5G Factor: Nokia’s Progress in the Fed Market, FCC Says No to Dish, Ericsson and 5G Core, and Cisco and NTT Help Orgs Advance Sustainability Goals
In this episode of The 5G Factor, our series that focuses on all things 5G, the IoT, and the ecosystem as a whole, I’m joined by my colleague and fellow analyst, Ron Westfall for a look at 5G news and what’s going on that caught our attention this week.
Our conversation touched on:
Nokia and Future Tech Partner for Private 5G. The announcement by Nokia and Future Technologies of their collaboration on private 5G in the U.S. Federal market. The companies have been awarded several multi-year, multi-million dollar contracts to provide private 5G solutions for lab, deployable, and large networks in the U.S. Federal market. Of note, Nokia was an early entrant into the private 5G space and claims to have 52% market share in the space, with over 560 customers to date. In the coming decade, Nokia has identified the potential need for 14 million industrial sites to be equipped with private 5G, so it’s a lucrative market and one with many opportunities ahead.
The FCC sides with Starlink on 12 GHz Spectrum. Siding with Starlink over Dish on what has been a long, drawn-out debate, the FCC has approved a proposal to preserve frequencies for satellite services between the 12 GHz spectrum (12.2 and 12.7 GHz), denying Dish’s request to use the spectrum for a high-power, two-way mobile network
Ericsson’s hybrid for 5G core proposition. Ericsson’s hybrid for 5G core proposition is all about accelerating hybrid cloud for 5G core, which is a collaborative undertaking involving Ericisson, the hyperscalers, and CSPs to create a telco-grade hybrid cloud that is secure, TCO optimized, and globally available.
Partnership Between NTT and Cisco targeting the manufacturing, transportation, and healthcare segments. We explored the partnership between Cisco and NTT, which is designed to serve customers by using NTT’s Edge as a Service portfolio and Cisco’s IoT capabilities, helping organizations advance their sustainability goals.
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Shelly Kramer: Hello, and welcome to the 5G Factor. I’m Shelly Kramer, the analyst here at Futurum Research, and I’m joined by my colleague Ron Westfall, fellow analyst. And we are going to dive into our show called the 5G Factor, which is all about the 5G ecosystem and the IoT and all of the things that are happening in that ecosystem that might have caught our eye in the last week or so. So Ron, good to see you as always, and we’re going to dive right into our show. We’re going to start talking today about Nokia’s progress that they’re making in the Fed market and some announcements. The thing that I think is interesting to me about Nokia is that they were really actually an early entrant into the private 5G space. And with that, I’m going to let you talk, Ron, a little bit about the recent announcement that Nokia and Future Technology, it’s Future Technologies, right?
Ron Westfall: Yeah. No direct relationship to us and I love the name Future Technologies and yeah, it really jumped out because there’s the CTIA summit that’s going on in Washington DC, and this is a great announcement about why 5G is so essential to what’s going on in the US federal market and how private 5G in particular can really enhance government applications. And one thing that I thought was important is that they’re working together to provide private 5G Core, edge compute, MEC, mobile edge computing, and indoor and outdoor radio access network capabilities to make these capabilities work across US federal governments settings on a standardized and also a predictable basis. And one reason why I think this is important is that we understand that fundamentally wifi has a role to play. However, when it comes to outdoor coverage, 5G is really the main star, and as a result we’re seeing private 5G picking up a lot of momentum.
There was some concern about its ability to grow. However, I think we’re seeing the answer right now in many different segments. And the US fellow government is no different. In fact, what they are looking to do is include a lab system for advanced use case development, deployable systems such as Cell on Wheels or COW, and also being able to fulfill those mission-critical production deployments that cover vast geographical areas. If we understand why the federal government would need this, and that includes spans that exceed over five, I mean 3000 square miles. So this is definitely bringing it together. It’s showing like Nokia definitely has the portfolio capabilities, the channel capabilities to work with somebody like Future Technologies to meet these urgent US government requirements.
Shelly Kramer: Absolutely, absolutely. One thing I’ll note here, when you hit on the opportunity here for private 5G, and when you think about it, just think about private 5G in general, and you think about all the different needs that businesses have and the ability to have your own private 5G network that is secure, that serves this one need. I mean, it makes sense that we’ve seen such an explosion of interest here and this data comes from Nokia, but they’ve identified the potential need for 14 million industrial sites to be equipped with 5G in the coming decades.
So when you think about that and you think about the market capabilities there, and I mentioned earlier that Nokia was an early entrant into the private 5G space. Today the company says that they have more than about 560 customers, although those customers might be supporting like a thousand networks, a thousand plus networks, because a lot of times customers have more than one private 5G network. So Nokia claims that they’ve got 50%, 52% market share in this space, and they also feel like they’re ahead of pretty much everybody in the market. But whether that’s the case or not, they are making really significant inroads here. And so this is just another example of a multi-year multi-million dollar collaboration that is going to serve the US Fed. So I think it’s pretty exciting.
Ron Westfall: Yeah, I agree. I mean, the addressable market speaks for itself. The old hats win all 14 million sites.
Shelly Kramer: No.
Ron Westfall: Winning a good portion of those I think will certainly keep the Nokia team happy, but also really the private network partners and also absolutely the overall 5G and mobile ecosystem happy. And I think this is something that is really becoming increasingly valid.
Shelly Kramer: I agree.
Ron Westfall: I don’t think there’s any doubts about this anymore.
Shelly Kramer: Absolutely. Well, on that, we agree, my friend, we’re going to shift now, we’re going to talk about some news that actually just came out that as these decisions go, there are the happy people and they’re the not happy people. And in this case, I’m talking about the FCC siding with Starlink over Dish as it relates to 5G network interference claims. So this has been sort of an ongoing conversation, that’s some air quotes around the word conversation, around the situation with the FCC and preserving frequencies for satellite services between the 12 gigahertz spectrum. And so Dish has been wanting to use these frequencies, Starlink has been saying, and other satellite providers have been saying, “No, no, no, this will cause interference.” And then as I said, this argument has been going on for a while and it’s been involving companies like Dish who’s a satellite TV broadcaster, telcos and satellite operators.
So the FCC engineers have decided the 5G network would actually cause too much interference if it was deployed and like Dish would like to have happen and telcos would like to have happen, and that a decision has to be made, one or the other. And so the FCC decided to go with Starlink and the satellite providers on this front. But the good news I think in this whole situation is that the FCC has proposed rules that would actually lift the 550 megahertz or the underused spectrum off the ground a little bit. It would still protect the incumbents. And then we would have the opportunity by doing this as an experiment to explore the whole sharing based concept alternatives and how that would work.
So this is a key decision for Dish because the company has had a requirement of being able to serve 70% of the US market by June of this year, which as you know, we are rapidly barreling toward. Dish claims that they’re making really good progress on that front. They have about 16,000 5G cell sites that remain that they need to have fully powered and connected by that June deadline. I’m sure they were not happy about this FCC ruling, but I feel like the ruling preserves the opportunity to continue to look at this, to continue to experiment and to maybe offer some other solutions. Ron, what do you think?
Ron Westfall: It’s a sound ruling, and I think you hit the main point, Shelly, is that this is not the final ruling. It’s something that can be revisited. As it stands today quite simply, high-powered mobile broadband interferes with satellite services, and the technology is potentially there to actually reconcile this. Again, the spectrum sharing capabilities that will make both Dish and say a fixed wireless access service compatible with using certain satellite services that are offered by Starlink. And what’s interesting is that there was actually a popular push to lobby the FCC, for example, over a hundred thousand Starlink customers actually spoke up.
Shelly Kramer: They did.
Ron Westfall: And said, “Hey, we want our Starlink service, we want the equivalent of, I want my MTV type of rally.” And so that is actually, I think, refreshing. It’s welcome. And it’s important to note that today and in the foreseeable future, Starlink is serving a very important function that is delivering broadband to hard to reach areas, particularly in the rural areas.
And it’s helping bridge the digital divide. And what’s also, I think another consideration is that the starlink service has been slowing down somewhat because more and more people are signing up for it. However, there’s good news on the horizon. SpaceX is launching second generation satellites that will address that very issue. And so this is something that I think will help that process. It just gives more spectrum clarity for Starlink to be able to improve the service. And ultimately, when the FCC revisits this, make it possible to share the spectrum without any interference concerns being a mitigating factor.
Shelly Kramer: Yeah, I agree. I’m thinking about, I’m having a little flashback too. My family and I, we don’t take road trips too often, but my 17-year-old twins Row Crew, and so occasionally a couple times during the spring and fall seasons, we go on a little bit of a road trip. I live in Kansas City, Missouri, one of the popular destinations for rowing events or regattas is in Oklahoma City. So we drive through some areas that you might call not well served, underserved rural areas on our way there. And it’s always so interesting to look up and say, “Oh my gosh, what’s going on up there?” And then you realize it’s the Starlink satellites across the sky or seeing, I’m sure you have this happen too, seeing people have conversations or whatever, “Oh my gosh, are these UFOs or whatever.” Nope. Those are the Starlink satellites that are making connectivity happen.
Ron Westfall: Yes, it’s most welcomed.
Shelly Kramer: Yeah, absolutely.
Ron Westfall: Great example.
Shelly Kramer: Absolutely. All right, so now we’re going to transition a little bit and we’re going to talk about Ericsson’s hybrid for 5G Core proposition. And this is actually all about not only collaborating, but collaborating to accelerate hybrid cloud for 5G Core, which is really pretty important. So we know that CSPs are often turning to hyperscale cloud platforms. It’s quick, it’s easy, it makes sense. But let’s talk a little bit about, if we can, Ron, about 5G Core, what 5G Core is and why it’s so important to accelerating hybrid cloud and what Ericsson’s doing in that regard.
Ron Westfall: Yeah, no, that’s a wonderful queue up. And I grief wholeheartedly that when it comes to the hyperscalers or the cloud providers, there’s definitely a coming out party that’s unequivocal. We certainly saw Mobile World Congress. So Ericsson is working with AWS, Azure, and Google Cloud to work with the operators themselves to really bring together all of their capabilities, that is enabling the CSPs to better leverage their on-premise data capabilities with being able to access the public cloud and administer it in a more efficient and flexible way. And so specific to the question, what is 5G Core bringing? It’s definitely bringing those programmability capabilities and other features that make 5G a lot more attractive in terms of being able to sell it to end customers, but also quite simply being able to run with emerging use cases and quite simply monetize them in a more effective way.
And so what we’re seeing is that automation and AI are definitely playing a more integral role in how telecom services are going to evolve. And that includes more personalized services and also 5G services that are more flexible in terms of being able to experience media, travel, transport and delivery services according to enterprise plans and policies. And another, I think, important aspect here is it’s improving the TCO proposition, that is improving total cost of ownership so the operators are not having to use so much capital expenditure to build out new 5G capabilities. And I think really a main takeaway here is the fact that it’s improving their sustainability objectives and also improving their ability to have better energy efficiency throughout their 5G networks and throughout their organizations.
And so what we’re seeing now is the ability to better manage things like power outages, being able to use the resiliency of the cloud to distribute workloads in a more optimal fashion. And finally, it’s also being able to comply more flexibly with, for example, data sovereignty requirements on a country by country basis and so forth. So this is, I think, important that Ericsson is working with these partners, and it’s another prime example of why collaboration is just going to be throughout all these implementations as 5G standalone becomes more mainstream with 5G-Advanced around the corner. And so I think this is a great example of how this is coming together is definitely the hybrid for 5G Core initiative.
Shelly Kramer: I think that I was, earlier this week, I was at SAP Sapphire event in Orlando, and I feel like this is a conversation we have as analysts over and over again, but the reality of it is collaboration, developing strategic partnerships and alliances, this is what you see from the main players in this space. This is what you see from some of the biggest companies, some of the biggest tech companies, some of the biggest telcos and all that sort of thing. And it really is, I think an important takeaway here is that this is not a time when going it alone and inventing a wheel and doing it all yourself is really the fastest pace forward. I mean, everybody’s looking for the same thing, the quickest time to value.
One of the things that you didn’t mention very much, but I think is an important, hugely important part of this undertaking with respect to 5G Core is security. And so being able to work with, collaborate with partners and to know that you have a secure and a reliable connectivity to the network, that’s what everybody wants. I want it to be reliable. I want it to be super great connectivity, but more than anything else, I want to feel secure in the process. So I think that’s an important part of this value proposition. Hi, Ron’s kid.
Ron Westfall: Right on. Yeah, I think 5G Core, it’s definitely going to be an enabler for all that.
Shelly Kramer: Absolutely.
Ron Westfall: And yeah, there’s no doubt when it comes to private public implementations, the security has to be in place.
Shelly Kramer: Absolutely.
Ron Westfall: It has to be linked in. And this is something that I think will be a main driver in terms of encouraging broader adoption of these capabilities.
Shelly Kramer: Broader adoption, quicker adoption, and quicker times of value. Again, that’s what everybody’s looking for. And I think that’s what alliances like this are trying to provide and I’m a fan. And by the way, I love the fact that your son popped in because the reality of it is for our audience, many of them, many of you are parents, many of you work from home and many of exactly what it’s like when you’re doing something like recording a video or on a client call and you get a little interruption. And I think that is a kind of nice reminder that we’re all humans, right?
Ron Westfall: Amen. Thank you Shelly.
Shelly Kramer: Amen. There we go. I can’t tell you how many times that’s happened to me and my kids have gotten the signal, but mine are a little older than yours are. So I think that’s different. And we’re getting into those super fun summer months when those of us who, I mean, I’ve worked from home and I know you have too for 20 some plus years, but the summer’s always challenging because there’s so much more activity in the house. And I know our audience is sitting there nodding along with us because you know how it is. All right, we’re going to wrap the show. We’re going to talk a little bit about NTTs Edge as a Service portfolio and Cisco’s IoT capabilities and how these companies are partnering together to help companies advance their sustainability goals. And I know that you mentioned, you gave kind of a nod to advancing sustainability goals in the conversation that we just had about Ericsson and 5G Core partnering and that sort of thing.
But I wanted to shift a little bit and just talk about the IoT, which is of course powered by 5G and this partnership between Cisco and NTT, which targets the manufacturing, transportation, and healthcare segments. And by way of this partnership, the companies are using NTTs Edge as a Service portfolio, and Cisco’s very well known and highly regarded IoT capabilities. And this offering, this joint offering combines the expertise of the two companies. So with NTT, NTT’s all about providing managed services, automation capabilities at the edge, the management of complex IT environments. And so you’ve got that expertise combined with Cisco’s IoT capabilities, including its low power wide area networking capabilities. And so then you’ve got this really attractive solution for customers. So as I mentioned, the NTT offering is a managed edge compute platform, and it is all about enabling enterprises to more quickly deploy, administer, and monitor applications to the edge.
So I thought I’d give an example of how this works. I already mentioned that the companies are working on jointly developing solutions and go to market, messaging, and they’re targeting the manufacturing, transportation, and healthcare market segments. There’s a lot of demand for edge computing and IoT solutions in these industry segments. That makes sense, right? But here’s an example of how this works. The companies are working with a public water distribution company in Belgium, and this company is responsible for critical infrastructure for 24 cities across Belgium. Their systems, of course, have to be secure, reliable, and efficient. And so with this solution that’s been jointly developed by Cisco and NTT, the organization is able to have real time insights into all of their facilities and their distribution networks. And this allows them to more quickly detect the leaks, and it actually, of course then allows for a much more rapid and in many cases an instantaneous response to problems that are detected.
And then they also have the ability to expand this network fairly easily to help address other sustainability use cases. So when I say sustainability, and we’re talking about water services, obviously preserving water services, detecting leaks, mitigating leaks, and other potential problems. I mean, this is a sustainability issue. So anyway, I think that this was a really good example of how this alliance between NTT and Cisco works. Ron, I think I remember you covering this briefly in a recap that you had done. You have some thoughts on this at all?
Ron Westfall: Definitely Shelly, and yes, I think there are a couple of important aspects here that warrant emphasis. One is that Cisco, I believe, is an IoT powerhouse.
Shelly Kramer: Absolutely.
Ron Westfall: At the end of 2022, their IoT line of business surpassed a billion dollars. So I think this is just so logical for NTT to work with Cisco in terms of enabling this project. And I think it’s an outstanding example in terms of the fact that they’re using lower WAN sensors to actually enable the capabilities. And lower WAN technology is I think something that’s going to expand significantly because IoT is now becoming embedded in more construction, both on the residential side, but certainly on the commercial side. And that includes, for example, smart city initiatives that focus on public infrastructure services such as water services.
So the Belgium example definitely shines, and as a result, I anticipate that by 2032, lower WAN could very well be a $60 billion market in itself. And this is information coming from Global Market Insights. And as a result, this is, I think, a great use case. This is tying together Cisco’s IoT capabilities, NTTs managed services capabilities, and all of it being accelerated by lower WAN sensor technology and protocols. So this is something we’ll see more of.
Shelly Kramer: Yeah, I agree. I thought it was really, really exciting news there for sure.
Ron Westfall: No doubt.
Shelly Kramer: Well, you know what, with that, that is a wrap for today’s 5G Factor show. Ron, it’s always a pleasure covering these things with you. I look forward to seeing you again next week, and to our viewing audience and our listening audience, as always, thank you for spending time with us and we look forward to seeing you again next week.