5G is All About the "Next Big Thing"

The hottest buzzword in telecommunications in 2017 is 5G. And a relative handful of service providers are racing to be first to deploy, for reasons that sometimes are not so obvious.  

First mover advantage is why “speed” (time to market) is driving mobile operators in the United States, South Korea, Japan and China.

“Getting to market first with LTE gave North American first-mover operators an extra 6.6 billion U.S. dollars in revenue over the second mover within five years,” says Amit Mukhopadhyay, partner at Nokia’s Bell Labs Consulting. “The same will be true with 5G, if not more so.”

What sometimes is less clear are the business motivations for 5G deployment, beyond the breathy slideware that has routinely been produced in advance of 3G and 4G, and now 5G. It is always, one way or the other, about “the next big thing.”

That might really the case this time, for some glaring reasons. Most significantly, all existing mobile revenue streams are either declining or about to decline. So the next leg of industry growth has to come from something other than voice, text messaging, mobile data or even video services, as important as that latter source is shaping up to be.

The problem is not especially new. After voice, text messaging drove revenue growth. Then mobile internet access came to the fore. Video subscriptions might help next, perhaps more on the scale of text messaging than mobile internet access.

But as the core voice and mobile data revenue streams drop away, the industry will have huge holes to fill, and there is universal belief that those big new revenue sources are going to come--broadly speaking--from selling services for use by machines, not humans.

Not for the first time, but with new urgency, the business model is key, not the network. As was the case for 3G, then 4G, the valuable new applications driving revenue growth had to be discovered. They were not obvious. The same will be true with 5G, with the new twist that it is applications and services for machines (sensors and servers) that will likely be key.

“With 5G, it is all about the use cases and your business strategy,” says Claudio Mattiello, Nokia network planning and optimization service product Manager,

 

There are other noteworthy changes. For the first time, the core networks themselves must be transformed to support the expected 5G end user applications.

“Network elements that are implemented in the telco cloud environment must enable the key concept of network slicing, in which services can be configured to different needs using the same underlying infrastructure,” says Ashok Rudrapatna, Bell Labs Consulting principal consultant.

All of that will be subject of the Spectrum Futures conference, to be held 18/19 September in Bangkok.