The why of 5G
February 2, 2022 - David McGlew
The real transformational benefits of 5G, revenue potential and new operational models which 5G can unlock.
We’ve been involved in Telecoms.com annual survey for a few years now and it gives us a good read on where our customers and the industry are at on the particular issues of the day, so to speak. 5G has being been an ever-present topic of discussion over the last few years. Early topics which drove many column inches, was speculation on what the killer use cases would be, quickly followed by how would CSPs monetises their 5G network. In some quarters there are still some who seem unsure about the ‘why of 5G’ as this year’s survey tells us.
As telecom operators are working hard at transforming their network capabilities, most are prioritising the fast rollout of 5G networks. Momentum is gathering as operators plan and implement 5G SA (Standalone) which will realise the real transformational benefits of 5G. In this year’s survey, we get a feel for some of the key drivers for adopting 5G and their progress on this journey. A third of respondents cited ‘to keep pace with competitors’ as a key reason for launching 5G. This hints at some not having yet realised the revenue potential and new operational models which 5G can unlock. This could be down to the difference between 5G NSA (Non-Standalone) and 5G SA (Standalone) but either way it’s a bit worrying.
If we take these elements separately, revenue potential – without an obvious consumer ‘killer use case’ CSPs are looking to the enterprise market and many are focused on 3rd Party partnerships as a key commercial strategy. 5G SA with its new network functions is a critical enabler of these partnerships. 20% of respondents cited the need to lay the groundwork for B2B and new commercial models to work with 3rd party enterprises as one of the biggest drivers for transforming the network to 5G. The most expedient route-to-value for 5G is to monetise partnerships more effectively through network exposure and embedding 5G network analytics to drive automation, enabled by new 5G functions, NEF and NWDAF respectively.
When it comes to new operations models, we don’t have to look far to see that the move to cloud is the single biggest influence here. 5G SA is really a cloud native story and any of the benefits which cloud brings is at the heart of these new operating models. The move to microservices based software solutions in the BSS and OSS space has been ongoing for the last couple of years. However, the cloudification of the network itself is something that is now developing at pace. Transitioning to a cloud native strategy and enabling a telco cloud environment comes with opportunities and challenges. We coined the phrase ‘cloudonomics’ last year and it refers to the business value of cloud computing. For CSPs, the cloud holds enormous transformational and revenue opportunities, meaning Cloudonomics is set to become a key factor for business growth. CSPs can leverage the flexibility and scalability of the cloud to drive efficiencies and create new services previously not possible. For example, flexible scaling up of compute and store resources for peak busy times for specific services and applications and then scaling down in quiet times brings obvious commercial benefits. Closed loop automation enabled by AI/ML coupled with new functions like NWDAF will enable services which rely on QoS low latency elements. The flip side of these opportunities does present some challenges. One such challenge is cited in the annual survey and highlights concerns over security on the public cloud. This is understandable and will required a concerted effort across the industry before this concern will be laid to rest.
In practical terms, the telcos’ position as the primary providers of connectivity is unlikely to change any time soon. But the network world is changing, and the CSPs must find a way to deliver more value beyond the basic connectivity pipe and start generating new revenue streams. The means to do that lies in the CSPs new key asset: the 5G network, and in leveraging the flexibility and scalability of the cloud.