Tuesday, June 9, 2015

Will 5G Move Value to Core Networks?

It might not be intuitive why fifth generation networks might be more important for the core network than the “mobile” network, or why 5G could be a step in the direction of further separating applications from access.

Alert readers will immediately grasp the business implications. To the extent 5G moves in the direction of “use any available access,” it essentially further makes all access networks commodities, including the mobile network.

So where is the value? The managed services and apps. The implications for mobile operators could not be clearer: value shifts to apps and managed services, and away from access.

In one sense, that is further deepening of an existing trend, namely the separation of access from apps that is the foundation of all Internet Protocol networks. When and if the day comes that IP itself is transcended as a protocol supporting the Internet, 5G might eventually be seen as a step along the way.

Oddly enough, IP has enabled a shift to “multi-purpose” networks, and away from “single purpose” networks, as once was the case. Where we once built networks specifically to support voice, TV, radio or satellite TV, we now mostly build IP networks that can deliver any sort of application.

If 5G develops as expected, with core networks virtualized, and able to support apps, devices and users across almost any network, one might argue that value will shift further into the core network and away from access.

Oddly enough, as important as mobility will remain, access will be a less important part of the “mobile” business. It will be the features of the core network that really drive value.

That is a huge change. Once upon a time, it was mobility itself that drove the value of the mobile network and its services. That will still be true. But we might be moving towards a network and a business, where mobility is simply a feature of core network apps, whether provided on a managed or third party basis.

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