5G growth is a persistent trend across industries, and reports have forecasted that 5G subscriptions will reach 4.4 billion globally by the end of 2027, accounting for approximately 48% of total global mobile subscriptions.
5G network technologies are evolving faster than any previous generation, with cloudification and disaggregation among the trends that are fundamentally changing how mobile networks are built and operated. What’s more, 5G exists in a telecom marketplace that is rapidly evolving in terms of competition and business models. So, what does this 5G revolution mean for operators?
For mobile operators, these rapid, simultaneous trends create both opportunities and challenges. For example, most operators have spent billions on the spectrum and infrastructure necessary to roll out 5G, and they’ll spend even more over the next several years to expand those networks. Recouping those investments won’t be easy. Most 5G plans are priced the same as 4G because no operator can risk losing customers — and it is increasingly difficult to attract new users. Mobile operators also face additional competition from satellite providers and greenfield Mobile Virtual Network Operators (MVNOs) competing for many of the same customers and enterprises.
In parallel to 5G, the disaggregation of hardware and software that enables telecom operators to deploy virtualized, better managed, multi-vendor radio networks is another significant emerging trend in this space. OpenRAN alliance is providing the specifications required to achieve this goal. The long term “cost-to-serve” for operators can significantly decrease if disaggregation along with massive automation can be implemented. OpenRAN also introduces open interfaces, therefore the network equipment can provide data for deeper analytics, observability and data-driven and intelligent automation.
Open RAN also sets the stage for cloudification of network functions, services and applications. This combination of software transformation and cloudification helps operators be more nimble and competitive, resulting in better maintenance, more seamless upgrades and scale that is synonymous with web-scale deployment. That’s because it’s faster, cheaper, and thus less risky to innovate than when the software is locked to a specific vendor’s hardware. And if a new service turns out to be wildly successful, the cloud enables the operator to scale up quickly to meet demand.
The 5G ecosystem
Low Earth Orbit (LEO) satellite broadband services are examples of how non-terrestrial networks (NTN) are starting to target some of the same markets as 5G. But 5G standards also are evolving in ways that enable NTN providers to be potential partners for mobile operators.
For example, the 3rd Generation Partnership Project (3GPP), which unites seven telecommunications standard development organizations, recently released the third and fourth installments of their global 5G standard — Release 17 and Release 18 — which support NTN integration with 5G.
Despite high data rates and low latency, terrestrial mobile networks cover 20% of the land area and around 6% of the Earth’s total surface. Satellite systems can offer global coverage and connectivity for first responders and mission-critical systems. However, satellite communication suffers from low-latency and therefore can benefit from the seamless and ubiquitous connectivity enabled by integrating terrestrial and satellite communication systems. Air-to-ground inflight connectivity, unmanned aerial vehicle (UAVs) and drones are several other use cases of high-altitude platform systems (HAPS) that can benefit from 5G.
Another feature that will drive industrial adoption includes 5G Reduced Capabilities (RedCap) – a reduced set of capabilities for 5G devices intended for wearables. These low-power IoT devices have low bandwidth and power requirements but will benefit from cellular connectivity. 5G RedCap is expected to drive industrial adoption of 5G enabled sensors. Additionally, the rapid development of AI-native 5G networks — where intelligence is embedded in the 5G networking products themselves — will drive more autonomy.
Hyperscalers are also emerging as key partners for mobile operators. This is because hyperscalers have the expertise and infrastructure available to help operators take advantage of cloudification. What’s further, hyperscalers have introduced cloud services for operators to incur increased revenue out of the enterprise market. Because the marketplace for applications and industry use cases sits primarily with hyperscalers, the mobile network ecosystem is expected to further strengthen these partnerships.
Beyond hyperscalers and satellites, tower companies will also play a key role in 5G adoption. Tower companies have the existing real-estate, which they can further monetize by developing edge compute solutions. As neutral host providers, Tower companies can own indoor telecoms network equipment and allow one or more communication service providers (CSPs) to use that infrastructure to serve their customers. This would drive new revenues for both tower companies and CSPs.
Call in the experts
Where 5G is concerned, these new freedoms come with new responsibilities. With traditional network models, operators could rely on a single vendor to make all the hardware, software and additional components work seamlessly. 5G’s disaggregation means that operators are now responsible for integrating, troubleshooting and optimizing their multivendor networks. These tasks can increase the operator’s overhead costs — for example, if increased staffing is needed.
It’s important to remember that many of the new revenue and market opportunities for 5G require unprecedented Quality of Service (QoS) levels, such as ultra-low latency for factory automation and other industrial IoT applications. Operators must be capable of all the integration, optimization and support that’s necessary to ensure that their 5G networks can meet these demanding new QoS requirements. This can be a daunting challenge and has prevented operators from taking the leap from the traditional single-vendor model to 5G. However, many others are willing to break tradition because they know it’s the only way to maximize revenue and make 5G profitable.
To successfully move from a traditional model to a 5G model, operators have begun to bring in specialists capable of integrating multiple vendors’ hardware and software, as well as services from the operator’s partners, such as hyperscalers, tower companies and NTN providers. These experts also free operators from the cost of adding the staff, labs, test tools and other support necessary to handle tasks such as integration, automation, orchestration and troubleshooting. Their guidance helps ensure that operators’ bold vision of 5G lives up to its full potential.
