PARTNER FEATURE: With the first set of 5G standards on the not too distant horizon, the mobile industry is working hard on pre-commercial pilots to pave the way for the early introduction of new services. At Huawei’s Global Mobile Broadband Forum (MBBF) 2017 in London, it was clear that technology is only part of the challenge.
The arrival of the 5G NR (New Radio) standard will give operators the chance to start on the 5G journey in earnest, while 2019 will see the momentum really building. But in the early years, the technology will lean heavily on 4G – which means operators are continuing their 4G investments with an eye to the future.
Ryan Ding, President of the Carrier Business Group at Huawei, pointed out that there is much operators can do already. “We must act now, incubating new services and building new capabilities in 4.5G networks,” he said, identifying markets such as fixed broadband access and narrowband IoT as offering potential.
“These two services will not only create new revenue and new services, but they will prepare operators to build 5G capabilities in operations, in organisations, and most importantly, in the ecosystem,” he said.
Enrique Blanco, Global CTO of Telefonica, noted, “We’re fully convinced that the final 5G competitive position of Telefonica is being built today.”
One of the key features of 5G is that rather than being consumer-oriented, it’s designed to support for enterprise requirements.
“We don’t really deliver the network at the moment for our business customers. But hopefully that will change,” Antje Williams, SVP and Executive 5G Program Manager for Deutsche Telekom, said during MBBF’s 5G Summit. Early tests are playing an important role in “getting closer to reality”.
With this focus on supporting business needs comes a number of challenges. Erol Hepsaydir, Director of RAN & Device Strategy and Architecture at 3UK, noted that to meet the new requirements, the shape of the industry also needs to change.
“We have been working in 1G, 2G, 3G, 4G, very, very closely with infrastructure and devices and operators. We’ve formed a very close ecosystem,” he said.
“As an industry, we need to start getting engaged with the new players in the market. They’re not in this ecosystem yet, but we have to include them somehow in this infrastructure, devices and operator triangle, and make it a square,” the executive continued.
This sentiment was echoed by Yang Chaobin, President of the 5G Product Line in Huawei, who pointed out that, so far, companies from industry have been underrepresented in developing standards.
“We must fill the gap between the requirements of the verticals and defining standards, otherwise only telcos define the standard, and I don’t think it can meet the requirements of the different verticals,” he said.
Emmanuel Lugagne Delpon (pictured left), SVP in Orange Labs Networks, was positive about the potential of 5G for industry. “The aim isn’t to disrupt verticals, the aim is to provide full capabilities to make verticals happen. So the idea is that we try to educate the market and push the new services and industry to use the pre-5G technology to get used to the technology and in the end use 5G enablers,” he said.
With the evolution of mobile networks to support enhanced mobile broadband services, the addition of billions of IoT devices, and the ability to support specialized services through network slicing, there is another challenge for 5G away from the radio network – complexity.
“What all the presentations show is a huge increase in network complexity. And that worries me, because we as telcos don’t really do complexity all that well – at least that’s my experience,” admitted Neil McRae, MD and Chief Architect at BT.
Noting the wide range of potential applications enabled by 5G, Liu Guangyi, Wireless CTO at the China Mobile Research Institute, warned: “We cannot just use one solution to serve all of them. For example, if we have 1,000 use cases in our 4G network, we have to modify our network manually, one by one”.
This is clearly not sustainable in the future. “We need totally flexible deployment of functionalities and also the network nodes according to the requirements of our customers, according to the use case,” he said. This will require not just an evolution of the radio network, but also the core network and support for flexible network slicing.
“This is the only way for us to empower our enterprise markets and vertical industries.” 3 UK’s Erol Hepsaydir suggested, “We need to look at automation, because the networks are going to get really complex.”
Opening Huawei’s main event, Ken Hu (pictured left), Huawei’s Deputy Chairman and Rotating CEO, said that future networks need to be “application centric, data-driven, and eventually, it should be an intelligent system.” Describing the situation as a “paradox,” he noted that networks are getting more complex and the applications running on top more diverse, while the O&M models for networks have remained the same.
Key technologies enabling transformation will be AI and machine learning. Arnaud Vamparys, Senior VP of Radio Network at Orange Group, said that predictive analysis is already being used “to know in advance where an event will take place with a high demand for connectivity, to be able as well to reconfigure the network automatically in case of failure, for the customer not to notice.”
In future, operators will need tools to enable business and wholesale customers to have greater control over their services, “It’s around on-demand networks,” he said.
And this increased intelligence could also open-up new opportunities. “If we know that there is a customer that’s got a process in perhaps a hard to reach part of the country, or perhaps a specific demand, we can let the customer tell us and try and upsell them an improved service,” BT’s Neil McRae reflected.
As Telefonica’s Enrique Blanco concluded: “If someone thinks we can manage the networks as we are managing the networks today, it’s going to be just impossible.”
5G business models
A potential sticking point comes from business models. Gavin Patterson (pictured below), chief executive of BT Group, was the most open in expressing his concern during a keynote appearance.
“I talk to other CEOs around the world in this space, and we’ve all been struggling a little bit making the business case work. If you look from 3G to 4G, the case was underpinned by going from what was a pretty poor internet experience, to one which was really opening up the potential of the Internet to mobile. And we haven’t found that yet for 5G,” he said.
Patterson continued: “Clearly the innovation is there, it’s coming to market quickly. But, ultimately, as carriers we’ve got to make a significant investment and lower CAPEX, and the business case still needs to be I think learned, in many ways.”
His sentiments were echoed by Bruno Jacobfeuerborn, CTO of Deutsche Telekom.
“Do we have a business case for all of 5G, today? No. Will we have a business case? For sure. So we have to work on this one, to make it happen, as we did on 4G and we did on 3G. But it’s not a no-brainer. When we talk about 5G and what we can do for customers, that’s one side of the coin. The other side is that we have to do something to make it happen,” he said.
Due to the technology choices made to bring 5G swiftly to market – leaning heavily on 4G – and the uncertainty surrounding many of the potential future applications, initial 5G services will focus on enhanced mobile broadband and fixed wireless access. Opportunities in new markets will follow as the technology matures.
And the industry is not necessarily doing a good enough job of communicating the benefits 5G can bring in its early days, Johan Wibergh, CTO of Vodafone Group, argued.
“The increased efficiency that you’re getting means that 5G is significantly more cost efficient than 4G. If you look at cost, you have almost ten-times the cost efficiency with 5G. And I don’t understand why we as an industry are not talking more about this,” he said.
Noting that technology standards have a ten-year lifespan, and continue to evolve during that time – for example as LTE has developed with LTE-A – he said: “I meet a lot of investors and industry analysts, and there is a lot of disbelief about 5G, especially if we talk about the things that will happen in the next two years, but we don’t explain the first two years.”
As Orange’s Emmanuel Lugagne Delpon wrapped up: “5G is going to evolve within a few years. The 5G of 2030 is going to be different from 5G of 2020, with different architecture and evolving standards.”