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Broadband to the Fore: Notes from Nokia's Fixed Networks Analyst Day

At a recent virtual analyst event, Nokia shared updates from its Fixed Networks business unit (BU) with the industry analyst community. Nokia’s Fixed Networks BU has taken some time to find its footing within the combined Nokia organization. The wait has been worthwhile, with several important updates being shared.

Broadband to the Fore

While Nokia’s 5G efforts have hogged the limelight in recent years, both for their early missteps and recent positive momentum, the company’s broadband initiatives have flown somewhat under the radar. A major part of this was the massive legacy business associated with DSL and cable, as opposed to fiber. Until recently, the Fixed Networks BU had a smattering of initiatives cutting across legacy DSL and cable, increasing investment in PON fiber technologies as well as an emerging business focused on Fixed Wireless Access (FWA) and WiFi.

The industry attention on 5G has also increased attention paid to the need for broadband adoption, not only for the consumer and enterprises, but also to enable and drive digital infrastructure, with 5G’s burgeoning demand for cell sites needing fiber connectivity to the data center and core networks for optimum capacity and network performance. The symbiotic dynamic between 5G and broadband has helped clarify and clearly define the Fixed Network BU’s core mission, which is to drive broadband adoption across the globe. Nokia has been making steady progress towards realizing this vision and we believe the BU is about to reach a positive inflection point.

Broadband network deployment is also benefiting from additional drivers. These include the rise of a new class of “builders” like Nexera and Open Fiber in Europe, Cobb EMC, and Utopia in North America, America Tower in the LatAm region, and others. These new builders will provide a B2B, “neutral host” type of model going forward, with investments and rollouts aimed at plugging the gaps in coverage and availability. These new builders are also being aided by significant new investments coming in through private equity players like DigitalColony in the US, Arcus in Europe, and Whitehelm Capital in Australia. These initiatives will complement Government-sponsored initiatives in various countries around the world. All in all, industry attention is shifting markedly and with urgency towards broadband!

PON-based fiber technology is also moving towards a “decoupling”

2020 has been notable for the acceleration of a trend towards a great “decoupling” in telecom networks, with Huawei’s travails in 5G a visible case study of larger geopolitical trends. Broadband technologies are also heading in the same direction, with a schism appearing in the development of PON-based fiber networks. Back in May 2020, Huawei, along with the European Telecommunications Standards Institute (ETSI) and other stakeholders, had put their weight behind a 50G PON standard that was called Fixed 5G or F5G. Despite being in a minority in the ITU meetings on the subject, Huawei has the added leverage of massive volumes from the China domestic market to aid its push for making 50G the standard.

However, Nokia and a larger number of stakeholders, including nbn, Chorus, Chunghwa Telecom, and others, have been putting their weight behind a 25G PON standard. Nokia has also made significant investments into developing Quillion, a chipset for the OLT market that can support both GPON as well as next generation PON technologies. Nokia claimed that this approach has seen significant demand that they are trying to cater to. Nokia has worked with several operators to create a multi-source agreement (MSA) framework for the development of 25G PON networks in the “near term”. Not only does the MSA generate scale benefits for 25G, but the grouping already has major operators and vendors and could see further momentum with new players joining in the future. Moreover, 25G’s relevance for datacenter and campus environments should also add ballast to Nokia’s strategy.

WiFi 6 and FWA fortunes are tied closely together

FWA is based on cellular technologies and will leverage the momentum of the 3GPP ecosystem, while WiFi 6 is based on IEEE roadmaps and represents the evolution of the WiFi standards. While theoretically the two technologies are backed by rival camps, the reality is that the two technologies will benefit from each other and work symbiotically to drive broadband adoption in the home and enterprise. FWA helps to resolve the business case challenges with last-mile access that have weighed down operators in the past. But once the premise is connected through 5G FWA, the stark reality is that consumers and enterprise users overwhelmingly use WiFi, and market momentum is skewed overwhelmingly towards devices with WiFi as opposed to cellular connections. As such, FWA will be closely linked to the rising attach rates and momentum for WiFi 6.

Nokia is betting big on WiFi 6 as the foundational technology for broadband adoption. To that end, the company has created a new unit called Broadband Devices, which incorporates the WiFi 6 product portfolio cutting across ONTs, WiFi Beacons as well as FWA CPEs, with all devices EasyMesh certified. Nokia made a telling point about WiFi becoming table stakes for all vendors, with CSPs and ISPs all including WiFi 6 in their RFPs. So where can Nokia differentiate? Nokia has chosen to focus on a Smart Home strategy, with high-end devices like their FastMile 5G CPE, which combines high-gain antennas that greatly enhance indoor coverage while also offering WiFi 6 connectivity for the home.

Nokia is also focusing on “cloud controllers” for service management for operators. For example, the FastMile controller uses a lot of collective intelligence across different BGs within Nokia, combining geo-localization, service eligibility, and 3D modeling that give clear service predictions for operators to make better business decisions. This is very important with the advent of mmWave for CSPs to operationalize the service.

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