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5G SA Core, Handset Deployments To Be Delayed, Dell’Oro Says

Analysts are predicting delays in standalone (SA) 5G core network and 5G handset deployments, which are now not expected to hit the streets until 2020. That would be a year later than earlier expected and trail current deployments focused on the non-standalone (NSA) version of the 5G New Radio (NR) standard.

Dave Bolan, the analyst at market research firm Dell’Oro Group, said the one-year delay is because those initial 5G NR network launches are using the NSA architecture that relies on already deployed 4G LTE evolved packet core (EPC) technology. “EPC will be the workhorse for the core through the (five-year) forecast period,” reaching a revenue peak in 2022, Bolan and Dell’Oro group said in a report.

Dell’Oro also predicts it will take three to five years for service providers to switch to a 5G-specific core, up from the one to three years predicted in the firm’s previous five-year forecast. Many service providers will wait until they have more geographic 5G NR coverage and a higher percentage of 5G devices before migrating to a 5G core, the firm explained.

Even with that forecast delay, Bolan said the overall global market for wireless packet core products will grow by 3 percent over the next five years. This will be driven by subscriber growth, increases in data usage per subscriber, and the migration of subscribers to VoLTE.

Other analysts, including Jack Gold of J.Gold Associates, said the 3 percent growth rate is somewhat conservative as there will be spikes in growth as 5G expands in different regions, with much of the earliest growth in Asia.

Roger Enter, an analyst at Recon Analytics, said many experts and carriers had already expected a lengthy transition from 4G EPC to the first true 5G core deployments.

Device Challenges

Entner said a much bigger concern than the evolution of network cores to 5G is how easily 5G phone makers such as Samsung can gain access to magnetic components as a trade dispute continues between the U.S. and China.

“There are not that many magnetics makers around and that’s a gating factor for how many 5G phones that Samsung or anybody could sell,” Entner said. “It’s a big concern.”

Active and passive magnetics are used in smartphones to manage the power in a phone, partly to meet changing network demands. Entner said an industry insider told him that with smartphone magnetics on a list of products subject to tariffs by the U.S., phone makers worry it will be difficult to supply the demand for new 5G phones.

Entner expects some 5G phones running in the sub-6 GHz band to hit the U.S. market late in 2019, with some others connecting to millimeter wave spectrum. The remainder of 2019 will prove to be a good year for application and device developers to build products that take advantage of the edge computing and low latency capabilities of 5G, even if networks are not widespread, he said.

Huawei Shadow

The delay in 5G SA deployments comes as many global operators continue to struggle with equipment supplier options.

The latest example was Vodafone’s move last week to suspend network equipment purchases from China-based vendor Huawei over security concerns. Vodafone CEO Nick Read said there was too much “noise” around Huawei as governments consider bans against the Chinese technology firm over worries that Huawei equipment could pose security threats. Such bans would create a “significant delay” for carriers’ 5G deployments, he told reporters.

Dell’Oro Group’s Bolan said those concerns did not impact the research firm’s change to its forecast.―SDx Central

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