In the face of all the 5G hype around us, the idea that “we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”, as coined by Roy Amara, comes to mind.
It is estimated that by the end of 2019, 25 of the 72 operators who tested the technology in 2018 will launch 5G networks in part of their respective territories. The projection for sales of 5G-enabled smartphones is 1.5 million until the end of 2019. By 2020, this should grow to 15 to 20 million units – one per cent of global smartphone sales[1].
Over the last few years, 5G technology has been steadily progressing as a result of work by major hardware vendors. Interestingly, we are also seeing the rise and convergence of Cloud computing, Big Data, the Internet of Things and Artificial Intelligence, fuelling a ‘perfect transformational storm’. 5G is expected to offer highly increased internet bandwidth, reduced latency, speed and sharper response times. Once fully realised, it will be an empowering technology and a catalyst for further innovation, helping to steer the Fourth Industrial Revolution.
What is often overlooked is that for these benefits to be realised, 5G needs to be at least as pervasive as 3G in terms of geographical coverage. And for most of the emerging applications, ubiquitous coverage is actually a requirement. The automotive sector is just one example where seamless outdoor connectivity is needed, as connected mobility and autonomous transportation will require multiple sensors and equipment working in tandem, reacting rapidly in real-time.
Because the use cases behind the promise of 5G require geographic rather than demographic coverage, 5G terrestrial networks struggle with serious limitations. There is this inescapable rule of thumb, in that using higher frequencies enables more bandwidth, greater capacity and faster data transfers. But it also dramatically cuts the reach and the ability of a signal to cross obstacles such as buildings, roofs and walls. So, while a single 5G cell tower can serve an astounding one million users, it can only do so within line of sight i.e. approximately one square kilometre – or even less, depending on the obstacle in question.
More cell towers will eventually be needed to service a 5G network and even if 5G initially operates in conjunction with existing 4G networks, ensuring geographical continuity across vast territories will get extremely costly.
So, how can 5G deliver on its disruptive promise? The answer comes from space and brings a whole new reality for CSPs to deal with: network convergence with Non-Terrestrial Networks (NTNs) and seamless hybrid networks, including space grids of different or combined orbits or platform types.
Without the integration of satellites with terrestrial networks, adequate standards of 5G coverage, service ubiquity and overall network reliability and security[2] cannot be made effective, nor efficient. Even though latency can get sacrificed (high and mid-Earth orbits add some 50-100 ms due to the distances), a trade-off is still worth plugging holes in 5G coverage. And that is not as far-fetched as one may think. Billions of dollars are being invested in such space grids. But let’s consider for a moment something closer to home: think about a single High Altitude Platform Station (HAPS), located at an altitude of some 20 kilometres, enjoying light winds and running on solar power for weeks or perhaps months, with very low costs of maintenance and replacement, when compared to satellites. One such platform can provide 5G coverage to millions of users over an area of nearly 300 square kilometres.
Network scale is therefore becoming as important these days for CSPs, as access to a content portfolio has become. Market consolidation and the development of major communication conglomerates have created several major global players. But will that trend impact the satellite industry? How far will regulators go in accepting further consolidation with global satellite network providers?
Whatever the future may bring, the chances that a single CSP can rely on its own network to monetise potential 5G offerings are probably low. The choice for CSPs is to either watch as their ‘pipe’ role becomes marginally relevant in this new IoT ecosystem or else, find a relevant role for themselves to monetise IoT.
An example of what CSPs may have to offer is edge computing infrastructure for OTT services providers and applications. This enables ‘fog computing architecture’ required for time-sensitive IoT applications. By bringing processing capability closer to data sources, CSPs can eliminate the time required for the IoT ‘Sense > Communicate > Control > Act’ cycle. And that can be a significant differentiator in demanding IoT market applications.
The list of IoT opportunities is vast and will certainly bring new applications, content and services. This will happen regardless of the origin of the provider, network technology, device or location. CSPs’ customers may wish to buy ‘transactional’ or on a subscription basis. In any case, customers will expect the product to be available for purchase everywhere, supported on every device, and connected across all their IoT devices.
So even if a hyper-connected future is not as imminent for end-users as one might think, it is probably not too early for CSPs to think about how to get ready to take the front seat in the value creation chain that 5G entails.
To seize upon the boundless possibilities of IoT, CSPs need to rethink their business and assess their readiness to react to changing conditions. IoT opportunities will likely emerge at a very fast pace. The ability to quickly and efficiently commercialise offerings is crucial for service providers to succeed in this new environment. This calls for having to define new products quickly, adjusting ongoing offerings and reacting rapidly to competition. Adopting a catalog-driven architecture enables CSPs to stay relevant and monetise IoT as it evolves, avoiding the trap of catering to only a tithe of what could be a massive and highly promising market.
Filipe Marques,
Regional Vice President, Customer Success, Central and Latin America
[1]Deloitte TMT Predictions 2019 Report
[2] ESA (2018), News, integration of non-terrestrial solutions in the 5G standardisation roadmap.
