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UK operators need to see progress on 5G business cases

  • 4 minute read
  • Published by Managing Consultant Dr. Abhaya Sumanasena on 27 Mar 2018
  • Last modified 11 Jun 2018
Much of the early conversation around 5G concerned its ability to support brand new use cases, generating new revenue streams for operators and new services for consumers and businesses. As UK roll-outs of 5G come closer, however, is the ecosystem ready to support these new services?

The standards have certainly been defined with more than conventional mobile broadband (MBB) in mind, targeted at the famous triangle of use case categories (enhanced MBB, massive machine-type communications, ultra-reliable low latency communications). Some of the technology which will drive those capabilities to the limit will not appear until next year’s 3GPP Release 16 standards, but even so, 5G is able to go further than LTE in supporting many applications for enterprise and Internet of Things (IoT).

However, the closer the auctions and deployments come, the more regulators and operators round the world, including the UK, are talking mainly about the traditional use cases and spectrum allocations. Boosting MBB speeds and quality of service, in exclusively licensed spectrum, are the first priority. Few operators are talking about near term deployment of mission critical or massive IoT services, let alone more visionary approaches like network slicing.

It appears that more work needs to be done to convince operators of the business case for the new services. The true costs, and potential savings, of new architectures like 5G Cloud-RAN or a sliceable network are not fully understood. And most operators want to address that aspect of the case first. Johan Wibergh, CTO of Vodafone, spoke for many of his peers when he told a conference in London that the 5G network must first be justified on efficiencies, before new use cases are considered.

He said: “If we don’t talk about when things will happen, you will get a message the audience won’t understand. If you talk about cost efficiencies and the things you can do in the first two years, you will get a more realistic scenario.” He is looking for about 10 times greater efficiency from 5G than LTE, but Vodafone is also testing over 40 different 5G use cases with a total of 21 partners.

But for 5G to justify itself, it is essential that the case for those new services is made convincingly and quickly. This work is becoming urgent as standards-based equipment looms on the horizon. Yet, “the business case for 5G still needs to be built,” said Gavin Patterson, CEO of BT, at the same November event.

Operators will, in the medium term at least, need 5G to support additional revenues. Certainly, they should not hope for higher ARPUs just because they have a faster 5G network – very few operators succeeded in charging a premium for 4G over 3G, for instance, and initially the chief benefits of LTE were to attract and retain customers with higher peak data rates, and deliver that data more cost-efficiently.

But the new capabilities of 5G will enable MNOs to target services which were tough to support effectively with 4G, especially those requiring low latency, as well as those which will be aided by the use of high frequency spectrum, such as fixed wireless. Just as importantly, these new-look networks will help governments achieve socio-economic advantages, such as those driven by smart cities, digital health or smart transport initiatives.

This is why projects to define and quantify the business case for the new services are so valuable. They should bring together representatives from many vertical industries, as well as the technology community, to map 5G capabilities onto real commercial, social and economic rewards.

A good example is Project MoNArch, financed under Phase II of the European Commission-backed 5G Infrastructure Public Private Partnership (5G-PPP). This includes 14 industrial and academic partners who will study the implementation of a set of 5G use cases in real world testbeds. Such activities are vital to provide insights into how 5G and network slicing will support new business models in real life, and help inject confidence into operators’ commercial planning. Coordinated by Nokia, MoNArch includes Real Wireless, which also provided modelling for its predecessor, Project Norma - a Europe-wide project looking at developing a virtualised, flexible 5G network architecture to support network slicing.

Such projects will be critical to address the uncertainties which UK operators, as highlighted by Patterson, face in making their 5G cases. Unless new certainty and confidence is built around 5G services, the impact on the mobile business, and on the broader UK economy, risks being delayed or diluted.

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