On the face of it, 2019 has been a year of 5G progress. Countries like South Korea, the U.S. and Switzerland have created a global leadership position, signing up 5G subscribers on to 5G tariffs via 5G devices. Consumer services have been the obvious priority, with advanced mobile broadband (faster speeds, more capacity) as the use case. But all operators offering these services have resisted the temptation to charge a 5G premium for this improved connectivity, with most acknowledging this will come later. But how much later? And for what services?
#1: INFRASTRUCTURE AN INHIBITOR
The 5G operator use case is currently based on three categories: enhanced mobile broadband, ultra-reliable low latency communications and massive machine-type communications. Critically, enhanced mobile broadband, including fixed wireless access, can be delivered in a non-standalone 5G environment, falling back onto 4G. Both massive machine and low-latency communications will require dedicated standalone 5G networks to meet expectations. Why is this a big deal? Well because fully standalone 5G networks will take time to be fully deployed. Some countries will launch 5G sooner than others, but they’re unlikely to fully come to fruition next year.
Building new networks is tricky business and takes time. It was the same for 4G and will be the same again for 6G. But then there are new innovations and new competitive forces that will combine to add further pressure to operator 5G strategies.
#2: THE NEED FOR SPEED
The fact that operators aren’t charging a premium for 5G services currently does not mean they can’t in the future. The fixed broadband world has offered speed-based pricing for some time and it stands to reason that mobile operators will continue to follow suit. 5G enhanced mobile broadband does offer considerable improvements in network speeds and capacity and consumers are increasingly used to paying more for the best connectivity. Industry analyst group, CCS Insight, predicts that most 5G operators will move to speed-based pricing by 2021. This will be especially true of operators looking to offer converged mobile broadband and fixed wireless access connectivity in a 5G age.
What is perhaps more significant however, is where this initial tariffing innovation will lead, especially with the promise of ultra-low latency communications on the horizon - targeting both consumers and enterprise users.
#3: ULTRA-LOW, ULTRA-LUCRATIVE
Ultra-reliable, ultra-low latency communications is where much of the 5G excitement lies. It also has the widest potential for operator monetisation and overall 5G ROI. The ability to deliver on its promise requires careful planning and significant technology innovation, but also has significant revenue generating opportunity. Early consumer use cases for low latency communications are focused on virtual reality and the gaming world. Operators will have the opportunity to create specific plans offering an uninterruptable gaming experience, in a global multiplayer environment. These types of bundles will help operators target younger demographics and really develop more digital, cutting-edge brands - a key ambition for most going through digital transformation projects.
While the consumer low-latency offer will be important, it will be dwarfed by the potential for enterprise services. The expected introduction of network slicing will create vast dedicated performance-guaranteed virtual networks which operators can offer exclusively to enterprises. Interestingly, CCS Insight believes this capability will be of particular interest to broadcast and media companies, in fact by 2023, they will start taking up network slices to radically change the feasibility and affordability of live broadcasting - especially with sports and other live events.
#4: MASSIVE MACHINE: WILL ENTERPRISES GO ROGUE?
And as for massive machine communications, how many global enterprises will be content to wait for operators to deploy 5G and how many might take it on themselves to bid for their own spectrum to power their own IoT advancements? We have seen some examples of enterprises deploying private networks in partnership with operators
to drive productivity and efficiency. But what about enterprises that look to unlicensed 5G spectrum and deploy private networks without operator involvement? Given the number of global digital power brands, it is only a matter of time before this happens, and should urge operators to move faster, to maintain some control of the massive machine opportunity.
So, in summary, for the most part 2020 will see a continuation of global 5G network deployment. For early adopters, this will see an acceleration towards standalone 5G, for the followers, non-standalone. Regardless of approach, operators will be under pressure to on-board 5G subscribers as quickly as possible. The next twelve months will be about operators shifting the consumer perception of 5G from being a benefit to a reason to upgrade and pay more. This will involve most operator marketing departments hedging their bets to convince consumers that anything and everything will be possible with 5G as they reinforce their digital brands. From a service creation and monetisation perspective, operators will be forced ensure they have the flexibility and agility to react to every new opportunity - consumer or enterprise, or emanating from enhanced mobile broadband, fixed wireless access, massive machine or low latency communications. The operators that succeed will be those that react the fastest. Let’s see what happens.
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