5G: The Coming Business Transformation

Peter Jarich

Peter Jarich – VP, Consumer Services and Service Provider Infrastructure

Summary Bullets:

  • The basic tenets of 5G are well understood: what we’ll use it for, when it will arrive, that it will be a major opportunity with a solid base of subscriptions within the next five years.
  • A number of other commonly held beliefs about 5G – that it will drive business innovation and core network transformations, introduce network slicing and represent a platform for spectrum innovation – must be questioned.

Last week, the Telecom Council of Silicon Valley convened a forum on “Network Transformation in 5G.” We had the honor of delivering the opening presentation. You can view a copy of it here.

The main message was simple – if not necessarily comfortable.

As we roll into 2018, we know the year ahead will see more 5G trials and some early commercial launches. It’s good, then, that there is a general consensus around some key 5G questions.

  • What Will We Use 5G For? The base use cases of enhanced mobile broadband, massive IoT and mission-critical communications have been elaborated over and over.
  • When Will 5G Finally Arrive? Early 5G deployments start next year, fueled by standards progress and – more importantly – operator imperatives driven by competitive pressures and showcase sporting events like the Winter Olympics in Pyeongchang, South Korea in February and the FIFA World Cup in Russia over the summer.
  • How Big Will 5G Be? While nobody can say for certain, it’s likely to amass a solid set of users within five years, though clearly 5G will co-exist alongside LTE in most markets for years to come.

Unfortunately, there also seems to be consensus around some 5G uncertainties. For example:

  • Core Already Transforming: The core transformation projects and massive IoT deployments expected to be linked to 5G are already happening now.
  • Network Slicing Happening Now: Likewise, the same could be said for ‘5G network slicing.’ If slicing is about delivering network capabilities tuned to the needs of specific use cases, we already have that ability, to some degree, in the form of traffic prioritization.
  • Does Business Innovation Really Need 5G? 5G is often heralded as an important driver for new business innovation; for example Ericsson and Arthur D. Little forecast that operators can generate an additional 34% in revenue from 5G-enabled industry digitalization market opportunities by 2026. But, it seems like we’ve heard this same story told with previous generations of technologies and that much of the innovation on the business front could well proceed before 5G arrives.

Ultimately, the conclusion is a relatively simple one. Operators have not historically demonstrated an ability to evolve their businesses to fully leverage the possibilities enabled by new generations of wireless network technologies and capabilities. To execute on 5G’s potential, then, they need to embark on a process of business and technology experimentation – all of which they can do in the near term with LTE.

About Peter Jarich
Peter is Vice President for the Current Analysis Consumer and Infrastructure services. Peter and his analyst team monitor and evaluate activities in the markets for Consumer Services and Devices, Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and overall coverage of the Mobile Ecosystem.

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