Calculating your path forward

The agendas of the dozen or more telecom industry events that took place during the second half of 2023 are a strong indication that the industry is already busily preparing for and deploying 5G networks. The discussion has moved on from “Why 5G?” (Answer: Because it is inevitable.) and “When 5G?” (Answer: Now) to “How?”. For carriers, as we know, the issue is complicated; full adoption of 5G, or 5G Standalone (SA), the “network that was promised” requires major investments in both the edge (radios) and in the core network. 

Some carriers have chosen to pursue a ‘partial 5G’ strategy, deploying 5G radio resources to their existing LTE sites and simply running the high 5G data throughput over their upgraded LTE core network. This approach, also known as 5G Non-Standalone, allows carriers to avoid some major investments in the short-term while making the most out of the investments they do end up making. After all, the same 5G radio and antennas that they deploy now will maintain interoperability once they convert to 5G SA in their core network.

While there are significant differences in time-to-market, technical complexity and costs (both CAPEX and OPEX) both paths can lead you to a fully-featured 5G network. 

The NSA path: Higher throughput with a smaller investment

5G NSA gives operators a quick, relatively low-cost option for introducing 5G technology to their customers, it is often considered to be the “quick & dirty” approach to 5G, because the implementation is relatively straightforward. Practically speaking, all that needs to be done is to add 5G radios (NR) to existing LTE sites. There is no need to upgrade to a 5G Core, since the 5G RAN (Radio Access Network) can run on an upgraded EPC Core. Furthermore, since the core network remains almost the same, this does not require any compatibility checks for devices that support 5G, so all existing user equipment in the market can enjoy the 5G experience.

This is a good option if all you are looking to achieve in the short term is higher throughput and to offload some data traffic from the existing LTE network. By leveraging 5G eMBB (Enhanced Mobile Broadband) operators can make the claim that they have deployed “the latest, fastest network” to provide more speed for all customers with 5G enabled phones. This perhaps gives them a competitive edge while at the same time satisfies regulatory demands.

How does it work?

In 5G NSA architecture, the 5G RAN with its New Radio (NR) interface is deployed at existing LTE site locations and connects to the existing LTE EPC Core., 5G devices will use the LTE radio access for  the signaling to establish a connection and the 5G NR to provide the actual data resources assigned to it by the LTE core. From a high data throughput perspective, the 5G NSA architecture can deliver even higher throughput since it can provide dual connectivity for supporting handsets that are able to utilize both the LTE and 5G access network.

Many of the exciting benefits of 5G rely on changes to the core architecture, so 5G NSA is really just delaying an eventual core network upgrade. It should be noted that, realistically, for carriers who choose to start “light” with the 5G NSA, the subsequent transition to an end-end 5G network will be quite slow and will require operators to simultaneously maintain their 5G and upgraded LTE core networks side by side to support the multiple use cases and customer’s needs. 

SA: The express route to full 5G functionality

Rolling out 5G SA, on the other hand, requires carriers to step away from their LTE radios and core network, and invest in a complete overhaul in order to benefit from everything that 5G allows. In 5G SA architecture, the 5G RAN and the New Radio (NR) interface, is composed of gNodeB (gNB) macro cell base stations which connect to the 5G packet core, allowing them to operate in “standalone” mode. The 5G core takes care of the control plane signaling, while the user (or data) plane that transfers data between the end device and the mobile network, runs on the 5G RAN. This is how this architecture removes any dependency on the 4G LTE core and radio network.

Notably, 5G SA architecture introduces a new 5G packet core  which completely alters the paradigm of the legacy cores to a service-based/ function-based approach. The new architecture makes use of cloud-native principles, such as virtualization, containers, container orchestration and microservices. The resulting built-in network functions deliver the capabilities that allow some of the most notable features of 5G, such as network slicing, ultra-reliable low-latency communications (URLLC) massive machine-type communication (mMTC), Voice over NR (VoNR) and multi-gigabit per second (Gbps) support. This demonstrates how the 5G core’s flexible architecture allows the quick deployment of new services and is well designed to take advantage of the additional capacity (throughput) and lower latency of the new 5G radio equipment. In addition, to enjoy the benefits of 5G SA network services, users must have 5G-compatible handsets that have been certified. In certain markets this can be a non-starter. 

While merely increasing throughput doesn’t create new revenue streams for operators, advanced 5G features definitely create new opportunities. URLLC (Ultra Reliable Low Latency Communication) offers significantly lower latency than 4G, supporting anything from autonomous vehicles to smart industry and remote medical procedures; mMTC (Massive Machine Type Communication) provides better support for IoT, enables improvements across the agricultural (e.g. smart irrigation, better crop monitoring, livestock management) and industrial (e.g. production management, quality assurance, shipping logistics) value chains. Operationally, innovative carriers who deploy 5G SA will be better positioned to benefit from the ability to optimize network resources according to the network requirements in each area and to gain enterprise market share in developed markets. 

How to identify the right path for you

So on one hand, NSA offers a quicker path to 5G with lower investment, but it also leaves a lower barrier of entry for competition. The SA path requires higher upfront investments and the availability of compatible handsets, while creating new business opportunities thanks to the advanced 5G capabilities and the marketing benefits of being positioned as an innovative operator. There is no right or wrong when it comes to choosing which path to pursue. Each carrier must weigh the pros and cons in the context of their circumstances. The decision matrix will vary between operators, so let’s review the parameters. 

Points for consideration:

• Market maturity– In mobile markets that already have high adoption, high demand and a technical-savvy customer base, there are already advanced services that are ready to be rolled out once the 5G network is in place. These market use cases are typically built around the full range of advanced 5G features, so supporting them will require more than simply adding more throughput. In mature markets you will also find a demand for potential advanced enterprise services.
• Handset penetration scale– Investing in a fully featured 5G network is not enough if there aren’t enough reliably compatible handsets in the market. Driving new handset adoption can be a challenge as well as an opportunity. To ensure smooth, efficient service, the handset models must be tested in advance to verify their compatibility with the new core. Operators who have the commercial ability to introduce and distribute new models can use this to their advantage, while others may consider waiting until the penetration of compatible handsets is sufficient. 
• Competition– Innovation is clearly impacted by the level of competition, and in the case of 5G deployment this is even more meaningful. In the race to announce and then deploy a service that will result in a 5G icon at the top of your users’ screens, NSA definitely delivers a shortcut. However, if the competitive landscape is such that the goal is to be the first to capture “true 5G” market share, the added complexity and cost of rolling out 5G SA and running it in parallel to an LTE core may be justified.
• Current data loading time and user experience– For straightforward broadband services, LTE is often sufficient for many users in many markets. However, if the LTE network is strained, with demand outpacing capacity, user experience will be affected and that it is a clear threat for an operator in a competitive market. The ‘quick fix’ for such an urgent problem to improve throughput. Even if the current situation isn’t a problem, the trend of increased demand is clear so operators may be justified when they decide to focus their investments solely on preventing issues with throughput, for which 5G NSA is sufficient, without the additional features of full 5G.
• Potential ARPU – The ROI of rolling out 5G networks is unclear, whether from residential or enterprise revenue sources. Being able to charge more for bandwidth is unlikely and the enterprise use-cases are fairly specific. Operators in low-ARPU markets must exercise caution to avoid financially overextending themselves and proceed with 5G based on the actual revenue streams they will be able to create.
• Spectrum Availability– Available spectrum- is crucial in order to be able to enjoy the real benefits of 5G and MNOs need to make sure that the spectrum that is still available can support the required use cases, whether it is data traffic offload or 5G advanced services. Since spectrum prices are one of the biggest investments for מ operator to make, the business opportunity vs. the local competition must justify such a large investment.
• Greenfield / Brownfield– Obviously, the pros and cons differ when an operator is considering rolling out a completely new network, or deploying a new “layer” of 5G on top of existing LTE and legacy technologies. The advantages of rolling out a modern, cloud-native feature-rich network in regions where there is at least a reasonable level of demand and ARPU clearly outweigh the disadvantages once there is no need to consider the sunk cost of an existing network. For an existing network where LTE technology is already in place, it makes more sense to start with the basic 5G NSA. This way the operator can benefit from the existing LTE layer so the required effort to add 5G will be far less complex that the effort required to introduce 5G SA, even if the penetration of compatible handsets is high. Adding 5G SA on top of an existing LTE deployment will create a situation in which only a portion of the users will be able to enjoy the 5G services and, more importantly, will create a technical challenge to connect the 5G SA core with the existing EPC, especially in a multi-vendor RAN environment. 
• Urgency– The timing of your 5G deployment is, in part, a derivative of many of the above points, along with budgetary and regulatory constraints. It should be noted that, insofar as your 5G deployment gets pushed to the future, the scales will likely tilt towards a 5G SA deployment, as the costs will go down, technology will become more reliable and robust and the market demand for advanced 5G services will grow stronger.

The decision you have to take

It is important to note that regardless of which path you decide to pursue, more decisions will follow in the future. As the market finds new ways to make use of them, mobile networks will continue to evolve in order to match the continued growth of data traffic consumed by the customers. Therefore, for mobile network operators, a guiding principle of any decision must be to preserve flexibility for the next evolution, once they decide to move on. That means striving for a modular architecture, with a virtualized approach to technology, decoupling components and centralizing decision making wherever possible. 5G might be the latest innovation in mobile networks, but it will not be the last and those operators who embrace that philosophy will gain a distinct advantage in the long term.