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Intel and telcos left in virtual RAN limbo by rise of AI RAN
A multitude of general-purpose and specialist silicon options now confronts the world's 5G community, while Intel's future in telecom remains uncertain.
One of the great mysteries about the US mobile market to a casual European observer is all the new customers each quarter. Years since phones became the accessory of choice for everyone from grumpy teenagers to elderly retirees, European operators are so low on unequipped humans that they've turned to providing connectivity for farmyard animals – the equivalent of eating woodland grubs when the food runs out. Meanwhile, the big US carriers bagged an additional 2 million phone contracts in the last quarter alone.
Perhaps they're all recent returnees from alien abductions. Or maybe American toddlers are quickly joining the smartphone revolution. Whatever the explanation, operators like T-Mobile US can feel a lot happier than their transatlantic peers. Notching up another 844,000 postpaid phone adds between October and December, it reported year-on-year sales growth of more than $1.8 billion (6%) for the last nine months of 2021 (first-quarter results were flattered by its Sprint takeover). That rate would be unusually high across the pond.
But even T-Mobile may now be worried about the food running out. It has preyed for several years on AT&T and Verizon, the lumbering beasts of US mobile, and AT&T is starting to look more vigorous. It has abandoned its costly obsession with video content and outdid T-Mobile on postpaid phone growth in the fourth quarter, adding 884,000 subscribers. T-Mobile's year-on-year sales growth, moreover, was just 2.2% that quarter. Ignoring 2020, when it was buoyed by its Sprint takeover, the rate has not been that anemic since 2015.
The answer, T-Mobile hopes, lies in the 5G network it is now rolling out. But its assessment of 5G so far is not complimentary. "5G hype has been out of control and there are lots of people wondering where the breakthrough innovations are," said Neville Ray, T-Mobile's chief technology officer, in a showbiz video presentation this week. Ray's accent betrays British origins – his LinkedIn profile shows he studied engineering in London – but his slick delivery was all Hollywood movie. He was even accompanied by another executive called Rob Roy, albeit minus the Liam Neeson kilt, blood-spattered broadsword and cries of "they'll never take our freedom" (or was that Braveheart?).
"The truth is that developer innovation has been underwhelming so far," Ray continued. "It won't take off if carriers don't get out of the way." Buildings should be easily accessible to all developers, he went on. They aren't. Programs developed by carriers are for massive enterprises with resources and time, ignoring the constraints of the small developer. It's stifling innovation, said Ray. Developers should be getting a Silicon Valley model and they're running up against Kafkaesque bureaucracy.
Whoa. This all sounds like a sheepish admission of failure so far. It wasn't as if Ray singled out AT&T or Verizon for opprobrium, something T-Mobile has done with gusto in the past. Various developers were also given the opportunity to scold. "Working with telcos has not been easy," said one. "Developers need easy access and better platforms," complained another.
Full steam ahead
Ray wants to show T-Mobile is making amends. Cue a series of moves under an initiative he calls "5G Forward." They include a new platform (DevEdge), giving developers access to pre-certified modules, chipsets and devices as well as a developer kit (only the first 1,000 are "on us," notes the operator in its statement). Developers can also call on T-Mobile expertise and are promised "effortless" access to the T-Mobile network for any number of devices.
There is also the "Tech Experience 5G Hub," a new, 24,000-square-foot facility outside Seattle where partners can try out their applications. It even includes an indoor "drone zone" for test flights. Through a 5G-focused investment arm called T-Mobile Ventures, funding is on offer, too. SignalWire, a provider of application programming interfaces, and Spectro Cloud, a Kubernetes enterprise management platform, are the first lucky recipients.
Figure 1: Bright young things fiddle with 5G inside a T-Mobile facility.
(Source: T-Mobile US)
New deals were announced with high-profile partners, as well. Using 5G-powered drones and cameras, Red Bull apparently thinks it can deliver a whizzier viewing experience for live sport. Disney StudioLAB has welcomed T-Mobile as a member of its own innovation program. Mixed reality and "virtual presence" technologies are being tested.
Unfortunately, Ray's presentation ended abruptly without any nod to Q&A, and the big question for any telco investor will be about the payoff. Operators sell gigabytes, increasingly through all-you-can eat deals, as T-Mobile's results show. Nobody ever paid an operator to use Uber, and nor do operators extract money from it (even if they would like to). T-Mobile can perhaps generate some revenues from those developer kits not "on us," but there was zero explanation of how this developer outreach program will benefit it financially other than by making T-Mobile look more attractive as a connectivity provider.
Show me the money
Perhaps that is enough if AT&T, Verizon and other players cannot get their acts together. Kristin Paulin, a senior analyst at Omdia (a sister company to Light Reading), thinks a possible reason for the recent high number of postpaid adds is movement from smaller operators. A shift from prepaid to postpaid is also still happening, she says, fueled partly by a post-pandemic surge in confidence. If there are lots of people unhappy with their existing providers and plans, a T-Mobile sporting 5G "breakthroughs" could be in a good position to mop them up.
But will developers taking advantage of T-Mobile's DevEdge want to be tied to the T-Mobile network, and would legislators even allow that? While there was no suggestion this is what T-Mobile has in mind, there was not much else on commercial strategy, either. And the idea of an Internet service available only on T-Mobile's 5G network sounds like the sort of thing that upsets ardent supporters of net neutrality, a badly defined principle about not giving preferential treatment to some Internet services over others.
Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.
The US market repeatedly lurches from one position to another on net neutrality as presidents change (Democrats want rules and Republicans don't). And outside the US, Vodafone last week said UK rules on net neutrality need altering before it can offer more advanced 5G services.
A model of close collaboration between operators and developers is clearly not what mainly happened in the early days of 4G, a technology that has spawned mobile innovation. Take Uber, for instance. The ride-hailing app would not have been as successful without the widespread availability of 4G, but it works on a decent 3G connection and was not developed in partnership with a specific operator that has walled off the service to others. Ray said carriers need to get out of the way so that 5G can flourish. As accommodating as he is trying to be, T-Mobile seems to be doing the opposite.
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— Iain Morris, International Editor, Light Reading
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