You can’t monetize 5G until you understand what makes it different from 4G besides faster speeds – and overhaul your B/OSS, while you’re at it, writes Catherine Haslam.
5G is a technology – or more accurately a collection of technologies – not a service or a revenue stream. For 5G to live up to its hype and improve the bottom line for communications service providers (CSPs), technology must be turned into services, and services into revenue.
This requires major changes to operational and business support systems (OSS/BSS). Failing to modernize OSS/BSS could result in an immediate and negative impact on revenue, with up to 67% of potential revenue at risk.
However, the service requirements and the business models supporting many 5G use cases are new and unproven. Such lack of clarity makes it difficult for CSPs to identify and prioritize the changes, but they must do so.
It is important, therefore, that CSPs concentrate on adopting processes and architectural principles, such as automation and openness, which scale across use cases and leverage the features that make 5G different from its predecessors.
The promise of 5G
5G is different from previous generations of mobile technology. This is an often-made claim, one that is equally often followed by statements of technical prowess:
There is no doubt that these are indeed significant improvements and that such functionality can enhance users’ experiences, such as with online virtual reality gaming. New and improved use cases ranging from logistics to autonomous cars and digital health also are possible.
However, such functionality makes 5G better but not substantively different. After all, doing more, faster, better and for less, is what each previous generation of mobile technology has promised to deliver. Indeed, based on this alone, one could argue that the shift from circuit to packet data was far more transformative than moving from 4G to 5G.
It’s all about flexibility
5G’s headline-grabbing performance numbers are impressive, but that level of performance isn’t needed for many (perhaps most) applications. Experiences of sharing an image on Instagram or shopping online will not be noticeably improved by 5G working at its highest possible performance levels compared to 4G.
Neither do the applications that require the highest level of one technical parameter like throughput necessarily require a similarly high level of availability or extremely low latency. Being able to deliver on such a wide variety of requirements, concurrently and at scale is key.
The real promise of 5G is that it gives CSPs their first realistic opportunity to differentiate the service levels they deliver to different customers. It is transformative because of the flexibility it offers.
Can’t 4G do that?
Another common mantra, usually from cynical mobile industry commentators, is that there are no 5G use cases that couldn’t be delivered using 4G. Certainly, when one breaks down the extensive list of 5G use cases, those that can only work on 5G are few and relate to services that require high speeds, ultra-low latency and are ultra-reliable, such as remote surgery.
Indeed, CSPs could use 4G for many use cases – but they’re not, and here’s why:
- Delivering services with quality of service (QoS) guarantees can impact negatively on other services including core services
- QoS for specific services is hard to deliver, monitor and maintain, and service level agreements (SLAs) aren’t enforceable
- The cost base means services will be price-prohibitive
- There is no business case because it takes a huge amount of effort, particularly in building and modifying support systems, to deliver services for a specific use case; furthermore, the potential market for that use case is often unknown and limited.
As a technology, 4G can support many of the performance parameters needed for use cases associated with 5G. However, it cannot support multiples of them quickly and efficiently at the same time. That is what 5G must do. 5G radio access and core network technology supports this, but significant changes and developments in OSS and BSS are necessary to turn the promise into revenue-generating services.
This is an extract from the TM Forum report ‘5G monetization: Operational imperatives’. Click here to access the full report.
Written by Catherine Haslam, senior analyst at TM Forum | Original story posted at TM Forum Inform
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