5G: solving all the CTO’s problems?

18 Jan

 

Just weeks after the 3GPP kicked off its initial work on 5G standards, we are already hearing talk about ‘pre-5G’ or ‘proto-5G’ deployments; a second wave of standards (before the first has been defined); and forecasts for subscriber numbers (150 million in the first year, apparently). All this is terribly familiar – just as in 4G, there is a barrage of hype and false expectations, which will be followed by a cold reckoning, when mobile operators realize that they have no clear idea how to turn all those shiny new technologies into profits.

This time, however, operators’ shareholders and economic situation will not allow them to indulge in the spectrum frenzy of 3G or the architectural clean break of 4G. There will have to be a complete rethink of the costs and the return on investment before significant 5G deployments can start, otherwise there is little prospect of the new networks solving the CTO’s problems.

Those problems are varied and complex, but most are rooted in the fact that mobile broadband traffic is exploding, and while the cost per megabyte is falling, the price users are willing to pay for that megabyte is falling more steeply still. Increasingly, network upgrades are about clinging on to customers, not boosting margins. If 5G is to have any real value for the operator, it must accomplish two core objectives – reduce the cost of delivery by a far greater amount than 4G has done, and support brand new revenue and profit models, which can justify network investments. These use cases will vary for each operator, and some are not yet visible, so as well as supporting ubiquitous coverage and dense capacity at low cost, 5G will need to be infinitely flexible.

Dense, ubiquitous, software-driven, flexible – this will be an extremely hard combination to achieve, and it will be accomplished not just by core standards, but by the way that 5G is planned and managed. The network will need to be optimized and automated in real time, and constantly recalibrated to meet changing traffic patterns or applications. That will go a lot further to easing the CTO’s headaches than any step change in the air interface – and will become even more crucial as mobile networks become increasingly virtualized.

Virtualization and software-defined networking will improve mobile economics and broaden the addressable applications, but these are standards which are coming from the IT world, not from the traditional mobile arena. The CTO will increasingly be an IT as well as a telecoms executive, and the way that intelligence from the network is harnessed by IT systems, especially big data analytics, will be critical to the success of 5G.

The prospect of deploying a dense, ubiquitous, software-driven network, with rich links to IT platforms and extreme responsiveness, may sound like an even greater nightmare for the CTO. But without it, the operator will be unable to take advantage of the genuine new opportunities that lie ahead – particularly in some of the emerging Internet of Things markets – and will be stuck forever with a failing smartphone data business model.

The IoT will be extremely diverse and not all its needs will be met by cellular – indeed, its unifying technology will not be the access network, but the IT platforms which coordinate all the moving parts via a holistic view of each customer and service.

This is just the most extreme example of how MNOs will fail if they regard 5G merely as a new network architecture, however modern and virtualized. To turn that architecture into new services and new revenues, it must be planned and managed in a ‘5G’ way also. 5G is a business model transformation for telcos rather than a technological one and so much of the ROI will come from the systems that manage and control service delivery and customer relationships, even when that customer may be a machine. There is a viable business case for the 5G mobile network operator, but it means making some dramatic changes in thinking as well as in networks.

Find out more. Download the ‘Why 5G won’t be enough’ analyst opinion paper.

Source: http://blogs.amdocs.com/network/2016/01/17/5g-solving-all-the-ctos-problems/#.Vpy3FirhC70

3GPP

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