Last week, we did a quick run through of AWS’s solution for building DISH’s 5G core network. Here we want to look a little more closely at DISH’s motivations for going with AWS and speculate a bit on what it means for other operators.
DISH is best known as a provider of satellite TV service. They have been dipping their toe into cellular and Wi-Fi networks for a long time, but they are now preparing to take the plunge into a full-blown nationwide 5G wireless network. By starting with 5G, they gain a big advantage in that they do not need to support legacy gear, a burden with which the incumbent operators are struggling. 5G also has the advantage of greatly simplifying core network services, essentially bringing standard software methodologies to the telco world. The best example of this is Reliance Jio in India. They launched a greenfield 4G network and were able to blow the competition out of the water with much lower prices. A big component of operators’ variable costs rests with its need to maintain those legacy networks. The cost of operating stand alone 4G- or 5G-only networks can greatly reduce those costs. We are not forecasting DISH achieving Jio’s level of industry disruption, but this approach does give them a realistic shot at building a viable operation.
DISH has also emerged as a major proponent of the Open RAN (ORAN) project. ORAN is controversial, it is potentially a big threat to the established equipment vendors. Those vendors point to key critiques – that ORAN is not ready for commercial service yet and it ends up being more costly than traditional solutions. DISH is about to put both of those to the test.
The combination of 5G’s software ‘openness’ and ORAN’s blueprint for taking advantage of that, allow DISH to choose the best (i.e. most economical) way to deploy their network. The fact that they chose to do this on AWS’s cloud is a powerful endorsement of the cloud service providers’ years-long effort to attract telco customers.
By now, the argument for running software in the cloud should be familiar. Let the cloud provider pay for all the upfront costs (capex) of building data centers, as well as the significant burden of maintaining those systems (opex), freeing up customers to focus on areas where they can leverage their core competencies without being burdened with all the complexity of the physical hardware. There is a growing counter-tide to this ‘perceived wisdom’. Notably Martin Cassado, long-time networking expert and VC, has argued that once companies reach a certain size, the economics shift back towards in-house data centers and private clouds. We imagine that DISH did their own math on the subject and still went with AWS.
A big part of the expense of a cellular network is putting up local sites (aka base stations). But DISH is providing all this themselves. So it is very possible that by going with AWS DISH is not actually saving that much money. If true, why did they go with AWS anyway?
We suspect that very dense AWS blog post holds the clue to the answer. First, AWS unquestionably has some of the best talent working on these problems. Meaning that the solution AWS designed could very well be better than what DISH could have come up with themselves.
Second, and probably key, is the ‘flexibility’ that AWS provides. Traditional telecom solutions are fairly rigid. Want to add a new pricing tier – that is likely going to take six months of fiddling around with legacy billing systems. Do consumers suddenly want to go retro and start using ring-back tones again (music played to someone dialing a number)? Traditional systems would take months of re-tooling to make this possible. By running ORAN on AWS, both of these services largely become simple coding exercises. (Yes, we are greatly oversimplifying, but there is no arguing that this approach is much more code-friendly than any other path.)
So this approach clearly makes more sense for a new entrant like DISH, but is it applicable to established carriers? We have to think that the answer is yes, but those legacy systems are a real hindrance. That being said, if DISH is able to scale, grab some share and rapidly deploy software changes to its offerings, we have to think that those other operators will find a way to bridge their legacy to the Cloud as well.
It remains an open question if this is truly attractive to the operators long-term. They would have to place a lot of faith in the cloud operators. Not only to offer reliable service, but also to maintain that service. Core networking like this was once seen as a core competency of the operators. The fact that there are now many operators shedding that is a major shift.