristics include many of the right ingredients to be a game changer over the long term, making us extremely optimistic about the opportunities within the CBRS band. At the same time, we also believe it is important to be realistic about the potential upside with new opportunities—we still envision that CBRS deployments targeting new business models and use case will need some time to cross the chasm.

Other highlights from the CBRS 5-Year Forecast Report:

• CBRS capex is not projected to have a significant impact on the WLAN capex.
• CBRS investments are projected to account for a mid-single digit share of the overall North America RAN market.
• Activity is anticipated to accelerate rapidly during the forecast period. 5G NR is expected to drive the lion share of the service provider CBRS capex in the outer part of the forecast period while LTE will likely dominate the technology mix for FWA, IoT, and Enterprise deployments through the forecast period

About the Report

Dell’Oro Group’s Advanced Research: Citizen Broadband Radio Service (CBRS) Report offers an overview of the CBRS LTE and 5G NR potential with a 5-year forecast for the CBRS RAN market by technology, location, and buyer along with an analysis about the vendor landscape. To purchase this report, please contact us by email at dgsales@delloro.com.

With the 5G mobile broadband ramp accelerating at a much faster pace than expected, and 5G NR comprising a double-digit share of the overall 1Q19 to 3Q19 RAN, the time is right to discuss some of the key 5G projections for 2020.

1) 5G RAN+Core Infrastructure Market to More than Double

5G NR continues to accelerate at an extraordinary pace, much faster than expected four or five years ago or even just six or three months ago, underpinned by large-scale deployments in China, Korea, and the US.

These trends are expected to extend into 2020. The upside in 5G NR will be more than enough to offset declining LTE investments, propelling the overall RAN (2G-5G) market for a third consecutive year of healthy growth.

2) Early Adopters to Embrace 5G SA

The path toward 5G has become more straight forward since the 2Q19 quarter with only two options now—Option 3 which is 5G NSA, utilizing the EPC, and Option 2 which is 5G SA utilizing the 5G Core.

As we move into 2020, we will see the emergence of the first 5G Standalone (5G SA) networks. We expect service providers in China, Korea, the Middle East, and the U.S. to launch 5G SA sometime in 2020.

3) More than 100 Million Transceivers

The Massive MIMO business case has changed rather significantly over the past two to three years with the technology now considered to be a foundational building block for mid-band NR deployments. We recently revised the 2020 Massive MIMO outlook upward, driven by surging year-to-date shipments and improved market sentiment for 2020. The overall 5G NR transceiver installed base – Massive MIMO plus Non-Massive MIMO for sub 6 GHz and Millimeter (mmW) macros and small cells – is projected to eclipse 0.1 B by 2020.

4) Dynamic Spectrum Sharing Takes Off

The attitude towards spectrum sharing is on the upswing, with both suppliers and operators discussing their spectrum sharing roadmaps. In addition to the spectral efficiency gains of 15% to 20%, operators are considering the benefits from a marketing perspective. Operators also see the extended 5G NR coverage with a lower band spectrum as a key enabler for 5G SA and network slicing. The technology is expected to play a pivotal role in upgrading existing low-band LTE sites to NR in the year 2020.

5) 5G NR Indoor Small Cell Market to Surpass LTE

With more data points suggesting the beamforming gains with Massive MIMO radios delivering comparable outdoor coverage in the C-band relative to 2 GHz LTE deployments, preliminary data from the field also suggests indoor performance will be a challenge and operators are already migrating the indoor capex from 4G to 5G. These trends are expected to intensify in 2020.

6) Millimeter Wave (mmW) to Approach 10% of 5G NR Small Cell Installed Base

Even though deploying 5G NR in the mid-band using the existing macro grid will deliver the best ROI for some time for operators seeking to optimize cost per GB and average speeds, 5G NR mmW shipments and revenues increased substantially in the third quarter of 2019, with the overall mmW NR market trending ahead of expectations.

We recently adjusted our near-term mmW outlook upward to take into consideration the state of the market and improved visibility about the underlying fundamentals in Japan, Korea, and the U.S.

7) 5G MBB to Account for More than 99% of the 5G NR Market

We remain optimistic about the IoT upside for Industrial IoT/Industry 4.0, reflecting a confluence of factors including 1) Suppliers are reporting healthy traction with the vertical segments; 2) More countries are exploring how to allocate spectrum for verticals; 3) Ecosystem of industrial devices is proliferating rapidly; 4) New use cases that require cellular QoS are starting to emerge.

At the same time, the LTE platform is expected to suffice for the majority of the near-term vertical requirements implying it is unlikely 5G NR IoT related capex will move above the noise in 2020.

8) Virtual RAN 5G NR Revenues to Exceed Open RAN 5G NR Revenues

There are multiple ongoing efforts driven both by operators and suppliers with the primary objective of realizing a more flexible architecture that will optimize TCO for both the known and unknown use cases while at the same time improving the ability for the service providers to differentiate their services.

Given the current state of these tracks with the incumbents investing more in virtual solutions and the readiness of Open RAN initiatives for existing 5G MBB deployments, we envision Non-Open RAN Virtual 5G NR revenues will be greater than Open RAN (virtual RAN with open interfaces) 5G NR revenues in 2020.

9) 5G NR RAN Revenue HHI to Increase > 100 Points

Total RAN HHI has been fairly stable over the past three years, reflecting a competitive dynamic that remains fierce, moderately concentrated, and relatively stable. Initial readings suggest the 5G NR HHI for the 4Q18 to 3Q19 period is trending below the 2018 overall RAN HHI; however, we expect the 5G NR HHI to increase in 2020.

10) 5G NR Subscriptions to Approach 200 Million

Preliminary estimates suggest the shift from LTE to NR is roughly two to three years faster than the 3G to 4G migration from a RAN infrastructure and subscription adoption perspective.

The end-user ecosystem is developing at a rapid pace with multiple chipsets, devices, and phones supporting both NSA and SA for the low-, mid-, and mmW- spectrum now commercially available. While TDD has dominated mid-band and mmW deployments to date, FDD-based 5G NR phones became a reality in 2H19 and will proliferate in 2020.

End-user device adoption is projected to accelerate rapidly in 2020, with 5G NR approaching 0.2 B subscriptions, bolstered by healthy NR subscriber adoption in China, Korea, and the U.S.

For more information about our 5G, Mobile RAN, and Mobile Core Network programs, please visit our website or please contact dgsales@delloro.com.

We have had a couple of interesting days both in Zurich and Los Angeles attending Huawei’s Global MBBF event and MWC19 Los Angeles. We are sharing a few quick highlights/notes below. If you have any questions or would like full access to the blog, please contact Daisy@delloro.com.

We plan to discuss some of these topics in more depth with the upcoming 3Q 2019 RAN report and the January 2020 5-year forecasts.

5G MBB is accelerating rapidly

The 5G ramp is accelerating at an extraordinary pace with large scale deployments underway in China, Korea, and the U.S. Nationwide MBB population coverage (≥70%) is expected by 2019 in the U.S (low-band), 2019 in Korea (mid-band), and 2022 in China (mid-band).

Interest in DSS is High

While there is no secret that operators with larger continuous swaths of mid-band assets will initially focus on the mid-band to optimize the cost per bit economics, the interest in dynamic spectrum sharing (DSS) is not only growing because the economics of improving the overall spectral efficiency of the LTE spectrum will eventually make sense from an efficiency perspective and/or there could be some value from a marketing point of view, operators also see the extended 5G NR coverage with lower band spectrum as a key enabler for 5G SA and network slicing.

Massive MIMO – Bandwidth, Cost, Performance, Power, Size

As we have discussed in our reports, we are confident Massive MIMO will play a pivotal role in extending the life of the macro utilizing the mid-band. Massive MIMO configured systems already comprised a double-digit share of the 1H19 RAN market. And over these past two weeks, we were particularly impressed with performance and form factor advancements.

During the MBB event, Huawei highlighted a 64T64R AAU weighing <30 kg, reflecting…for more details, please contact Daisy@delloro.com

The Value Proposition of Open and Virtual RAN is Morphing

There are multiple on-going Open RAN, O-RAN, and virtual RAN initiatives driven both by operators and suppliers with the primary objective of realizing a more flexible architecture that will optimize TCO for both the known and unknown use cases while at the same time improving the ability for the service providers to differentiate their services.

Initially, the value proposition of these next-generation architectures was heavily weighted towards the TCO benefits of using open interfaces, sharing resources, mixing and matching baseband and radio, and utilizing more general-purpose processors. What has stood out in our conversations over the past week or two is the notion that the performance per watt per dollar delta between x86 and ASICS is perhaps not converging as much as initially expected, resulting in an increased weight towards the demand side value upside as a result of easier access to the framework for 3^rd party application developers, etc.

To be clear, we are not saying there are no TCO benefits, we are just observing that there are some initial signs that the value narrative is morphing.

One of the fundamental key questions we are admittedly struggling a bit with is the fact that……for more details, please contact Daisy@delloro.com

Millimeter Wave (mmW)

Our overall position with mmW remains fairly unchanged – we believe the technology is developing at a much faster pace than initially expected and will play an extremely important role over the long-term. At the same time, mmW will face some near-term challenges but the economics will improve over time as the technology advances and inter-site distances shrink.

Over the past two weeks, we have learned more about the mmW roadmaps for some of the Korean and Japanese operators, reinforcing the thesis that deployments are spreading but the adoption will be gradual.

Nokia shared some very insightful and detailed analysis during the MWC event, suggesting that the mmW opportunity in the U.S. market will be limited, more so than initially expected, presenting some rather challenging capacity mathematics for the U.S. carriers without mid-band spectrum.

At the same time, we were encouraged by the progress of new extension technologies to address some of the mmW RAN related challenges. Pivotal Commware – a startup with the backing of Bill Gates – is working on “self-installable” extension technologies that ultimately will address some of the technical and economic outdoor and in-building coverage challenges with higher frequency technologies. During the MWC event, Pivotal Commware ran a demo utilizing Verizon’s live outdoor mmW Ericsson gNodeB outside the hotel in a non-line of sight configuration with the Pivotal extension products showcasing ~0.9 Gb/s indoors and ~0.7 Gb/s behind thick walls and doors.

5G Indoor

As we have discussed previously, the shift from 4G to 5G is accelerating rapidly indoors, more so than we initially expected.

We plan to discuss some of these topics in more depth with the upcoming 3Q 2019 RAN report and the January 2020 5-year forecasts. Get the latest in your inbox, subscribe to Dell’Oro Group’s hot topics

The combination of the faster than expected 5G ramp, positive CBRS momentum, optimism about industrial IoT and private LTE/NR, and the increased focus globally on various spectrum sharing platforms form the basis for the renewed focus on connectivity opportunities in the enterprise.