ZTE’s Analyst Summit - AI, 6G, and Global Network Innovation

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and sixty fifth episode of the week with Roger, conversation between analysts about all things telecom, media and technology by Recon Analytics. I'm Don Kellogg. And with me this week is my colleague, Darryl Schuler. Darryl, how are you doing?

Roger Entner 0m24s

Good, Don. Thanks for having me.

Don Kellogg 0m26s

So you just got back from an international trip. You went to go see a vendor event. Can you tell us about it?

Roger Entner 0m33s

Sure. This was ZTE's Annual Analyst Conference. This year was a little bit different as they combined both mobile and wireline events at the same place. This year was in Milan, Italy. They picked a fantastic location.

Roger Entner 0m49s

It was at the da Vinci Museum of Technology and Science. And as they've done in the past ones, and so this is I think my fifth one of theirs that I've attended, I really like the way they structure them. Unlike some other vendor events I've been to, DTE spends the first day actually having clients talk about what they are doing when it comes to mobile or to wireline. Lot of other vendors, they'll spend the first day just basically talking about themselves. ZTE always brings in third parties to talk about issues, talk about what they're doing, how they're working with ZTE, which I think really helps ZTE in terms of credibility.

Roger Entner 1m25s

And as an analyst, I certainly appreciate hearing from other voices. And then on the second day, they have a deep dive based on what your area of interest is, which is really where ZTE talks a lot about themselves. It's a very good balance. I like the way they structure it.

Don Kellogg 1m40s

Awesome. So what did you learn? Let's start talking a little bit about some of the vendor viewpoints that you heard and then some of the deeper technical stuff you heard on day two.

Roger Entner 1m50s

Sure. Well, as anybody would expect these days, AI was mentioned very frequently by the operators that spoke and on the second day by ZTE as well when they're speaking about their different network solutions. So by AI, when they're talking about, say, it's like the telco use of AI, this is not talking about chat, GTT or more of the consumer facing type solutions that most people are probably familiar with. This is really about how to create an AI native network where the AI interfaces between the networks are built into the standards. So while the AI solutions may be different, operators know how they interact.

Roger Entner 2m29s

But really we're talking about using AI, say at the base station level, at the core level, even Versus OSS. Right now, really to achieve a couple different goals, obviously to improve network optimization. So with that, that's lowering the cost of running the network. It's about improving spectral efficiency of the radio access network. It's about predicting network issues such as outages, congestion, security threats, and right now, assisting humans in terms of correcting those problems.

Roger Entner 3m3s

While the long term conversion that the operators talked about, where they want to go, though, is to increase automation of everything I just discussed there. Because right now it's really AI to assist humans. What they would like to see is eventually going go into more of an agent AI type solution, where not only does the AI recognize the problem or diagnose the best results, but then to close the loop and fix it itself. And this is definitely important beyond just the cost features is just as we start talking about future services, everything gets more complicated. So the more you can remove the human touch enabling those services, Ideally, it will lower the chance of having problems of a fault, of something being entered incorrectly.

Roger Entner 3m50s

But of course, that takes a lot of trust of the AI and we're a long way away from that right now.

Don Kellogg 3m56s

Right. So right now it's mainly human assisted management in the network.

Roger Entner 4m0s

Absolutely. So it's human assistant and also on top of that operators are selecting where to start. So we talk about an operator using AI. They aren't using it at once across everything that they do. They're not using it across every network element or every network domain.

Roger Entner 4m18s

They're basically like really starting off in non real time areas. So that'd be more on the BSS and OSS things where if a mistake is made, it won't take down the network and then they're bombarded with lots of negative press. So they're kind of picking up areas where they can go in, they can set some KPIs and run it in an environment that is least harmful to them to build up confidence and prove out the solution before they take it to the next step, which would be really moving more into real time. And ZT themselves is very involved in this. They talk about ZT is helping to create basic LLMs for the operators.

Roger Entner 4m56s

The operators want also their own LLMs for these very telco specific. But beyond just a telco specific, they also kind of very operator specific as well. So tailored towards a specific operator, the language that they use, individual conditions that they might run into. So ZTE kind of starts off with a basic LLM that's really telco focused, but then they can supply their partners with the LLM and then the partners will take it, the operators will take it to the next step and continue to add to it and customize it specifically to their needs.

Don Kellogg 5m30s

That's really fascinating. So basically just purpose built AIs defined to a specific carrier in the ecosystem that they inhabit, which makes a lot of sense, right? I mean, these are huge technological endeavors and they need to be operational all the time, right?

Roger Entner 5m43s

And one the issues that they talked about that I hadn't given as much thought until being there is the issue as you go along with this, there is concern about creating too many AI agents because if everything has its own AI agent, then all a sudden you have a whole another round of complexity. So beyond just creating an AI agent and creating the automation that they want, now they're gonna also after that, we're gonna have to reconcile the different AI agents so they can work together.

Don Kellogg 6m7s

Yeah. And that's a good point. Right? Orchestration across agents adds complexity as well. I think one of the things that's really interesting and cool about events like this is you get a good perspective.

Don Kellogg 6m18s

You know, we hear a lot about what's going on in The US. You know? But with these events, you oftentimes get a lot of really good perspective on what's going on in in the rest of the world. And, know, I think we're in a typically a very different place than some other parts of the world are in terms of just kind of the type of networks are being deployed, the technology that's being used, etcetera. Can you talk a little bit about what you heard about the rest of the world telco operators and services?

Don Kellogg 6m41s

What's going on?

Roger Entner 6m42s

Yeah, I mean, it's honestly these events you always see through different services like you said, but they don't always translate to our environment. Like bringing in a more developing economy, you see operators are taking more of a role in helping to facilitate micro loans. The use of different payments systems in that regard has been something that's been ongoing in these markets. So you see applications in that area, which you just don't see really here in The United States using your phone to make micro loans or the involvement of the operator there. Other ones where you do see operators doing more on the consumer type services with gaming, having their own gaming solutions.

Roger Entner 7m22s

Obviously, video is big all over the world. So from that level, the operator is really going to provide a lot of the same kind of like partnerships like you see here in The United States, but it's more regionalized content. And then when you get into China, that's a whole another thing. That market is clearly much further ahead of any other region when it comes to five gs, enabling it for B2B type services when it comes to slicing and private networks, pushing it forward in terms of the manufacturing space. But China itself is honestly just a unique market, say, compared to The United States.

Roger Entner 7m56s

But one of the other things I'd say on the negative side though, or if you are suffering or you face the challenges, maybe it's reassuring. Even with all these advanced services, one thing that became clear is that operators across the world are struggling with finding ways to continue to grow revenues. The big things have been done, getting coverage out there, getting smartphones out there. Many markets, I mean, that's already done. And so the next step in terms of how to grow revenue becomes a lot more incremental and a lot bigger challenge because they're not mass market solutions.

Roger Entner 8m28s

Those B2B with slicings and private networks, those are very specific and bespoke and well, you are seeing success in terms of deploying them. And in some markets because of spectrum, lack of say, what we have here is CBRS spectrum. In other markets, you have to continue to use the operator's spectrum if you have a private network. So that gives the operator there a much bigger role than you'd say see in The United States with private networks. But even those cases, idea of something that's repeatable and large scale still continues to evade most operators in most markets.

Don Kellogg 9m1s

I mean, think one of the things that a lot of people have begun talking about recently over the last year or two has been what's next with six gs. And I know we're still right in the middle of five gs, but everybody's starting to think about and talk about what six gs might be. I know ZT had a six gs announcement there. What do you want to tell us about that?

Roger Entner 9m20s

I mean, as I pointed out, and this falls into the, you know, the tradition of ZTE as well. So ZTE, for my analysis, I used you know, I'm looking at the different components of the ring. ZTE has always been very strong in radios. And that's been where they oftentimes when it comes to the next gen, where they first make their first play. So they did this week launch a pre six gs, a new radio, I believe it's like pre Giga MIMO, two fifty six transmitreceive antennas.

Roger Entner 9m52s

So it's a bigger step forward to move for spectrum beyond just 100 MHz channel, look into the 200 MHz channel. It kind of sits there in the middle where you would expect them to start. So it's not a new air interface. It's not a new core network. And I'm not sure if you're going to have a core network with six gs.

Roger Entner 10m9s

But it's improvement of the antennas that should fit where the spectrum profiles will be. And by that, I mean the band, mean the amount of megahertz we're talking about that they're looking at upgrading channels with their six gs, which leads to more capacity and higher speeds. Back during the four gs era, it was about five or six years ago they came up with the first pre-five gs solution in this area. And so it of fits that now that we've hit the six year of commercial deployments that they're starting to talk about their pre-six gs antenna. As far as I know, think this is probably the first pre-six gs announcement in this area.

Don Kellogg 10m45s

Got it. That's pretty cutting edge.

Roger Entner 10m47s

Pretty kind of shows that how ZT is kind of a leader in this area of antennas. But beyond that though, I got to say the six gs talk is still very subdued and a lot of us goes to the challenge and disappointments of five gs. I mean, so ZT can show all these different solutions with 5Gs, but the commercial part, they can only push operators so far. The commercial, like I said before, it's still just not seeing a big change that justify a lot of the investments that they make. So what you can know about six gs is a lot like five gs but better, which is frustrating.

Don Kellogg 11m21s

Well, let's be honest, five gs is kind of a lot like four gs but better, right?

Roger Entner 11m26s

Yes, but at least it came with the promise that it's going to be more designed for the vertical markets in the B2B. You don't even have that type level of change with six gs. It's just like, yeah, it's still B2B vertical markets, but better.

Don Kellogg 11m38s

Well, mean, I think the other elephant in the room is the question of whether or not, I know we were talking about this a little bit earlier, The extent to which does the standard get split based on in China, outside of China. What are your thoughts on that?

Roger Entner 11m51s

Yes. That's a real possibility. It's something I continue to want. I wouldn't say it's not gonna be like, back during the three gs, there was a China standard that was just like TD, CDMA that was strictly just in China. Huawei and ZT are way too global to do something like that.

Roger Entner 12m6s

So it wouldn't be just like a China domestic only standard, but you could see possibly a standard that is more for operators within say China vendor sphere, which is honestly parts of Asia, China, Latin America, Africa, and then like a Western. But even then though, as mobile has become so global, I don't believe even China wants to they want to make sure that at the air interface level everybody can run. Because mobile is global. I really don't think we're going to end up like a split like that where there's a difference between air phases. We're not going to return to the days of CDMA versus GSM or LTE versus WiMAX.

Roger Entner 12m46s

This is definitely, I think, still going to be one standard. But I think what you can possibly see is that within the 3GPP standards, that there are definitely probably going to be some maybe some six gs features that are much more relevant to China or to partners of Chinese vendors than they are say to Western vendors. And that there could be some Western features that ZTE and Huawei opt not to support either. I think that's really where we end up more where the split is. Because within 3TPP, obviously there's like the big standards, air interfaces, mobile core and all that.

Roger Entner 13m18s

But then there's always a list of other features that go along with it that operators and vendors tend to kind of pick and choose more with.

Don Kellogg 13m27s

Right. Same language, different dialects, so to speak.

Roger Entner 13m31s

Yes, yes. I don't think there'll be a total split, but I think there'll definitely possibly could be differences. Yep.

Don Kellogg 13m37s

All right, well thanks, Daryl, for patching us in there. And it sounds like it was a great event. Particularly, think the new six gs technology stuff is interesting. It'll be really fun to watch it develop over the next few years or so.

Roger Entner 13m48s

Yeah, absolutely. ZT does a good job with their events and they really are very open about sharing information. And like I said, this pre-sixty, it may seem way new to some people, but it's the right point. As you hit that midpoint, you start talking about what the next generation is going to be. And you start providing something that you could use with the current generation, but we'll have legs in the next generation.

Roger Entner 14m11s

That's really what ZT was doing with their announcement this week.

Don Kellogg 14m14s

All right, man. Well, thanks for giving us the rundown. And listeners, we'll probably be back with Roger next week.

Roger Entner 14m20s

All right. Thank you.

Don Kellogg 14m21s

Talk to you soon.