October 15, 2021
The expense of building and maintaining customized client servers is driving enterprise clients to the cloud, a particularly attractive destination for those building new wireless networks for mobile smart devices. Dish and Japan’s Rakuten Group online retailer are two enterprise businesses buying into these “virtualized networks,” generally believed to offer cost efficiencies, with little to no diminishment of service (and potentially improvement). Processing resources can be allocated to locations where traffic surges and traffic can be easily shifted from one server to another in the case of technical failure.
Rakuten, which is building a new wireless network that will be the fourth to service Japan nationwide, “wouldn’t be able to compete if we operated in the same way as the rest of the industry,” according to Rakuten Mobile exec Nobuyuki Uchida, quoted in The Wall Street Journal, which estimates the company is saving about 40 percent on its network build-out.
The total network cost will be about $10 billion, according to WSJ, which speculates Rakuten’s operating costs could be 30 percent less than those of its larger wireless competitors.
In the U.S., Dish is making a play to be the fourth national player for mobile service. Dish is building a 5G network running on the Amazon Web Services cloud that will be tested for the first time in Las Vegas later this year. Dish chairman Charlie Ergen said on an August 9 earnings call that virtualization will transform the telecom industry by allowing companies without existing infrastructure to compete.
Both Verizon and Samsung Electronics recently reported results from end-to-end cloud virtualized 5G data session in Texas, Connecticut and Massachusetts. Verizon indicated the trials achieved speeds roughly the same as traditional hardware-based equipment.
In Japan, NTT DoCoMo is hedging its bet with a more cautious approach to the cloud, WSJ reports. Japan’s leading mobile operator plans to build-out a virtualized network by 2025, “but that plan doesn’t include its base stations.”
While cloud-based wireless is perceived as essential to 5G due to cost and flexibility, the jury is still out as to whether it’s cheaper and potentially better. Currently, “traffic speeds may be superior on traditional networks that use equipment optimized for juggling lots of data quickly,” WSJ summarized for Gartner analyst Kosei Takiishi.
It remains unknown if a virtualized network “is truly more cost-effective than a traditional network,” reports WSJ. As a new entry in the field, “Rakuten has yet to be tested by the huge traffic volume of its established rivals.”