How do we achieve revenues of $300 billion from 5G?

5G hype
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Operator billed revenues from 5G are set to hit $300 billion (38% of operators’ billed revenues) by 2025, according to a recent study by Juniper Research. This is clearly good news but most people, confused and baffled by the hype around 5G, will surely ask the question: yes, but how?

With 5G must come a change of mindset among operators. If you are looking for some good, practical advice and examples, you should download the new whitepaper from Openet, entitled ‘5G: from hype to reality’.

For a start, says Openet, there will be no ‘cutover’ to 5G. Migration will be the best approach and services must be launched to solve a specific problem. There will be many, many use cases, all of which will require different levels of security, latency and scalability. For a while, it will ‘fill in the gaps’. It will provide WiFi like connectivity where none existed. It will provide a ‘cable modem’ where there is no fibre. Existing 3G and 4G assets will need to be optimised in the context of 5G, not shelved. Backwards compatibility must not be ignored, but optimised.

Use cases will evolve as 5G becomes something that operators can just roll out. We do not know the ‘killer applications’ yet, just as we did not know that 4G would drive hugely successful services such as Netflix, Uber or Facebook to even greater success.

Even now, pre-5G, some operators are showing their colours. Turkcell, a company held up by many as a role model for forward thinking and innovation, is proving that virtualising its network allows it to leverage its new brand, Lifecell, and achieve measurable improvements in customer engagement.

5G will only make this approach easier. As the paper says, ‘open APIs and vendor agnosticism enable rapid integration of partners and true experimentation with new business models that were mostly dreamt about but seldom realised in 3G/4G environments’.

With video expected to account for over 75% of all mobile traffic by 2020 and with limited 5G coverage for some time, the strain on networks will intensify if operators wait for 5G to come to the rescue.

As we have said before, and recently, the 5G is not just about 5G. It is about agile, cloud based platforms that can deliver the scalability, vendor agnosticism, 3rd party products and open source that was a challenge for previous ‘Gs’. It is an ecosystem, technically, and will hopefully trigger an ecosystem approach culturally as well.

Consumption will change too. As the use cases demand flexibility, we will see charging for latency (or lack of it), availability, security and a portfolio of other parameters that we have been discussing for some time but haven’t yet realised. Payment options, too, will need to become more flexible, with hybrid models becoming much more acceptable.

5G will emerge over the next two to three years. It will start by filling in the gaps. Individual use cases will be the drivers. Ultimately, however, 5G, its ecosystem and supporting (3G/4G/WiFi) technologies will enable vendor agnostic, 3rd party content in the ways that the industry has been dreaming of for some years.

To prepare for the new possibilities, while building the agile, cloud based platform, operators should be, as CEO Niall Norton says, ‘focused on transforming the business into a marketing business. I would be getting wholesale deals with the likes of GE and Caterpillar and whoever is cool and big in gaming. I would be looking at doing deals with Netflix and the like’.

5G is coming, slowly. There will be no ‘cutover’ but if all goes reasonably to plan, in a few years’ time many industries and arenas will look back and realise that it was worth the wait.

The paper, ‘5G: from hype to reality‘ is a practical, hype-free read, free and available to download now.

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