- The challenge now is to make the leap from trials to commercial provision
- Operators will encourage higher-value 5G customers to purchase unlimited rates
- 5G wireless connectivity is unbeatable for certain outdoor services
The extension of 5G in mobile communications is a reality. With the deployment last year of the first fully 5G radio networks (stand-alone in English, that is, not dependent on the signaling associated with 4G or tributaries of the lower frequency of this latest technology, which offers lower bandwidth), the Users, particularly business users, are being able to see what makes 5G really different compared to the previous generation of mobile communications.
When the International Telecommunications Union, the body in charge of delimiting the characteristics of a technology in this area, defined in June 2015 a vision and a roadmap for 5G through the IMT-2020 document, it identified certain capabilities or attributes that would allow the Future radio technology to support certain “usage scenarios”, specifically three, which have become known by their acronym in English and which came to be called Enhanced Broadband (“eMBB”), Maximum Reliability Low Latency Communications (URLLC) and mass communications for machines (mMTC).
The main performance indicators associated with these capacities generally represent a theoretical evolution order several times higher than the 4G standard. Thus, the maximum download speed goes from 1.5 Gbps to 20Gbps, the latency or delay, that is, the time it takes for a “packet” of data to travel in the radio access network goes from 10 milliseconds to 1 millisecond and the maximum number of connected devices in an area of 1 square kilometer can reach a million, while the equivalent metric of 4G barely exceeds 60,000, with an exponential densification of communications that we still have trouble seeing.
The experiences of the 123 use cases of the 10 5G pilot projects promoted by Red.es and financed by the ERDF, many of them still under development throughout 2022, nevertheless allow us to anticipate that these returns are required by the functionalities associated with the remote management of devices in public or private environments or by the multiplication of data traffic associated with new habits of mobile phone use, which among other things in recent times has been assuming a growing proportion of video viewing , in 5G associated with improved broadband -particularly in means of collective land transport- to which I have referred before.
The challenge will soon be to make the leap from testing to commercial provision of services based on new technology. As for the general public market, operators have already assumed the migration to 5G within their mobile or integrated connectivity plans, with the probable intention of encouraging higher value customers in the medium term to contract unlimited rates, in a exercise of dispute of uncertain resolution quotas, it is in the wide market of companies and administrations, which allows the design, development and offer of tailor-made services, in which the possibilities of extracting differential value from 5G, customers and operators can be specified .
As corresponds to the leader, the first operator in Spain to offer generic 5G services associated with certain usage scenarios (“off-the-shelf” in the English term) has been Telefónica, which through its business division Telefónica Tech announced on November 29 the launch of three services:
1) for the use of remote-controlled robots (AGV) in manufacturing environments,
2) for remote assistance to operators (using augmented reality resources) and
3) for the operation and management of drone fleets for various uses.
Presumably these offers incorporate the accumulated experience in relevant pilots, both in the use of public, private or hybrid mobile networks, such as the one we are developing in the Basque Country through the UTE “5G Euskadi” for the optimization of the use of spectrum, the connection to a proximity data processing center (“edge computing”) and the need to have an open catalog of devices (modems, sensors) compatible with the associated infrastructure.
The adoption of these solutions offers to improve the reliability thresholds of the associated processes and provide relevant savings in labor, either by automating tasks, such as in the first service mentioned or by the possibility of employing less qualified professional profiles, such as in the second of them.
Capturing the expected benefits of the incorporation of these solutions may require the modification of processes and associated systems, that is, an integration at least in the capture, processing and return of data, practically in real time, taking advantage of the artificial intelligence capabilities that enable autonomous and potentially uninterrupted operation.
The price of the services is foreseeable that it incorporates a certain degree of individualization, taking into account the exclusive use infrastructure, the application use licenses – for which the three main providers of the public “cloud”, such as AWS (“Wavelength “), Microsoft (” Azure Stack Edge “) and Google (” Global Mobile Edge Cloud “) have developed an offer for the integration of data flows and their treatment specifically for 5G, taking advantage of their proximity CPDs – as well as the amortization of the spectrum radioelectric station dedicated by the operator (it would be possible to think of long-term cession models in the corresponding location, with the necessary reserves, taking into account the traffic of the assigned lot) and in particular it would be necessary to include an economic assessment of the agreed service level, according to at levels of availability, latency and response in the event of an incident, which would configure a certain general level of service, assuming the nonexistence data franchise.
Perhaps for complex installations or for several locations the commercialization models come to incorporate a variable remuneration based on returns for the clients. In outdoor services (such as that related to drones) the 5G wireless connectivity offer is unbeatable, but indoors, particularly in 80-160 MHz channels, when there is not a high density of connected devices or there are no structures that can generate interference fields (for example, in remote care in healthcare facilities), the WiFi 6E alternative offers comparable, even higher performance and performance (in CableLabs tests in a home, with ASUS equipment, 1.7 Gbps download and 1.2 Gbps upload).
In parallel with the proposals for services to companies, for a long time and normally through different tenders, the operators and in some cases the providers of mobile telephony infrastructures are offering management services for the fleet of devices associated with public services (lighting, traffic management, urban advertising), in some cases linked to investment in equipment renovation (for example, the replacement of lights), although for these cases of reduced data traffic (as occurs, for example, in remote management of crops or renewable energy plants) other IoT technologies, such as LoRaWAN are currently more competitive than 5G.
It is unlikely that we will witness a massification of industrial 5G solutions by business or “vertical”, as they say in the jargon of the ICT sector. For multiple reasons, starting with the fact that the integration of connectivity capabilities and IT tools, now more complex due to the combination of information processing in proximity with a dedicated access network, demands a high degree of customization and constant adjustment, which makes it difficult to prepare a conventional rate, necessary to achieve the benefits of scale that can make the reconfiguration of proposals competitive. The interoperability (that is, the ability to move to another infrastructure), the resilience and flexibility of a tailored solution are essential but extremely difficult to achieve, as has been proven in various installations.
The trajectory of operators and IT consultants in the implementation of “off-the-shelf” solutions is not promising, in terms of meeting budgets and schedules, but perhaps with the 5G offerings the difficulties experienced by institutional clients with ERP applications. On the other hand, the eminently dynamic nature of the usage patterns will require continuous adjustment, with a model of close collaboration between the user organizations and the 5G solution provider, with profiles and qualifications that were unusual up to now. This collaborative model may in turn facilitate risk and benefit sharing schemes that open new perspectives of efficiency for customers and profitability for providers, which could include companies that have adequate physical support infrastructure for the new 5G networks. specific purpose (owners and managers of sites and energy distribution network companies), encouraging the concurrence of proposals, especially if they incorporate elements for the optimization of associated energy consumption or the generation of emission rights in favor of the client.
In summary, as Jason Keane, Head of Products and Solutions BSS (“business support software” for operators, that is, commercial) at Ericsson, recently revealed on his blog, after conducting a survey of 173 specialists from 61 operators Globally, just 10 percent of the latter said they were prepared to offer and convert 5G business services into revenue, while about 44 percent said they were halfway there. Flexibility and scalability were considered basic attributes of any solution, while the need to invest substantially in technical resources was raised, with the focus on probable modifications of business scenarios (in reality, we are still talking about “cases of use “, which shows the difficulty in acquiring a commercial vision of the opportunities).
2022 will be the year of 5G, with all the segmentation possibilities that this technology offers in its “stand-alone” version (separation and prioritization of traffic based on the associated service agreements, application of differential levels of security according to clients who share resources, etc.), open to the individualization demanded by the hybrid business needs of connectivity and data processing or 5G will not be a short-term option to reverse the weakness of revenues in this area of operators and integrators. This is how PwC’s consulting arm Strategy & analyst Dan Hays recently saw it: “For now, 5G is just a potentially faster version of 4G.” However, the knowledge accumulated in the pilots underway with multiple use cases that can be replicated in different environments and the capacity of the design and development professionals of operator and integrator services opens up an illusionary perspective regarding this emerging business.