North American and Asian operators were especially keen to lead in 2018 with announcements of new 5G devices and deployments. The industry race to be “first with 5G” is perhaps a bit less relevant to some consumers than it was with 4G. More significantly, perhaps for industry participants, 2018 represented 5G proof in the areas of 5G broadband (eMBB) or access (FWA) with pockets of 5G-driven IoT advancement such as in Korea, where operators have already used 5G to deploy various auto-industry use cases for manufacturing as well as for autonomous vehicles.
These use cases may not rock the consumer world, although they may be providing some new revenue streams. The richer 5G ecosystem provides a plethora of additional capability, including efficient IoT and network slicing not to mention more ad-hoc 3rd party partnering but risks being misunderstood by consumers amid the industry scramble simply to be “first”. Savvy operators will do well to continue to ensure fuller understanding of what 5G really provides for consumers as well as enterprises in terms of benefits relating to latency, speed, coverage, capacity, density and devices. At the recent CES event in the US, it was encouraging to see Verizon continue to take a broad approach to explaining 5G as a lot more than “another G”. 5G is no longer just about what the industry thinks. It’s about what the public and enterprises of all sizes think.
With all the industry talk of 3GPP standards and “functions” it’s also easy to forget that there are huge variations in local market dynamics that will determine both the speed of service rollouts and specific service offerings that the richer network tapestry enables. 5G will not entirely replace 4G for quite some time. Nor is 5G a “one size fits all”. What’s good for one operator, may not suit another. Choosing which services to prioritise and differentiate with amongst the plethora of potential options will be determined by a combination of: i) available spectrum ii) competitive environment iii) earlier service commitments iv) device availability and v) broader partnerships – such as AT&T’s partnership with gaming brand Nvidia.
Upgrading the radio network is just the beginning of 5G, albeit an important one. 5G represents an opportunity to make a break from some harsh lessons of the past. Extreme flexibility in the form of “decoupling” is a key difference from 4G. Hardware has become truly decoupled from cloud-based software, and the core is decoupled from whatever licensed or unlicensed radio becomes available. The smarter core, as opposed to new radio, may just be where truer differentiation lies in 2019. The ability to more flexibly control and charge (as opposed to hacking quick fixes) for rapidly evolving services becomes more critical than ever.
Juniper Research (November 2018) expects that 5G service revenues will make up 38pc of total operator billed revenues by 2025 or about $300 billion. Clearly there will be winners and losers. If 2018 was about “proof of life”, the next phase will be about differentiation and control. 2019 will surely be a critical stage in that story.
For more on 5G in 2019, download our latest whitepaper 5G: From hype to reality