As 2019 draws to a close, the telecoms industry enters prediction season with some notable names already declaring what they think will happen in 2020 and beyond. On the face of it, 2019 has been a year of 5G progress. Countries like South Korea, the U.S. and Switzerland have created a global leadership position, signing up 5G subscribers on 5G tariffs via 5G devices.
Consumer services have been the obvious priority, with “fast 4G” i.e. advanced mobile broadband (faster speeds, more capacity) as the most obvious common use case. But most operators offering these services have resisted the temptation, or been unable, to charge a 5G premium for this improved connectivity.
There are other use cases in certain regions, including fibre connectivity replacement using 5G hubs, but these are mostly experimental for now as operators experiment with what 5G can and cannot do well. These early use cases do point to more innovative connectivity services and more tailored offerings to come, with most operators acknowledging these will come later. But how much later? And for what services?
5G AND THE NEED FOR SPEED
The fact that operators aren’t charging a premium for 5G services currently does not mean they can’t in the future. The fixed broadband world has offered speed-based pricing for some time and it stands to reason that mobile operators will continue to follow suit. 5G enhanced mobile broadband does offer considerable improvements in network speeds and capacity and consumers are increasingly used to paying more for the best connectivity. Industry analyst group, CCS Insight, predicts that most 5G operators will move to speed-based pricing by 2021. This will be especially true for operators looking to offer converged mobile broadband and fixed wireless access connectivity in a 5G age.
What is perhaps more significant however, is where this initial tariffing innovation will lead, especially with the promise of ultra-low latency communications on the horizon – targeting both consumers and enterprise users.
What is exciting to think about is that future service offers may combine both 5G capabilities with a more digital customer experience – for example when fixed broadband can be substituted or augmented by 5G connectivity, and the customer can “tune” the bandwidth and service levels in real time via an App or web-portal. Self-service like this would be attractive, convenient and much lower cost than such offers would be capable of delivering.
ULTRA-RELIABLE, ULTRA-LOW: ULTRA-LUCRATIVE
Ultra-reliable, ultra-low latency communications is where much of the 5G excitement lies. It also has the widest potential for operator monetisation and overall 5G ROI. The ability to deliver on its promise requires careful planning and significant technology innovation, but also has significant revenue generating opportunity.
Early consumer use cases for low latency communications are focused on things like virtual reality and the gaming world, but in reality, extend to a multiplicity of areas that can be innovated. Jack Ma once famously quipped that “opportunity lies where the complaints are” – and ultra-reliable, ultra-low latency connectivity promises to allow a lot of complaints to be addressed. For example in gaming or any community based activities, operators will have the opportunity to create specific plans offering an uninterruptable gaming experience, in a global multiplayer environment. These types of bundles will help operators target specific demographics and really develop more digital, cutting-edge brands – a key ambition for most going through digital transformation projects.
While the consumer low-latency offer will be important, it will be dwarfed by the potential for enterprise services. The expected introduction of network slicing will create vast dedicated performance-guaranteed virtual networks which operators can offer exclusively to enterprises. Interestingly, CCS Insight believes this capability will be of particular interest to broadcast and media companies, in fact by 2023, they will start taking up network slices to radically change the feasibility and affordability of live broadcasting – especially with sports and other live events.
Dedicated service slices capabilities with configurable service levels backed up by support systems that allow for real time flexibility, and automated orchestration of network functions and with profitable (i.e. cost optimised) services that will be transformational in terms of customer experience.
Up until 2020, the economics of new service launches on networks was such that only a small number of high ARPU services could ever be cost effectively considered by operators. Happily that will be a historical legacy of the industry soon. A great, innovative, time is upon us as we move into 2020.
MASSIVE MACHINE: WILL ENTERPRISES GO ROGUE?
With regards to massive machine communications, how many global enterprises will be content to wait for operators to deploy 5G and how many might take it on themselves to bid for their own spectrum to power their own IoT advancements? Or how many will choose a middle ground – whereby they push to have a private cellular network that is enabled by the operator but managed by themselves? We have seen some examples of enterprises deploying private networks in partnership with operators to drive productivity and efficiency, and enhanced security. But what about enterprises that look to unlicensed 5G spectrum and deploy private networks without operator involvement? Given the number of global digital power brands, it is only a matter of time before this happens, and should urge operators to move faster, to maintain some control of the massive machine opportunity.
In summary, for the most part 2020 will see a continuation of global 5G radio network deployment. For early adopters, this will see an acceleration towards standalone 5G with the great features that that brings, for the followers, non-standalone 5G backed onto 4G support systems which really will allow for fast broadband and only limited innovation. For the latter group, 2021 will be the time for pure 5G capabilities.
Regardless of approach, operators will be under pressure to on-board 5G subscribers as quickly as possible. The next twelve months will be about operators shifting the consumer perception of 5G from being a benefit to a reason to upgrade and pay more (cheerfully supported by the mobile device manufacturers!).
This will involve most operator marketing departments hedging their bets to convince consumers that anything and everything will be possible with 5G as they reinforce their digital brands. From a service creation and monetisation perspective, operators will be forced ensure they have the flexibility and agility to react to every new opportunity – consumer or enterprise, or emanating from enhanced mobile broadband, fixed wireless access, massive machine or low latency communications.
The operators that succeed will be those that react the fastest and have the supporting real-time software architectures and processes in place.
Niall Norton, CEO, Openet