How Will Service Providers Monetize 5G?
The decisions service providers make today will have a profound effect on their ability to execute moving forward. Investing in 5G is a strong bet, but it’s also a long-play wager.
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The next generation of 5G-enabled devices sure to capture the imaginations of consumers everywhere are expected to be unveiled at MWC Barcelona (formerly Mobile World Congress).
While talks of how 5G is changing the world will dominate headlines during MWC Barcelona, you can bet that many of the discussions taking place behind the scenes will be concentrated on how operators can actually make 5G work.
The world of 5G is extremely fragmented, with lots of vendors claiming to do many different things. It is no doubt difficult to navigate. And it’s critical service providers be able to decipher which vendors provide value and which are more of a smoke and mirrors proposition.
The smart play to ensure you’re in position to monetize the unlimited possibilities 5G seems to offer is to start planning.
The long game
The future is bright for those who invest wisely.
The decisions service providers make today will have a profound effect on their ability to execute moving forward. Investing in 5G is a long-play wager. In fact, service operators may not see a return on their network investments for several years.
Like any investment, there’s risk.
Roughly two-thirds of organizations plan to deploy 5G by 2020, according to a recent Gartner survey. However, by 2022, half of the communication service providers that have completed commercial 5G deployments will fail to monetize their back-end technology infrastructure investments because those systems will not fully meet 5G use case requirements.
Edge is the new playing field
If winning the 5G game is the goal, then edge computing is where the fight will be won or lost.
Edge computing is placing what are typically thought of as cloud resources as close to the customer as possible in order to ease the burden of the wave of new network connections that will be ushered in via 5G. A smart edge strategy will be paramount in enabling the new technology value chain that will be unlocked by 5G adoption.
Agility will be just as important as networks will need to perform quickly and at global scale in order to monetize future services. With that in mind, operators would be wise to take a more agile approach to building out their future networks and make it easier for the development community to get in on the action.
Verticalization and integration
If 5G is to truly unleash the power of the Internet of Things (IoT), then verticalization is the only way to start. But, again, 5G is a fragmented space with vendors using different architecture stacks that can be hard to put into a common framework.
The infrastructure and architecture needs of the pharmaceutical industry are different than those of the retail industry, which are different than those of manufacturing or financial services and so on.
Customers, understandably, want simplicity.
Service providers need a cross-functional platform that can work across as many of these verticals as possible. They don’t necessarily have the scale or skills to go into each market and create 10 different tools for each.
So while service providers are figuring out the smartest way to implement an infrastructure, they’ll need an integrator that can then leverage that infrastructure to develop a customized architecture specific to a customer’s vertical.
Take, for instance, what World Wide Technology is doing with Deutsche Telekom-spinoff MobiledgeX, which is taking a unique and interesting approach to deploying edge services by better leveraging the software development community.
Edge computing is a critical enabler of the next generation of 5G-enabled devices and services.
WWT is working with MobiledgeX to validate edge architectures, such as Red Hat’s Virtual Central Office, for performance, security and scalability using WWT’s state-of-the-art Advanced Technology Center (ATC), so that developers can more seamlessly certify solutions capable of fulfilling the requirements of existing and future use cases.