Management consultancy Arthur D. Little (ADL) has identified five rollout models in a recent report.
“Each model addresses a distinct opportunity and leverages a particular infrastructure advantage of the telecom operator.”
The five models are:
- To provide gigabit broadband to residential homes and act as an effective last-mile complement to fiber or cable networks.
- To deliver a next-generation, nationwide mobile experience enabling new use cases and applications, driven by virtual reality, tactile internet, etc.
- To deliver highly reliable, low latency connectivity and solutions to corporates improving both efficiency and productivity.
- To develop digital industrial ecosystems with machine-to-machine (M2M) connectivity, enabling new service ecosystems with multiple partners, providers and end users.
- To deliver next-generation infrastructure-as-a-service (IaaS) for entire countries.
This table highlights the benefits of these models in more detail:
Based on their chosen deployment option, ADL found that operators addressed initial customer segments with specific 5G rollout plans, choosing:
- Different geographical rollout approaches – such as suburban homes;
- To build specific capabilities – like rolling out hundreds of thousands of small cells;
- To offer features that are segment specific – immersive sports viewing at home for example;
- To partner with new stakeholders – collaborating with sports content producers;
- To leverage new network functionalities – for example, heterogeneous networks;
- New spectrum technologies – such as millimeter wavelength with beamforming solutions; and
- To enable new business models – like addressing customers based on partnerships between the telco and Olympic stadiums.
“The choices made must be consistent with the 5G deployment model being pursued.”
Big bang and evolution
The report asserted that operators could take two approaches to prepare for future 5G: A big-bang approach, investing heavily in future 5G technologies and undertaking multiple activities simultaneously; or, an evolutionary approach, moving from 4G to 4.5G to 5G sequentially.
“A big-bang approach could give telecom operators a headstart on competition, enabling them to offer gigabit speeds with millisecond latency and next-generation services with network slicing.
“An evolutionary approach spreads out investment into multiple buckets over multiple years, but eventually also takes the telco closer to 5G. In both cases, telecom operators should place themselves in the driver’s seat to shape the future market.”
Risks and rewards
Some operators were taking a strategic lead in 5G deployment, announcing their plans with ‘big bets’ on new 5G technologies which will impact how it is rolled out and develops.
Although there are many risks in adopting new 5G technologies – they involve new investments while clarity around the technology, performance, regulatory and customer demand is still materializing – the potential for success is high. This potential is driven not just by possible differentiation and market share gains, but also by rolling out successful use cases, and being pioneers and trusted partners in the building of new ecosystems.
The consultancy does, however, caution that telcos should anticipate the needs of new ecosystems in traditional industries such as automotive, and move quickly to play a bigger role.
“With so many new players entering the 5G market, 5G may be more fragmented than expected.”
Chopping and changing
The five models described above are only a starting point for an operator planning to move towards 5G says ADL. An operator might start with one model, then expand to, or use a combination of other models. What’s more, in the future, non-telco IoT players such as Google, Apple and Amazon might try to jump on the 5G bandwagon. Hence, ADL pushes the importance of operators and vendors playing an active role in driving the 5G standardizations in the right direction.
“At this point it is hard to predict which 5G rollout model will be most common. However, one thing is certain: 5G will be the stepping stone for some telecom operators to move from being providers of communications, to enablers of solutions and future ecosystems.”