But MNOs may not always be best placed to build specialized networks to support cities, enterprises and the Internet of Things. Many acknowledge they are struggling to work out the business case, and some industries would rather work with service providers focused on their own sectors, which could, in turn, help with bearing the cost of rolling out networks with demanding capabilities.
Some of the key elements of 5G – such as a greater focus on very dense, localized, edge-oriented networks, potentially deployed in shared spectrum – offer the wherewithal to support those specialist vertical service providers, and new entrants such as neutral hosts or city integrators.
Some of the hopes for an open platform – one that might enable a wide range of suppliers and service providers – were aired in the early days of 4G, but were mainly dashed. Large operators continued to win expensive, long-term exclusive licences which precluded new entrants. Disruptors and new providers either had to secure massive financial backing – as Reliance Jio did in India – or rely on unlicensed spectrum technologies like WiFi and LoRa, which do not support all of the high-reliability, high-security, high-mobility aspects of 4G and 5G.
The first prerequisite of 5G being an enabler of new entrants is that regulators support a more creative approach to spectrum licensing, and that MNOs recognize that this could present them with opportunities as well as competitive risks. In the higher bands, from 3.5 GHz to millimetre wave, there will enough spectrum to go around more players, and these airwaves are well suited to supporting local or vertically specific networks – dense, high-capacity zones for a city or business park perhaps; or specifically optimized systems for a particular enterprise, vertical or transport route.
Some operators are starting to consider the upsides of sharing the risks and costs, and not just the rewards. In a recent survey about 5G intentions conducted among 60 large MNOs, by Rethink Technology Research, about 15% said they would favour a model in which they would take responsibility for the nationwide mobile broadband network and specialist companies would shoulder the burden of building networks for specific industries.
After all, most MNOs have failed to find a convincing case for delivering critical enterprise services directly in the past. Instead, they may look to support an expanded wholesale model, in which they take revenue from wide area roaming (via MVNO deals with the specialists) and from providing higher-layer services, from cloud-based device management and security assurance to full network-as-a-service or network slicing platforms.
To be sure, 15% is a small percentage and most MNOs believe that the expanded, dynamic wholesale model – enabled by shared spectrum, cloud platforms and slicing – is too complex or futuristic to model. But the indication that some progressive MNOs are accepting their own limitations in terms of vertical and local services is encouraging.
The next step will be to convince spectrum regulators. However, as this article points out, some regulators are proving more adventurous and forward-looking than others.