OpenRAN, consolidation and sustainability: the next 12 months in the mobile industry

The mobile industry continued to play a critical role in society in 2021. In the wake of further lockdowns and pandemic-related restrictions, the industry helped billions of people around the world stay in touch with friends, family and colleagues.

The rollout of 5G proceeded apace, with new smartphones delighting consumers and businesses. Telecom companies tapped into new areas to meet demand for home office and remote work. The year ended with discussions about the metaverse and what role mobile communications can play in realizing this vision, an immersive and connected future.

In the current situation, it is more difficult than ever to make accurate predictions about the future: COVID-19 and an ever-changing technological landscape make sure of that. Below, we explore four issues that are important for 2022.

Why the European mobile market needs a consolidation

Rumors of consolidation among European mobile operators have grown louder. Several executives have made the argument that cutthroat competition is driving up debt and limiting funds for upgrading 5G networks or fiber. Analysts say that in smaller countries, fewer operators would make the market more lucrative and costs can be reduced.

While Spain’s Telefónica has been raising the issue of mergers for years, companies such as Vodafone and Norway’s Telenor now agree.

The topic was high on the agenda when top telecom executives met at the Mobile World Congress (MWC) in Barcelona in February / March. U.K.-based Vodafone noted that the need for fast, reliable networks created by the pandemic has shown regulators the value of investment.

Mergers and partnerships have already occurred in other parts of the world. It appears that regulators in Europe are more open to such moves, given the importance of telecommunications to broader economic strategies and society in a post-pandemic world.

OpenRAN and the great diversification push

Open RAN is an intelligent “radio access network” (RAN). The adoption of Open RAN helps enable mobile network operators to be flexible, using equipment from different vendors while still ensuring interoperability. The Open RAN architecture is designed to build a virtualized RAN with AI-powered control, which is key to mastering 5G / 6G complexity.

The OpenRAN ecosystem went from strength to strength in 2021 and there are signs that the telecom industry is moving beyond a small group of large vendors in the 5G era. Five of Europe’s leading telecom providers – Deutsche Telekom, Orange, Telefónica, TIM and Vodafone – have agreed to work together on open network technologies. Governments around the world are supporting research, development and commercialization efforts.

Some of this support is geopolitically motivated. In particular, the UK government has been a strong supporter of OpenRAN following the decision to ban Huawei from deploying 5G in the UK. However, OpenRAN could also reduce costs and encourage innovation by removing barriers to entry for smaller players. Vodafone UK has committed to rolling out OpenRAN to at least 2,500 sites by 2027. Further trials – particularly around interoperability – and growth in partnerships are expected in 2022.

Sustainability will remain a key issue

The mobile industry has long positioned itself not only as a promoter of economic growth, but also pushing a green approach, especially when it comes to environmental issues. Warnings from the UN report on climate change and last year’s UN Climate Change Conference in Glasgow have brought the issue of sustainability to the public’s attention like never before. Operators have been eager to advertise that they are environmentally conscious.

Three prominent examples include:

  • Switching to renewable energy sources
  • Adoption of more energy-efficient network standards such as 5G
  • Developing services such as IoT that allow customers to reduce their carbon footprint

We will see much more of this in 2022.

However, it is also important that the entire industry continues and accelerates its efforts.

146 million tons of CO2 will be produced by smartphones this year, according to a forecast by Deloitte.

Although this represents less than 0.5 % of global emissions, analysts believe this amount can be reduced.

Production should be more energy efficient, devices and materials should be recycled wherever possible and phones should be easier to repair. All these measures will reduce emissions and e-waste and allow the mobile phone industry to realize its environmental potential. The above development shows that there is room for optimism.

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The need for greater security due to cyberattacks

With digital transformation comes new avenues for criminal activity. In 2015, the amount obtained globally through fraud was $3 trillion.

By 2025, fraud and cybercrime will account for $10.5 trillion.

These figures highlight the growing importance of identity and access management for enterprise applications or systems.

The security of personal data and identity is now a major concern for consumers. In 2021, analyzed data showed a significant gap between consumer expectations and actual experiences. The gap in data security of mobile apps and services (compared to expectation) is 27 %. Such a gap usually indicates a breach in trust between users and a product. For privacy, the gap is slightly larger at 1 %. In short, the situation looks serious.

Following scandals such as phishing or account takeover, consumers are particularly concerned about losing money via their cell phones. According to the MEF survey, 49 % of respondents say they are worried about being scammed and losing money. Criminals accessing their personal information (i.e., identity) also ranked first at 49 % and accessing their cell phone (i.e., the ability to authorize transactions) ranked second at 47 %. The year 2022 will be or must be, the year that the industry increases its measures to prevent and detect fraud. The dicomsys is doing its part with two-factor authentication via SMS. This method is considered very secure for most applications and is popular with consumers.

Conclusion

There is so much going on in the mobile industry. It will be interesting to see whether the major mobile providers in Europe agree to consolidate before the end of the year. The issue of sustainability with a view to climate change is also an important point. The public can already see the first changes here, but swift action is needed. The items on the agenda for an even greener approach must be worked through at a faster pace. At the end of the year, we will see to what extent results have been achieved in the areas addressed in this blog article.