2019 marks the first year of global 5G commercial adoption. On June 6, China’s Ministry of Industry and Information Technology (MIIT) officially issued 5G licenses to China Telecom, China Mobile, China Unicom, and China Broadcasting Network for commercial use, marking China’s official entry into the 5G era. On November 1, China's three mobile carriers began offering 5G mobile services to the public, accelerating the full commercial deployment of 5G.
Recently, China Mobile released the results of centralized procurement of Phase I NFV network equipment in 2019. This broad range of procurement involves 31 provincial companies in eight regions of China, which undoubtedly indicates that the full commercial deployment of 5G led by China Mobile has begun.
NFV network is the only way leading to 5G era
As we know, the 5G core network defined by 3GPP is a comprehensive cloud-based network architecture in order to meet the deployment requirements of edge diversified services in the 5G usage scenario of uRLLC (Ultra-reliable low latency communication), eMBB (enhanced mobile broadband), and network slicing. 4G will coexist with 5G in foreseeable future. The smooth evolution of 4G core network to 5G requires moving 4G EPC to the cloud, which call for a new technology: Network Function Virtualization (NFV).
NFV is an important enabling technology in 5G core network era, which can decouple the network functions of traditional vertically integrated dedicated NEs into software and deploy them on COTS servers and switching devices, so that services can be rapidly deployed and launched. Besides, with NFV, 5G networks become more flexible, so as to better support access to different vertical business and meet differentiated service quality requirements of users in different industries.
At present, SDN/NFV-based network cloudification and network reconstruction have become the common idea of the industry. With the issuance of 5G commercial licenses in various countries, NFV has indeed ushered in large-scale commercial deployment worldwide. China’s three mobile carriers have successively released their network reconstruction plans focusing on SDN/NFV, which include NovoNet 2020 in China Mobile, CTNet 2025 in China Telecom and CUBE-Net 2.0 in China Unicom. In February 2019, Smart Communications, Inc., the Philippines' leading wireless provider, officially announced the successful commercial use of the world's first NFV/SDN collaboration all-cloud core network. The US Media reported that the commercial deployment of NFV by AT&T International, Inc., an US mobile carrier, is also entering the turning point.
The arrival of 5G will undoubtedly accelerate the network virtualization process, and NFV is the only way leading to that Era.
5G brings huge market opportunities to NFV
According to the disclosed information, this procurement covers PS domain NEs (vMME, vSAE GW, vPCRF, and vDNS) and IMS domain NEs (vCSCF, vVoLTE AS, vSBC, and vENUM/DNS) from 31 provincial companies in eight regions of China, which almost involves all NEs in the core network. It not only means that China Mobile NFV network project will officially enter the stage of large-scale construction, but also be regarded as the beginning of the full deployment of China Mobile's 5GC, which will certainly further accelerate the maturity and commercialization of the domestic NFV industry chain.
At the "China SDN/NFV/AI Conference 2019," Wei Leping, Executive Deputy Director of Communication Technologies Commission of MIIT, said, "Now the industrial process of NFV in our country is relatively slow. The three mobile carriers should use NFV without hesitation, especially by taking advantage of the opportunity of 5G." According to the NFV industry report released by Global Market Insights, the NFV market will exceed $70 billion by 2024. About 79% professionals in telecom industry view NFV as a key strategic focus for the next five years’ development.
NFV becomes the “New Promising Technology”, virtualization services providers embrace bright future
As we know, all cloud-based telecom networks must be realized the decoupling of hardware and software, which poses challenges and higher requirements for traditional telecom equipment manufacturers. According to the centralized procurement results of China Mobile, traditional equipment manufacturers such as Huawei, Ericsson, and ZTE still occupy the favorable position, providing China Mobile with virtualized NEs, virtualization layers, distributed storage, MANO, and integration services. Take ZTE for example, it is reported that ZTE will construct Virtualized Network Elements (VNF) for 12 provinces, including regional control plane NEs and provincial user plane NEs (GW-U, SBC-U). The telecom cloud resource pool that bears the NFV network is built with servers provided by Inspur and ZTE. Therefore, domestic telecom equipment manufacturers already have the capability to build large-scale NFV networks, and their NFV solutions and products have also been widely used in both global operators’ and government/enterprises’ networks. In this tender, ZTE demonstrated its comprehensive strength in providing end-to-end NFV solutions and a full range of NFV products.
China is racing ahead in 5G with the largest 5G market. According to a report, total spending on 5G in China will account for about one-fourth in the world. This procurement from China Mobile alone can provide services for hundred millions of users. This not only reflects the technical and service strength of the bid-winning enterprises, but also indicates that virtualization service providers will embrace bright future in the NFV field of 5G era.
With NFV, 5G can realize low-cost, open, and flexible, and 5G commercial use promotes the maturity and development of NFV industry chain. So, the common progress of 5G and NFV provides broad space for telecom equipment manufacturers.