Telecom operators will see a long-term financial advantage by deploying the 5G standalone (SA) standard that uses a 5G-specific core compared with the 5G non-standalone specification that relies on an already deployed 4G LTE core, according to a new white paper from IHS Markit. However, the report, which was sourced by Chinese equipment vendor ZTE, concluded that those findings aren’t likely to change the minds of many operators.
Stephane Teral, author of the report and an independent IHS Markit researcher, warned that NSA advocates are avoiding risk in the short-term, but only delaying ultimate 5G SA adoption. “Basically, you’re not taking any risk with NSA since it’s attached to LTE, but you postpone the real migration to 5G,” Teral said via email.
Chinese service providers are already moving to SA, while much of the rest of the world, including carriers in the U.S., are largely on a path of creating an NSA architecture. “China is going straight to SA and the rest of the world led by early adopters are shooting with NSA, which basically delivers 4G-plus that they dub 5G,” Teral added.
One danger of not adopting SA is that carriers may miss out, at least for some time, on offering industrial services and applications that will help boost carrier revenues.
“SA does not need the existing 4G LTE network to function and perform and is more flexible to support a plethora of use cases that NSA won’t,” Teral added.
The 15-page report hammers on the value of these use cases – such as machine-to-machine (M2M) communication, sensor-based motion control, autonomous vehicles, and human-to-machine interactions that require low latency provided by 5G SA. Many use cases depend on an end-to-end 5G experience “made possible only by the 5G’s URLLC (ultra-reliable low latency communications),” the report states.
“From the investment perspective, operators are better off spending their money on 5G SA network,” the report concludes. “SA deployment mode also achieves many other economic benefits such as increased sources of revenues and can enable an operator to capture significant market share in the new verticals.”
While the report clearly favors early adoption of 5G SA, the clear majority of the world is moving the other direction, mainly out of a need to continue to derive value from costly existing network investments.
“Many parts of the network that control policy and subscriber data … do not necessarily need to be replaced for 5G,” said Emil Olbrich, an analyst at Signals Research Group, via email. “There is a lot of cost and operational overhead into managing that network, along with billing. Carriers have invested billions into this area and over the last few years have virtualized these platforms so they can be extensible to 5G.”
Olbrich concluded, “If you couple this investment with the fact that the standards effort in 3GPP, which is driven by carrier demand, has been to initially deploy NSA networks, then it is clear [why] this is the choice moving forward.”