OK, it’s ‘secure’ and ‘immersive’ but what will 5G actually do?

April 27, 2018

Posted by: Zenobia Hegde

Sam Evans of Delta Partners

At MWC 18 in March you couldn’t move for proclamations of the benefits of 5G. It’s ‘seamless’, ‘inclusive’, ‘immersive’ and ‘secure’, to name a few.

While it was encouraging to see the 5G experience well described to the more than 100,000 visitors at in Barcelona, says Sam Evans, associate partner at Delta Partnerswhat was lacking was a view of what 5G would actually do.

What are the use cases it will enable beyond the ubiquitous connected cars on every stand? What are the commercial models that will justify the investment? A 5G-connected drone might reduce 90% of remote site inspection costs, what is the commercial model that will compensate the network provider who may just be providing the connectivity? And is 5G really required for that use case?

Looking for a return

For an industry that has invested more than US$1.2 trillion (€0.99 trillion) globally in its networks since 2010, any new investment needs to be met with an expectation to generate a return. Some estimate 5G may require network investment of $250 billion (€206.52 billion) in the US alone. The numbers do not seem to add up, yet. It was reassuring to hear Sigve Brekke, CEO of Telenor, state that he would not push 5G until they identify use cases.

For 5G to make commercial sense, we need to look past the hardware – VR headsets, drones and autonomous vehicles – and recognise that a new infrastructure model is needed to support use cases that have a chance of creating a commercial return. When it comes to 5G, the traditional telecoms logic of build-your-own network infrastructure on which to provision services may not hold. Services will need to be cloud-based and with global reach. Leading international enterprises that will power the Industrial Internet of Things will expect one solution to work globally.

Deeper partnerships needed

Infrastructure may need to be shared, and partnerships created, between the network operators and global cloud providers such as AWS and Google. When one person controlling a machine can manage, in real time, a network of millions of sensors dispersed across the world, the concept of partnership needs to go much deeper than what we see today.

There is also the question of timing for 5G infrastructure investment. Too early and there is the risk of high network cost and technology implications, and if too late there is the risk of losing market share (as late deployers of LTE have found out to their detriment). As if telecom CFOs need another reason to keep them awake at night.

The author of this blog is Sam Evans, associate partner at Delta Partners

Comment on this article below or via Twitter @IoTGN