As 5G begins to gain greater ground in today’s world, the ICT sector is beginning to realize its potential. The possibilities, with a network like this, are unfathomable. 5G offers tremendous revenue opportunities for telcos, which include opportunities beyond the smartphone.
One major difference between 5G and LTE is that 5G will essentially be more of an asset to enterprises. As consumers who rely on data to go about our daily smartphone routines, we can certainly expect 5G to be a huge step up from what we currently have right now as the next-generation network offers higher throughput, ultra-low latency, and incredibly fast speeds. However, the opportunities that lie beyond the smartphone are where the real value and potential of 5G can be realized.
Over the past few years, 5G has been regarded as the ICT industry’s next major phase, but it could offer so much more.
The worldwide 5G network infrastructure market revenue, according to Gartner, is projected to double in 2020, amounting to an average of $8.1 billion. Meanwhile the total wireless infrastructure revenue is expected to decrease to $38.1 billion, around 4%, this year.
Investments made by telecom operators in 2G, 3G, and 4G network infrastructure are all expected to drop by 40.8%, 37%, and 20.8% respectively.
Meeting and understanding consumer expectations
Consumer expectations are much higher today. In our demanding society, consumers expect faster and smarter services and this may just be the key to leveraging the maximum value from 5G for communication service providers.
Therefore, realizing their place within the new and continuously evolving value chain of 5G-driven services is essential.
Understanding 5G’s potential
“5G technology will expand the value of mobile networks to take on a much larger role than previous generations, empowering many new connected services across an array of world-changing use cases,” wrote 5G Americas in their report entitled: ‘5G Services Innovation’.
“The global 5G standard will advance mobile communications largely from a set of technologies connecting people-to-people and people-to-information to a unified connectivity fabric connecting people to everything,” the report added.
5G is designed to support various spectrum bands and regulatory paradigms. 2G, 3G, and 4G were not able to operate like this. They mostly operated in bands below 3GHz, whereas 5G has been designed to operate not only on licensed spectrum but also on unlicensed and shared spectrum. Licensed spectrum will continue to be a ubiquitous component of wireless connectivity but 5G offers greater flexibility so others may be used wherever needed.
The wide area of coverage that is offered by the bands will allow for use cases involving the Internet of Things (IoT), Massive IoT (MIoT), and augmented and virtual reality (AR/VR), among many others.
The next-generation technology will essentially enable several use cases which would benefit the majority of society. It could make great strides in healthcare, unmanned vehicles, surveillance, and so on.
5G will transform the paradigm at which the telecoms industry is operating and a new paradigm of network services will gain ground. This will ensure a more efficient and defined network fabric. In fact, it has been speculated that a great deal of 5G’s revenue growth potential relies upon the transformation of operational and business support systems (O/BSS). This means that service providers will have to devise and follow a different approach to capture the market’s value from the network capabilities of 5G.
For operators to achieve proper 5G monetization, they would need to not only take up a new approach but to also understand that 5G is not a simple upgrade from the previous generations. In fact, 5G will ensure that a very competitive environment is formed which would in turn enable a much faster time to market for service providers when it comes to rolling out their digital services.
The very architecture of 5G, which is service-based, will make way for innovative digital services that operate at rapid speeds from several providers which would inherently bring these operators and their services a great deal closer to IT systems which will essentially support O/BSS.
Some key monetization opportunities, in this case, will include new innovative digital services, perhaps new broadband bundles as well as device management and IoT monetization, which 5G adds a great deal of value to.
Realizing the evolving nature of 5G
Realizing the evolutionary aspect of 5G will do operators a great deal of good. They will have to consider taking up an approach that will consider the evolutionary nature of this technology to properly embrace 5G monetization. This approach must also include maintaining the monetization of 3G and 4G assets to ensure greater optimization for longer periods until 5G fully takes over and a 3G to 4G migration strategy or plan is set.
5G will help ease the pressure which is placed on 4G networks in terms of traffic and allow for those 4G networks to work more effectively. This will help meet the ever-increasing demand for video content on these networks.
Network slicing entails slicing a single network infrastructure into several virtual occurrences to extend the network’s capabilities. This is a key feature of 5G.
The slicing ensures that service providers optimize their service delivery on several levels meaning that this can be altered depending on the parameters of the service delivery itself when it comes to the use case. For instance, some use cases are more latency-sensitive than others so network slicing can ensure that particular attention is paid to this and enabling service per slice.
This can be bundled into offers for enterprise customers as it will be a key differentiator for their services.
A new service delivery model will be generated due to the software-driven network. This will ensure the delivery of unfathomable speeds.
It essentially unbundles the software elements and moves them to the cloud. Software-defined networking essentially centralizes network decision-making by dealing with data traffic on a macro scale in real-time.
Indeed, a network that is fully virtualized allows for service providers to adopt a business approach which is a great deal more flexible, scalable, agile, and cost-effective with a short time to market.
André Årnes, Chief Security Officer and Senior Vice President, Telenor Group, said that making a profit from 5G requires a two-part approach: focusing on ecosystem development and deploying the technology.
“First, it’s what you refer to as the ecosystem and the fact that we know we need to become a hub for the creation, and attracting a lot of partnerships with other operators, technology providers, OTTs and regulators…that’s a strength. The other element is the technological development. As Årnes said, 5G plus IoT plus AI, that’s the perfect storm of technology.”
He added, “I think the value in 5G itself is in the ecosystem and the services. So, I think it’s important for us to be careful and invest very wisely and that we do it gradually – and, of course, leverage 4G to the next step because that’s also been an important investment for us.”
According to Erik Meijer, Board Area, Technology & Innovation, for Deutsche Telekom, in their case, the monetization of 5G involves “enabling smart factories in a very precise way, have slice networks, really deploying business cases that are useful for those companies. Because if we are just going to do ‘my products’ to ‘my customer’, it is not going to work. If you look at the top 2000 companies at the moment, they’re all platform companies.”
In addition to this, it is very important to ensure that the right partnerships are formed to ensure greater collaboration and development to eventually enhance digital services that are consistently changing based on the general ecosystem.