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# System prepended metadata

title: 5G-era Mobile Network Cost Evolution

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# 5G-era Mobile Network Cost Evolution
**What is the 5G-ERA?**
* 5G is the fifth generation wireless technology for digital cellular networks. 
* 5G will deliver multi-Gbps peak rates, ultra-low latency, massive capacity, and more uniform user experience. 
* It brings about to elevating the mobile network to interconnect people, control machines, object and devices around the globe. 
* It will enhance and level-up performances and efficiency and lessen cost of personal, business and industry operations. 

As 5G era brings ultimate benefits to the industries, businesses and people, such implementations must be carefully planned and assessed the risk to bring lesser damage in the future. The following notes present the evaluation and assessment of implementing 5G-era Mobile Network in terms of its **TOTAL COST OF OWNERSHIP.**

**TOTAL COST OF OWNERSHIP(TCO)**
 *- Accounting concept used to subsumes both CapEx(Capital Expenditure) and OpEx (Operating Expense)*

# **FACTORS OF 5G-ERA TCO**
![](https://i.imgur.com/oRBHQZI.jpg)

# **5G COST DRIVERS**
**1) 5G Spectrum choices**

  ![](https://i.imgur.com/fq8eRao.png)
    5G networks in greater than 3Ghz require denser RAN(Radio Access Network) due to signal propagation limitations in urban and/or indoor contexts.


**2)	5G strategy choices**
    – the use of new or existing use cases with the capacity, throughput, latency, reliability. 
    
**3)	5G deployment choices**
    – fast paced and high capacity hotspots

**4)	Mobile data traffic growth**
 ![](https://i.imgur.com/Tr68RJK.png)
![](https://i.imgur.com/NhinNru.png)

 
# **5G-era Cost Accelerators** ![](https://i.imgur.com/HRNqdN1.png)
  
**1)	RAN – Densified & Massive MIMO(Multiple in,Multiple out) upgrade**
* RAN (Radio Access Network) infrastructure
    -	biggest 4G cost ticket (40-50% of network TCO)
    -	passive infrastructure 
        –	tower, cabinets 
    -	active infrastructure 
        –	radio antennas, 
        –	baseband processing, 
        –	related power and cooling equipment
    -	**RAN TCO Delta** is dependent on operator choices in 
        –	a) 5G deployment strategy
        –	b) extent of network densification with small cells
        –	c) adoption of C-RAN architecture deployment
-	From 4x4 MIMO 4G RAN to 16 times larger (64 x 64 M-MIMO)
    
**2)	Backhaul: - higher capacity upgrade** (*Backhaul – comprises intermediate links between the core network and the small subnetworks at the edge of the network)*
-    The backhaul upgrade will increase the TCO by up to 55% .
-    It will require backhaul links upgrade to 10Gbps or 25 Gbps or even 100 Gbps.
-    Fibre – best technology to deliver 5G-era backhaul but costliest.

**3)	Energy:** more power/energy required to run denser, and higher capacity RAN
-    If the 4G network requires the cost of 20-25% of its TCO, 5G requires about up to 140% or more on its network TCO. 
-	Huawei estimates that M-MIMO alone can potentially increase energy consumption from 5-7 kW per 4G site per month to over 20kW per 5G-era site.
-	Mobile data traffic growth of up to 50% adds to power consumption. 

**4) Mobile edge processing roll-out** – as possible deliver in ultra low latency.
-    Multi-Access Edge Computing (MEC) – improve 5G-era latency performance.
-	Delivers an increase of 2% in network TCO
-	Deploys servers deep at the network edge to help reduce the network latency to a low enough level acceptance for applications such as augmented reality(AR) or remote surgery. 
-	Operators face cost/latency balance choices
        -**(highest cost & lowest latency)** Deep in the network as at the cell site
        -**(lowest cost & highest latency)** central office/data center


# 5G-era Cost Optimizers  

**1)  vRAN (C-RAN/O-RAN)**
-	Centralised or cloud-RAN(C-RAN) architecture 
-	deliver TCO savings of up to 25% vs. traditional distributed D-RAN
 ![](https://i.imgur.com/14DaHep.png)
*The centrally located Base-Band Units (BBU) process the radio signals of hundreds of Remote Radio Heads (RRHs) connected via a fronthaul network*
-	C-RAN cell site infrastructure is substantially lower cost than its D-RAN equivalent
-	C-RAN vendors forecasts RAN infrastructure savings of up to 45%. However, the C-RAN architectural requirement of very high capacity, **low latency fronthaul transmission** (typically expensive high-end fibre links) offsets some of the RAN infrastructure savings when assessed on a TCO basis.

**2) Virtualised (NG) Core with SDN, NFV and CUPS** 
    – Delivers savings upto 25% of network TCO
**Impacts**
-	C-RAN virtualisation strips the cell site RAN equipment to basic radio and antenna functions (i.e. RRU) while centralizing the baseband processing function of multiple RRUs at aggregation points as BBUs.
-	**Core virtualization with NFV** (Network Function Virtualization) – is a IT virtualization trend by decoupling network functions from associated hardware into virtual network functions (VNFs) which run on virtual machines over commercial-off-the-shelf(COTS) hardware. 
-	**SDN (Software Defined Networking) and NFV** major outcome is network slicing that virtualizes the physical 5G network into multiple logical 5G network with different performance parameters that can address different service needs of B2B clients in industry verticals such as automotive or healthcare. 

**3)	Infrastructure Sharing**
-	Delivers TCO savings up to 40% in instances *where operators share spectrum, active and passive infrastructure across the site, radio, transport and core network domains.*
-	It ranges to Macro-level (i.e. Whole Market) and Micro-level(small cells in lamp posts, transport corridors,stadia) SNH(single neutral hosts)

**4)	Automation and AI**
-	Delivers TCO savings up to 25%. 
-	Automation refers to rules-based, programmable, zero-touch execution of a (network) process.
-	AI(Artificial Intelligence) includes a range of techniques, of which machine learning(ML) is vital, that use self-learning algorithms to adapt and execute in specific network operating situations dynamically. 

**5)	Cloud and Open Source**
-	Delivers TCO savings up to 5%.
-	AT&T deals with the use of Kubernetes and OpenStack as the container orchestration and clout infrastructure platform, as the foundations for its 5G rollout. 
-	Kubernetes is established as standard new infrastructure API for next-generation applications.
-	OpenStack is deployed to manage commercial VNFs as a lead for 5G equipment vendors in a cloud environment. 

**COMPARISON OF 5G COST ACCELERATORS BETWEEN 5G COST OPTIMIZERS IN TERMS OF TCO**


|                | COST ACCELERATORS                 |                                        COST OPTIMIZERS                                        |
| -------------- | --------------------------------- |:---------------------------------------------------------------------------------------------:|
| INFRASTRUCTURE | 40-50% (Radio Access Network)     |                                 -20% (Centralised/Cloud RAN)                                  |
| NETWORK LINK   | +25% (Backhaul Upgrade)           |                      -25% (Virtualised (NG) Core with SDN, NFV and CUPS)                      |
| LATENCY        | +2% (Multi-Access Edge Computing) |                                                                                               |
| ENERGY         | +140% (Energy Consumption)        | -40% (Infrastructure Sharing), -25% (Automation and Open Source), -5% (Cloud and Open Source) |

![](https://i.imgur.com/TChqGMY.png)

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# Three 5G deployment strategies lead to different 5G TCO profiles
 ![](https://i.imgur.com/fSdTc0v.png)



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# A gap analysis of operator 5G assets and capabilities
 ![](https://i.imgur.com/Y8slf41.png)



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# 5G-era cost optimization framework
 ![](https://i.imgur.com/BkNwZDN.png)

* **Group A** includes big-ticket, high 5G Delta, and small-to-medium capability gap items such as RAN, energy, backhaul, network sharing and Automation & AI. These are the areas wherein financial terms, most of the changes in 5G-era network economics will take place. 
* **Group B** items such as core infrastructure, MEC and Other/operations have critical capability enhancing aspects. However, from a financial perspective, these are both smaller in size and have low 5G Delta, as well as face more significant operator gaps in 5G assets and capabilities.


# RECOMMENDATIONS TO MOBILE OPERATORS
* Make 5G-era energy a top priority
* Start planning 5G-era network densification now
* Evaluate RAN virtualisation savings on a TCO basis
* Secure high capacity backhaul
* Position your 5G core as both cost and capability enhancer
* Reap automation savings first before reaching out for AI

# ![](https://i.imgur.com/lxrGaNy.png)5G-ERA SECURITY


-	Security has always been the top concern of technology and business and 5G is no exemption. 
-	5G-era security considers the following
    -    Massive number of connected devices and critical digital systems that results to new, much larger attack surfaces in terms of new use cases, new devices, and new network components.
    -    Security in different parts of the network (RAN, transport, core) must interoperable
    -    The services running through the network 
    -    End-to-end cross-layer approach
    -    Deployment of AI-based tools is seen as critical for 5G-era security for dynamically adapting to evolving threat landscapes.


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**Additional References:**
https://www.qualcomm.com/invention/5g/what-is-5g
https://bit.ly/2U2ZlQB
****