Industry Voices—Madden: CRAN emerges as unsung hero in COVID crisis

cloud
The cloud saved the economy from even deeper damage from the lockdown. (Fierce Wireless)
Joe Madden

Webex traffic is up 24X during peak hours. Fixed broadband data demand jumped 90% in some areas. American cable modem traffic bounced up 20% in the downlink and 34% in the uplink, with much higher increases in some local areas. The COVID lockdown has caused more data growth in the last month than in the previous year.

By all indications, the shift in traffic patterns has now stabilized, and we can start to make some conclusions about what really happened:

  1. Mobile networks carried a higher load overall, with tethering up 50-70% for some. At a local level, cell sites in residential areas handled a lot more daytime traffic than usual. The typical "peak hours" for mobile data during commute hours were flattened out, with smoother demand through a 24-hour period.
  2. Data speeds dropped for many users. Ookla tests reported speed losses in the range of 10%-40% for mobile and fixed networks due to higher traffic demand. 
  3. Net Neutrality was a bad idea. Europe was forced to ask Netflix and YouTube to disable high-definition video, while U.S. networks kept rolling along. I trace the difference directly to the 2018 decision by the FCC to reverse its policy on Net Neutrality... essentially opening up a two-year wave of American fiber investment.
  4. The cloud saved the economy from even deeper damage. Microsoft Azure reported 775% increase in daily cloud instances for countries that were locked down. We shut down half of the world’s economy, but the other half would have also shut down without the cloud.
  5. Voice traffic increased by 50% on mobile networks. In this way, mobile phones also saved half of our economy, as a basic enabler of working from home. Imagine a COVID shutdown in 1992, and fighting with your wife and your teenager for the landline phone.
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Now, what’s the lasting impact going to be? Will the experience of the past month change the investment plans of service providers? I think the answers are very positive for the industry.

Several operators have already announced increases in capital spending plans. Verizon, Orange and other operators quickly committed to higher spending on fiber, undersea cables and mobile network capacity.

The centralized RAN architecture is one of the unsung heroes of the COVID crisis. Capacity intended for office buildings downtown was shifted to the radios serving residential neighborhoods. Nobody has talked about this very much, but this would have been a major problem if it had happened in 2014. The crisis will elevate the flexibility of CRAN and virtualized RAN into a religious crusade for many operators. In cases where vRAN is not really much cheaper, we can expect the operators to do it anyway, in order to achieve instant scalability.

We can expect the mobile operators to invest more in high-capacity radio equipment, even in residential areas that don’t normally drive such heavy traffic. In a crisis, the extra capacity will help with the surge of residential demand. But the mobile operators will also use that capacity to compete directly with fixed broadband services. In short, 5G mmWave will migrate from the urban center to larger areas, because peak capacity planning will require more bandwidth, and to steal revenue from cable and FTTH options.

Rural areas may be the most obvious place where change is needed. Rural Americans were told to stay home, despite a lack of broadband at their homes… effectively cutting them off from the world! This failure will serve to strengthen political support for funding rural broadband initiatives, some of which are already underway. We anticipate significant new deployment of Fixed Wireless Access to rural customers coming up in the next four years.

Our shelter-in-place experience should only last for a few weeks. But its impact will drive permanent changes to the network.

Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets. The team provides detailed research on small cell, base station, carrier Wi-Fi, and IoT markets. Madden currently focuses on trends in 5G, IoT, and enterprise markets for wireless infrastructure. Over 26 years in mobile communications, he accurately predicted the rise of digital predistortion, remote radio heads, small cells, and a mobile IT market. He validates his ideas with mobile and cable operators, as well as semiconductor suppliers, to find the match between business models and technology. Madden holds a physics degree from UCLA. Despite learning about economics at Stanford, he still obeys the laws of physics.

"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.

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