The Road to 5G – CAPEX drivers and Legacy networks




Shields CTO, Gerrit van Dijken on the challenges operators will face when rolling out 5G and how Shields can help reduce the CAPEX cost while continuing to secure the investment in existing infrastructure.

One of the spear-head features of 5G is ultra-low Latency use cases. This dictates major architectural changes in 5G as compared to 3G and 4G, such as C-RAN and the Mobile-Edge Core. Putting part of the Core functionality close to the RAN sounds great when we’re talking about utilizing Virtualization and Cloud computing, but most of us are familiar with the business models in use for Software functionality, such as Software Capability and Capacity Licensing.

The licensing of the required NFV capabilities will probably be required for each Central Office in the country, with the associated costs. Despite the promise of cost reductions by white-boxing of hardware platforms, the NFV software will not be low-cost.  

Aside from the Mobile Edge Core, the Baseband functionality in the 5G RAN will still require dedicated Hardware Platforms, as off-the-shelf IT equipment cannot meet this low-latency requirement. This means that on that front, CAPEX will remain high.

Rolling out 5G will not bring reduced CAPEX spending, compared to 4G and 3G.

To minimize this CAPEX spend, Shields has developed solutions that help the Operator to utilize their equipment to the fullest extent. Our Marketplace solution gives visibility on all equipment within a group, and giving Markets access to nationally and internationally located network equipment. By having this visibility, the operator can ensure the required hardware will be available where it is needed most, without duplicated CAPEX spend, stock wasting away in project warehouses and other inefficiencies that happen in the roll-out supply chain.

To illustrate this, we’ve seen over-spend ranging from 20% all the way to 90% in some cases.

The Marketplace also provides a one-stop-shop for third-party equipment and consumables that are essential for an efficient roll-out. Having a single interface with easy ordering (think of Amazon, but without it linking to your credit card) saves time and money.

Another challenge for operators will be roll-out OPEX. 5G will require new site architecture for C-RAN. This gives rise to questions such as what new requirements do we have for the physical environment; what is the most efficient and future-proof lay out, and so on.

Shields has recently integrated the premier C-RAN install team into our North American organization. They were involved in the first C-RAN deployments on the West Coast, and have since built extensive experience on these 5G ready deployments. Their knowledge on the specific requirements related to C-RAN installs is unparalleled in the United States. With the addition of this capability to the Shields portfolio, we are now extremely well positioned to advise and support the Operators with this 5G challenge.

With all this focus on 5G, we must not forget about the current installed base.

4G will probably remain relevant until after 2025, but most OEM’s will have shifted their focus to 5G long before that. Shields can help to secure existing investment in 4G networks through Marketplace, with Repair Avoidance, Supply and Spare Part Management.

Using Shields as a Service provider brings efficiencies and costs reductions, which leverages the cash generated by the 4G network, which in turn can fund the 5G roll-out.

To summarize, the Shields portfolio can help the operator with their transition to 5G through:

–          Visibility on Roll-out and other Stock

–          One-click access to 3rd Party equipment and consumables

–          Experienced C-RAN design & installation teams

–          Spare Part Management Solutions for Legacy equipment

–          Supply of Legacy equipment

All of these solutions are based on transparency, using Revenue Share or Cost + models, ensuring the Operator gets the biggest bang for their buck.