5G is on the horizon but the drivers to deploy it are still far from clear across the operator community. There is no single compelling motivation that applies to the majority of operators. The rise in mobile data consumption could be addressed, for some years to come at least, with continued enhancement of LTE networks and investment in virtualised platforms – especially as, in most developed markets, growth in mobile data usage is moderating.
So why are so many operators promising to launch 5G services in 2020 or earlier? Even the large vendors have admitted they have been caught off-guard by the accelerated pace of initial roll-outs.
The intense discussions surrounding the apparent rapid progress of a few flagship mobile operators risks blinding us to the caution, which will characterise the early years of 5G for most MNOs.
Even the frontrunners in China, the USA, South Korea and Japan are vocal in their insistence that deployments will be business case driven. Not on a ‘build and they will come’ basis.
One of the drivers to deploy 5G most commonly cited by operators is the migration to a software-driven, efficient network that will cost less to roll out and operate than current systems. Virtualisation and automation can be introduced without 5G, but many operators believe it will be easier to implement these radical architectures in tandem with a new radio network – especially when it comes to virtualising the Radio Access Network (RAN).
However, Real Wireless strongly believes that reducing the cost of delivering mobile data is certainly an important driver, it will not be adequate to make the case on its own.
For the early stage roll-outs the drivers are often in the ‘push’ category. Operators may be pushed to embark on 5G by their governments – to support socio-economic objectives or for national pride. They may be pushed by shareholders, or by fear of being left behind, in the marketing wars, by competitors.
We believe it will take some ‘pull’ drivers to encourage most operators to scale up their 5G especially when they remember that, with 4G, any first mover advantage enjoyed by early adopters, such as the opportunity to charge more for 4G, was limited and quickly lost. Instead, operators are looking for proven demand for 5G-enabled services from one or more user bases – whether existing customers or potential new ones – and demand that can be turned into new revenues.
Meanwhile users will continue to embrace better quality video and new experiences enabled by augmented reality or artificial intelligence. These can certainly be enabled by 5G, but how far can they be monetised by the MNO, in the age of unlimited data plans?
The 5G business case relies heavily on being able to support brand new use cases and user bases, most of them in the enterprise, verticals and Internet of Things (IoT). Because 5G has been designed from the outset to support many different capabilities, such as very low latency and very high device density, it should be able to support a wide range of applications that cannot be enabled by 4G. Some new applications will certainly emerge in response to the availability of 5G and the ‘art of the possible’ becoming visible.
As the 5G era begins, it is likely to be characterised by a greater diversity of operators. This will be enabled by several trends, such as:
- The emergence of shared and dynamic spectrum allocation for 5G
- The emergence of self-contained, virtualised local RAN and core
- Flexible, on-demand wholesale platforms supported by network slicing
We will be addressing the implications of these trends and more in a 5G white paper being published later this month. To ensure you receive it first, sign up for Real Wireless alerts here>>