Wireless networks have truly become an embedded part of our culture. In both our business and personal lives, mobile devices and networks have become part of the way do things – just about everything. So, when a new generation of wireless technology comes along, it naturally brings about a new hype cycle and the promise of a new wave of innovative services, devices, applications – and of course revenue. The anticipated emergence of 5G as the next evolution of wireless networks is no different.
The most obvious signs that 5G is coming came when phone makers started announcing their 5G-capable devices, with global market share leader Samsung launching its first 5G phones more than a year ago, with its second generation announced earlier this year.
It’s also hard to miss the 5G commercials from the major wireless carriers, who are all touting their networks as the best in 5G. But, are we really there yet? Gunter Reiss, vice president of worldwide marketing at A10 Networks says not really and that we’re still years away from reaching 4G-comparable coverage with 5G.
“In the United States, I would think we will see 5G coverage in the largest cities within the next 3-4 years because it’s essential to the applications the operators want to monetize,” he says. “Korean and China are on the same path – maybe even 2-3 years for the largest cities – but Germany, for instance, could take as long as eight years.”
Why so long? Certainly, any new network buildout takes time and requires significant investment in time and resources. In fact, those are some of the biggest immediate challenges to rolling out 5G according to respondents to a recent survey on the state of 5G from A10 Networks (conducted by BPI Network). The top three include:
It’s certainly not surprising that security is near the top of the list of challenges (only barely behind cost), as 97% of operators also believe 5G will increase security needs on their networks due to increased traffic, more connected devices, and, in particular, the growth potential of IoT in a 5G world. In fact, only network reach is rated by more operators as being a “very important” concern, which reflects the cost challenges.
Part of the question is whether operators are pursuing a standalone 5G strategy, or are piggybacking on their existing 4G core infrastructure for non-standalone (NSA) deployments. Leveraging existing infrastructure saves on costs and time, but comes with its drawbacks. Most importantly, the low latency needed for some of the real-time applications 5G is poised to drive isn’t possible without standalone (SA) infrastructure.
“With a hybrid 4G/5G environment, you can’t provide an SLA of only a few milliseconds of latency, which is really the holy grail, grail,” said Reiss. “Autonomous vehicles, smart city applications, new healthcare applications, for instance, fit into this realm of real-time application environments.”
There’s a wide disparity in approaches from operators when it comes to standalone 5G, which helps explain the extended outlook for widespread 5G rollout.
Those that are initially going straight to standalone 5G, or at least proactively planning for its addition, the path to revenue may be longer, but their standalone infrastructure should position them well to make up ground quickly. On the other hand, those that aren’t yet preparing for standalone networks, may find themselves struggling to meet the needs of enterprise customers, which will be one of the key 5G revenue opportunities.
“In the past, 90% of 4G revenue came from mobile broadband users,” explained Reiss. “That will shift and the enterprise opportunity is definitely very large. It’s not just an extension of 4G because of the new applications and use case 5G will drive.”
A major piece of the 5G model will include mobile edge cloud, which will not only help solve latency problems, but will drive partnerships between operators and cloud providers. We’re already seeing the relationships starting, with AT&T and Verizon both working with Microsoft, AWS, as well as IBM for 5G. Nearly every survey respondent (99%) thinks mobile edge cloud will be key to delivering on the promise of 5G, and 35% think they’ll be implementing mobile edge by the end of the year.
“The battle for the edge is ultimately what this is,” said Reiss. “To achieve the latency we need for communications, it’s not just about a 5G standalone network – it’s the combination of public cloud and mobile cloud that operators are building.”
It’s an opportunity to get close to the end user but, more importantly, it’s where operators will be able to target the enterprise. Businesses are already using AWS or Azure or Google Cloud, so the relationships between carriers and cloud providers create a natural entry point into the enterprise for carriers as services move to the network edge. If they were to mount a mobile edge compute platform on each base station they operate, providers will have massive new reach into the enterprise space.
In addition to smart cities, manufacturing, healthcare, and other industries that are likely to benefit from 5G rollouts immediately, there is, of course, another major factor – the massive increase in remote working. Most people believe COVID-19 has changed workplaces forever, and we’ll see much greater remote working on a permanent basis, which will drive a greater need for wireless access in rural areas to support remote technologies. While the survey was conducted pre-COVID, additional interactions with respondents point to this as an additional driver that doesn’t come across in the data.
“The workplace will change forever and we will see even more work from home environments, and 5G can be a big enabler, including fixed wireless for rural areas and even some cities,” Reiss noted. “We will see more investment and adoption in the space.”
It’s clear that 5G will have a role in the consumer market. It’s no secret that mobile usage has increased, and people are consuming more content on their mobile devices than ever. For many, linear TV is a thing of the past, with the streaming options that are now available. But, that’s just a microcosm of the future of 5G, as deployment increases and innovation around new applications and services continues to drive revenue models. The enterprise space is really where the revenue growth will come, as 5G will drive applications and services in so many markets, including healthcare, financial, manufacturing, smart homes and buildings, smart cities, entertainment and gaming, autonomous vehicles and other in-car technology, and more.
With most operators believing that 5G progress is on schedule, based on expectations, we’re on the verge of a new era of wireless connectivity that will bring new capabilities to existing applications and make way for a host of new, innovative services – and new revenue streams. These new apps and services are already being created in incubators launched by various operators.
“You will see developer communities taking advantage across the board,” concluded Reiss. “5G is the holy grail of low latency, even more than the bandwidth and speed. That’s what will allow these new applications.”
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