Lights and shadows of 5G: Is it profitable for everyone?

All these ‘benefits’, if we analyse them from the customer perspective (whether enterprise or end user), have not materialised – for the moment – in any new or differentiating use. If the arrival of 3G boosted the widespread consumption of data on mobile devices, and 4G led to the smartphone boom – with video applications and social networks designed exclusively for them – it is not so easy to identify how 5G changes the life of the average citizen.

Impact of 5G on the digital ecosystem

The GSMA analysis makes it clear that 4G has sufficient capacity to cover such demanding functions as a wireless office in the cloud, group video calls or real-time online gaming. There are few applications that require at least one of the differentiating elements of 5G (and we are now talking about true 5G, latency of less than 1 ms and downstream speeds of more than 1 Gbps) and can therefore be considered truly unique to this technology. Among them, the international body highlights the already hackneyed applications such as virtual and augmented reality, immersive or tactile internet and the autonomous car… well, this is the dreaming part we mentioned at the beginning.

Challenges for operators

Maintaining a duplicity of network infrastructures is clearly not economically efficient and, of course, more complicated to operate and support (yes, not economically efficient). Added to this is the fact that scalability must be taken into account in all technologies, so we can end up with three structures (2/3G, 4G and 5G), which leads to the inherent problems of scalability – it is not easy to expand operations to meet fluctuations in demand – and of adapting to market needs, so innovations are more limited, which also complicates the commercialisation of new services or the arrival of the technology for them.

The solution then is to have a single platform, compatible with legacy networks as well as current and future ones, capable of ensuring a smooth transition – technically and economically. The good news is that today’s technology makes it possible for providers such as JSC Ingenium to make such solutions available to all operators – large, medium or small – at an affordable and scalable cost. Moreover, they are designed to operate in the cloud, whether public or private (although it is not essential to have a cloud environment) and can be deployed in almost any infrastructure.

The What and the How

If, despite all that has been written and talked about 5G monetisation, operators are not seeing a clear return on investment on the demand side, the best alternative for them to maintain – and improve – their balance sheets is to look at new ways of doing what they have always done and, in doing so, adjust costs. Beyond re-evaluating what services are offered to justify price increases, it is time to focus on all the possibilities they have in terms of how they manage their operations and how much they can optimise their performance.

A big difference between the real 5G and its predecessors (3G/4G) is that it involves much more profound changes and the way to get the most out of it is to understand them. Assuming that, in this case, it is not a mere evolution of what was already there, but a real revolution that brings with it totally new concepts such as network slicing, edge computing, containerisation, microservices, cloudification… Operators can be great beneficiaries, but they will also have to be the great drivers, the agents of change.

The implementation of all these elements associated with 5G is very uneven among operators. It varies greatly depending on size, maturity level, availability of resources… but, undoubtedly, the most decisive factor is the ability of decision-makers to anticipate the future of telecommunications.

In conclusion, the profitability of 5G if it is not in the market for the time being seems to be subject to the ability of operators to see and go a bit further. Those who develop the potential of all these tools of network segmentation, microservices, containerisation, etc. in an efficient, open and backwards compatible way will increase their competitiveness in the market, will be able to continue to invest and grow. Those who do not, may be able to get around the difficulties for a while, but in the long run… they shall not pass!