How to optimize total cost of ownership (TCO) to accelerate 5G network evolution (Part One)

As global service providers launch 5G commercially, one of the essential points they need to check off is TCO (total cost of ownership), “How can cost efficiency be achieved to accelerate 5G service and offer benefits to consumers at the same time?”

I was recently a keynote speaker at the IEEE* WCNC** (Wireless Communications and Networking Conference) 2020 – a virtual conference which is the world’s premier wireless event. During my speech, I shared Samsung’s perspectives regarding, “Next steps and challenges for 5G network evolution.”

Taking what I discussed in my speech, I’m introducing a two-part blog. The first part will discuss how we can approach the 5G evolution with 5G cost accelerators and optimizers in mind, and the second part will be about understanding four pillars of 5G network evolution.

TCO components: 5G Cost Accelerators & Optimizers

5G networks are fundamentally different from legacy networks such as 3G and 4G. In 5G, a new network architecture is needed to achieve efficient handling of the explosively growing, high-volume data and provide seamless service. Operators are adopting new servicesto enable themselves to generate revenue by offering a new user experience, while minimizing TCO.

According to a report issued by GSMA in 2019, there are two main factors in 5G cost: cost accelerators and cost optimizers.

Cost accelerators are the factors that increase the cost, and they can mainly be divided by CAPEX and OPEX. Since OPEX takes up the biggest portion in cost accelerators, it is of paramount importance to find a way to offer flexible and diversified benefits while efficiently lowering OPEX. Cost optimizers can serve as a catalyst to accelerate 5G network evolution. There can be dramatic changes in RAN costs, xHaul costs, core infrastructure costs, energy costs as well as other OAM costs in 5G.

As mentioned above, TCO plays a pivotal role in accelerating improvement in service. In other words, the TCO is essential for 5G evolution.

Let’s look at RAN network evolution as cost optimizer.

In D-RAN (Distributed RAN), the baseband is co-located with radio. All the baseband functions such as PHY, MAC, RLC, PDCP, and RRC/SDAP are done in the cell site. As basebands are centralized at Edge Cloud/DC, there is gain with simplified radio operation and site leasing cost reduction. In this sense, C-RAN is clearly a cost optimizer.

C-RAN (Centralized RAN) comes with a higher transport cost. As all baseband processing functions are moved to a central hub site, this creates a large amount of data overhead between radio and baseband. Thus, C-RAN requires a very high capacity fronthaul transport network where you may need more fibers and efficient packet switching that supports stringent synchronization. To maintain the gain by centralized architecture, C-RAN requires a fronthaul solution that is economical and technically viable to remain as a cost-optimizer.

Having addressed all these drawbacks of C-RAN, vRAN (Virtualized RAN), the new architecture, is receiving strong interest within the industry. It further enhances the flexibility by virtualizing the functions of basebands in a common resource pool made up of the COTS (Commercial Off-the-Shelf) servers, allocating resources in a flexible manner according to traffic conditions. There is resource pooling gain with vRAN.

• Resource Pooling gain comes from the programmable S/W control of total cell capacity allocation that can be dynamically changed per traffic conditions: for instance, when more traffic comes from some cell sites measured as the active number of UEs, then the UE allocation capacity for such cells can be dynamically increased. Likewise, when less traffic comes from some cell sites, the UE allocation capacity for such cells can be dynamically decreased.        
  

On the other hand, O-RAN (Open RAN) can also provide cost efficiency and serve as one of the cost optimizers.
 

• O-RAN function split is another opportunity to reduce the transport cost by off-loading some centralized Baseband L1 functions to the radio side. Option 7-2x is one of the standardized options by O-RAN and they are discussing other options such as Option 6.
• O-RAN Function Split helps to reduce transport cost significantly.

Going beyond commercializing D-RAN, Samsung commercialized C-RAN and has supported it for years in metropolitan areas, where the most densified networks in the world are deployed. Based on its long experience of operating networks with cost efficiency and providing high quality network experiences to consumers, Samsung aims to be at the forefront of driving RAN evolution towards vRAN and O-RAN.

In the next blog, we will discuss the four pillars for 5G drivers.

IEEE Communications Society (ComSoc)*

Founded in 1952 as the Institute of Radio Engineers (IRE) Professional Group on Communication Systems (PGCS), today's IEEE Communications Society (IEEE ComSoc) has evolved to include a diverse group of global industry professionals dedicated to advancing all communication technologies and the improvement of the world around them.

An independent Society of Institute of Electrical and Electronics Engineers (IEEE) since 1972, IEEE ComSoc has 200+ Chapters in 142 countries and over 24,000 members around the world in communications technology and information networking. For information, go to www.ComSoc.org.

IEEE Wireless Communications and Networking Conference (WCNC)**

IEEE WCNC is the world premier wireless event that brings together industry professionals, academics, and individuals from government agencies and other institutions. WCNC provides an opportunity to exchange information and ideas on the advancement of wireless communications and networking technology, especially after the launch of 5G.

Due to the outbreak of COVID-19, WCNC this year will be held as a virtual conference from the 25th to the 28th of May. With the theme of "Beyond Connectivity: What Comes After 5G,” WCNC 2020 Virtual Conference will feature a highly technical program including keynotes, technical sessions, demo sessions, 10 tutorials, and 10 workshops. The keynotes will be given by industrial leaders from Samsung, Huawei, ETRI, SK Telecom and academic leaders from Technische Universität Dresden and Ohio State University.