by Olga Yashkova, Program Manager, Measurement & Instrumentation Practice, Frost & Sullivan
Most of us are quite aware of rapidly increasing mobile data traffic. According to Cisco, global mobile data traffic grew 63 percent in 2016. Smartphone users spend nearly 80 percent of their daily device use time on non-voice activities. Traditional capacity expansion is not enough; mobile data traffic will continue to grow exponentially and will not be met by traditional network growth. Operators will increasingly look to small-cell solutions such as WiFi/Femto/Pico off-loading as cost-effective alternative solutions to manage the rapid growth in data. Wireless offload strategies will play a critical role even after the full migration to LTE.
According to Cisco, nearly 60 percent of total mobile data traffic was offloaded onto the fixed network through Wi-Fi or femtocells in 2016. It is hard to believe but, in total, 10.7 exabytes of mobile data traffic were transferred onto the fixed network each month in 2016.
The number of Wi-Fi hotspots deployed worldwide drives the ubiquitous nature of the unlicensed spectrum. In 2015 there were 64 million Wi-Fi hotspots deployed worldwide, and this number is expected to reach 420 million by 2020, according to Frost & Sullivan research.
Because of the continuous explosion of digital data, the natural spectrum is becoming increasingly limited and expensive. Thus, the spectrum crunch can be reversed by offloading mobile traffic from a licensed spectrum to one that is unlicensed and ubiquitous in comparison.
As public hotspots are comparatively free, customers can leverage enhanced Quality of Service (QoS) and Quality of Experience (QoE) capabilities with improved coverage, while saving on roaming charges.
This trend is one the many factors driving Voice over WiFi (VoWiFi) among fixed and mobile network operators. The VoWiFi technology is positioned as a complementary service to the VoLTE technology.
According to Frost & Sullivan, VoWiFi is expected to be responsible for close to 9,000 billion minutes of use every year, representing 52.9 percent of IP-based mobile traffic, compared to VoLTE and Voice over IP (VoIP), which are expected to represent 26.3 percent and 20.8 percent, respectively, of mobile traffic in 2020.
NFV and Rise of Software-Based Solutions
Another trend which can be found in the telecommunications industry as a whole and not limited to network testing only is Network Functions Virtualization (NFV). In NFV, there is a move from hardware-based solutions to software-based solutions, thereby boosting growth.
Virtualization and automation are expected to boost market growth. As networks become more complex, the need for automation is rising. Also, the need to use test equipment remotely will help operators handle Big Data and analysis quickly and cost effectively. With virtualization, another key challenge that can be overcome is the proximity between the vendor and the user.
Virtualization is also helping reduce the barrier to entry as niche and small companies have the opportunity to enter the market with software-based products. More acquisitions are expected as virtualization gains momentum and generates openness to work with new vendors.
LTE and VoLTE
LTE, VoLTE and carrier aggregation are some of the key trends that are boosting market growth. With several operators rolling out LTE-based networks, testing is becoming more prevalent and critical. In fact, there is increased demand for new functionalities as LTE rolls out globally. In India, among other countries, there is higher growth in 4G applications and this has increased the level of competition. From a vendor standpoint, differentiating self from others to gain new customers is crucial. On the other hand, retaining customers is also a big challenge, which means vendors need to provide sophisticated LTE solutions. Moreover, QoS and QoE are used to benchmark vendors; customers consider them as differentiating factors.
As most vendors currently provide sophisticated network testing solutions, one key way to differentiate is through marketing to enhance the brand equity. Vendors are trying different ways to promote themselves, including press releases about their products and using opinion makers to establish their market presence and the quality of their products. In addition, big companies, in which different departments handle different tests, utilize various strategies to showcase their expertise. This helps them diversify their portfolio and use several means to acquire new customers. In these cases, active testing, in addition to passive monitoring, is the key to success
At least a decade ago, several operators were more knowledgeable than they are now regarding the test equipment that was available in the market. However, with outsourcing and cost reduction, it has become difficult for operators to remain updated on the various test equipment and their features and functionalities. In such a scenario, system integrators have become more prevalent in assisting these operators with the various test equipment and vendor options in the market. These system integrators are expected to play a major role in the sales of network testing equipment during the forecast period.
Automation and Remote Accessibility
Automation and remote accessibility are the upcoming drivers in the network testing market. Self-awareness of any problems in the network should occur and they need to be automatically highlighted. In addition, data management and analytics need to be smarter and automated for quicker and accurate test results. With more sophisticated test products, automation is expected to become the key area of focus for vendors to be ahead of the competition.
Even now, most operators in the countries of Latin America and the Caribbean Islands, for example, are focused on the cost of the product rather than quality and end results. Chinese products that are cost effective and customized to meet their goals are preferred over commercially available, quality, high-cost test equipment. However, vendors are trying to create awareness of the importance of high-quality testing and there is a slow but steady improvement in the mindset of operators to focus on quality. Even regulators in these regions that were focused on increasing their coverage and customer foothold are now focusing on quality. By the end of the forecast period, regulators and operators are expected to acknowledge quality and focus more on it. Vendors that work toward building quality products and work in tandem with regulators to interject quality into the mindset of their customers are expected to gain market share.
Mobility and 5G
Mobility is one of the latest buzz words. Communication plays a major role in built-in facilities in an automobile. Aftermarket insurance, driverless cars, connectivity between cars, and so on require proper functioning of the network and network testing becomes a critical part of the lifecycle.
5G is expected to bring several changes in infrastructure and networks. With this, the need for testing is also expected to rise and this will lead to more parameters monitored through Key Performance Indicators (KPIs).
OSS traces with geo-location, passive probes, and reduction in drive testing will prevail as 5G moves from the current challenging position to a more lucrative business.
Wireless Network Testing vs Traditional Drive Test
Drive test equipment refers to portable tools used for both outdoor and indoor diagnostics and troubleshooting of wireless networks. These testers obtain RF coverage and service performance measurements, provide wireless data measurement options, and enable optimization of data applications. They also enable early verification of network deployments and provide true cross-technology scalability on a single platform.
In addition to benchmarking and trend analysis, there are several other applications for which drive tests are performed. These include network optimization, acceptance testing expansions, and new technology implementation evaluation, as well as scan drives for engineering maintenance. Even at the early stage of network construction, drive testing is an important method of evaluating network conditions.
Drive testing is vital for mobile operators and is conducted to discover coverage gaps in networks. Drive tests help mobile operators maintain and improve the quality of their network, for instance, by recognizing the need for tuning network parameters in order to achieve better coverage.
A conventional drive test is a manual process that is primarily done by engineers in the field collecting radio measurements. Such tests tend to demand significant time and human labor and are costly. The concept of Minimization of Drive Test (MDT) emerged from an idea to use each device that is active in the network. This means that standard mobile phones should be used for measurements to provide data for the operators. The work on automated drive test was started in 3GPP with the purpose to create MDT in March 2009.
Carriers need to know where the network coverage is supposed to go, as customer churn is so expensive and poor coverage and poor service are the top drivers of churn. Service Providers (SPs) desire to obtain better, richer, and more detailed information about the quality of the coverage, and for now, there is an enormous demand for a drive test solution that communicates virtually with other tools.
The work item was finalized in 2011 as part of the 3GPP Release-10 specification. Following are the key features of MDT:
The ability of the User Equipment (UE) to include location information as a part of UE radio measurement reporting
The ability of the UE to log radio measurements during the UE’s idle state
Reuse of radio measurements to those that have to be performed anyway as a part of normal radio resource control procedures, thus, reducing extra complexity and battery consumption by the UE
With each new wireless technology rollout, there is a critical need to refresh and update drive test equipment so that the new technologies can be successfully and accurately measured.
A major restraint of the drive test market is that drive testing is a labor-intensive activity. Operators and infrastructure vendors are under pressure to reduce the manpower that they deploy in this area, which reduces the amount of test equipment purchased.
Currently, demand has increased for next-generation drive test solutions, which will be the bridge between customer experience and network coverage. Frost & Sullivan observes a large number of SPs investing in the new generation drive test equipment, as it is crucial for them to know where to place new towers, where to add more capacity, and how to pinpoint problems in their network coverage. An enriched drive test is what SPs seek.
MDT is expected to be a key competitor for drive testing, as it provides the option of collecting the data without even sending a person to the location of the network. MDT is truly wireless in that sense and will also reduce the cost of drive testing for network optimization.
There are a lot of smart devices in the market today and the end result is an increase in traffic data. Apart from smartphones, there is a lot of push from end users toward wearable devices. At this juncture, security is also a key criterion. Thus, the need for test devices increases in order to ensure proper network performance. Comprehensive network benchmarking is the need of the hour.
Currently, OSS testing and drive testing are applicable for 3G, 4G/LTE, and even VoLTE. However, with the evolution of newer technologies such as 5G, drive testing becomes expensive and exorbitant. The testing process has to be redone from the beginning with a new workflow process.
Similarly, while SON provides great opportunities, it is extremely expensive to engineer it. Unless very large conglomerates such as Samsung or Apple, for example, invest in SON to the fullest extent, it is very unlikely for SON testing to grow.
Challenges of the Wireless Network Testing Market
A key challenge for vendors to handle is issues with VoLTE such as mute and one-way audio. Operators will be in a position to gain more customers and retain them once they are able to handle these issues.
Another main challenge faced by test vendors is as follows. As operators spend more CAPEX on new spectrum with the advent of 4G/LTE in certain countries and upcoming 5G, there is limited CAPEX for test equipment. This hinders sales to a certain extent until the transition to new technology is complete.
The third challenge in the market currently is that geo-location is still not accurate, at least up to a 50 meter radius. Although it can be used for aggregate analysis, it is still not accurate enough for drive testing. This leads to reduction in the quality of customer experience.
End users such as infrastructure vendors and mobile operators are increasingly using MDT to reduce the amount of drive testing; however, Frost & Sullivan foresees that there will still be use cases in which MDT will not be able to replace drive tests.
MDT integrated with geo-location is expected to provide more accurate results that will enable vendors to provide more services.
With network becoming more complex, there is higher requirement for sophisticated test instruments. Vendors need to focus more on time-to-market, higher quality of data collected, and increasing reliability. Drive test provides a new way of testing with automation.
Indoor settings account for more than 70% of all mobile voice revenue and 90% of all mobile data revenue. Mobile operators are challenged to provide great coverage in stadiums and shopping malls because of bandwidth issues. Many of today’s data services and applications such as Facebook and FaceTime, mobile video, and location-based services put tremendous strain on networks. In addition, the density of subscribers in confined indoor spaces makes it difficult for mobile operators to provide reasonable RF coverage indoors. As a result, they often fail to provide a positive user experience to their consumers. In order to prevent customer churn, mobile operators have realized the necessity to test their indoor and outdoor coverage.
Outdoor drive test solutions are expected to contribute the biggest share of 78.5% to the total drive test equipment market revenue in 2017.
The indoor walk test solutions segment is estimated to add 21.5% to the drive test equipment market revenues in 2017. This segment is in its growth stage and because of the recent indoor capacity issues resulting from smartphone and tablet data usage, the demand for indoor walk test solutions is on the rise and geo-location solutions are not enough to provide a complete picture of indoor network coverage.
Frost & Sullivan believes that the indoor testing market still has room to grow. The current growth rate has not been as aggressive as industry predictions. Indoor walk testing solutions are low cost and do not generate much revenue. However, on the other hand, walk testing is more expensive compared to drive testing. Operators and infrastructure vendors still need to test on the macro level, meaning conduct drive tests. With the arrival of 5G, the industry would need more spectrum testing through drive test equipment.
By the end of the forecast period, indoor walk test solutions are estimated to represent 23.5% of overall drive test equipment market revenue, while outdoor drive test solutions would contribute 76.5% in 2023.
The revenue of the SON testing equipment segment of the wireless network testing market reached $961.2 million in 2016 and is expected to touch $1,586.3 million by the end of 2023, at a CAGR of 7.4% from 2016 to 2023.
The SON market hit a wall, deployment wise, in 2016. Full SOM deployments have not taken place yet. Operators are hesitant to automate too many things at once, especially in their networks. Until they do more analysis and keep track of the changes in the network, they are not going to be fully automated.
Operators simply want to take it step by step and if things can be sensibly automated, they will do it. No operator will go to Nokia and request a SON solution at the present time.
They gradually automate things and try to improve communication and so-called “decisioning” with analytics and apply that into controllers and orchestrators. The automated action is taken but not a complete one.
Companies such as Nokia and Amdocs, who have been trying to sell the full SON solution to the market, have now backed off. They are still promoting them, but as far as SON deployments are concerned, they are not happening anywhere near what the market was hoping for.
Today’s SON provides many positive attributes and is being deployed widely in the name of process automation and operational cost reduction. However, Frost & Sullivan concludes that the technology and the standards around it will evolve gradually alongside 4G deployments, 5G introductions, NFV, and SDN, to become a more comprehensive solution. SON will eventually span all network segments (access, core, and backhaul) as well as all aspects of the business (cost, profitability, performance, and customer experience). Like other all-encompassing new business strategies, the full realization of SON and its significant business benefits will surface gradually over the next 5 to 7 years as service providers and even large enterprises engage with automation, data analysis, and network definition in ways never tried before. Currently, SON comprises tools from several existing software solutions.
Going forward, the network elements themselves will also need to be more intelligent, predictive, and responsive. They must be taught to respond rather than recommend, to anticipate rather than react, and they must do so automatically and autonomously. In other words, optimization needs to be baked in. The industry will begin to see this level of inbred intelligence with the rollout of 5G technology. The historic solutions to both challenges—the engineering challenge of scaling capacity and speed and the operations challenge of intelligently managing tremendously dense networks—have been moving toward each other: hardware toward software, software toward hardware. The juncture, when it happens—sometime after 2020—is where Frost & Sullivan expects SON to ultimately reside. Together, intelligent infrastructure and software-automated processes will make SON a full reality.
As far as SON’s impact on the network optimization market is concerned, drive test, in particular, has not been terribly drastic. SON’s proposition is very attractive; however, the technology has not proven its complete success as promised in the network optimization area. SON is still in a rather delicate state. If the technology is not deployed correctly, it can harm the network, yet, with time, SON will improve and become more reliable.
MDT is making quick inroads into the wireless network test equipment market. Infrastructure vendors are determined to significantly minimize the amount of drive test needed in the future, which will reduce their costs.
Geo-analytics solutions are being increasingly used by mobile operators and infrastructure vendors; however, location accuracy needs improvement. Astellia claims to provide geo-location accuracy at 50 meters.
There are plenty of opportunities to monetize for vendors that offer geo-location solutions with accuracy below 50 meters.
Even though MDT is prevailing, drive test will remain vital to operators and infrastructure vendors as it is the most reliable solution today.
Indoor testing is increasing; however, growth is not as aggressive as originally predicted. Indoor testing solutions tend to be more expensive than drive testing because they serve a very concentrated area. End users still need to test on the macro level, where drive testing is crucial.
When 5G becomes a reality, operators and infrastructure vendors will need to perform spectrum testing using drive test equipment.
Crowdsourcing is talked about, yet it has not shown high revenue numbers and remains in the initial stages due to controversies over using collected data. Crowdsourcing currently, has a minimal impact on the wireless network test equipment market.
Operators’ purchasing patterns are changing and sales cycles are becoming longer. Operators are becoming more cost conscious.
End-user experience, QoS, and aftersales service are key competitive factors for market growth.