The Costs of 5G: How Telcos can Maximize ROI

In the future, we will look back at 2020 as the year of 5G. The latest radio technology will be available not only on early-adopting markets, but globally. However, this doesn’t mean should expect much more than faster connectivity, as most telecoms still lack innovative business cases for finding 5G ROI. In addition, most will still be using their legacy core with 5G added on to create hybrid networks. Nevertheless, the connectivity will be there.

Change in 2020 will be supported by new products from 5G device vendors

Apple are expected to launch their 5G iPhone introduction, with others bringing innovative devices to market too. Good quality, affordable consumer electronics will help to popularize 5G and, as the Korean and US markets confirm, higher bandwidth in the consumer segment will bring the first real benefits from 5G. While eMBB (enhanced mobile broadband) is being delivered, operators will be looking for ROI on mMTC (massive machine type communication) and uRLLC (ultra-reliable low-latency communications) projects too.

The cost of 5G

The greatest monetization potential in 5G lies in new business models enabled by these technical capabilities. In parallel, telcos need to be open to new partnerships, paying attention to several factors to ensure 5G ROI.

There must be a mechanism for onboarding partners quickly, so they can manage and deliver products and services either independently or within bundled offers. Telcos should offer network slicing as a service, letting partners run their own networks and ensuring appropriate KPIs. In addition, mature APIs need to be exposed across the whole open digital architecture, so partners can re-use numerous functionalities and processes, and embed them within their own IT architecture. Finally, operators will be expected to support other service-based offers (for example, billing as a service) and API call charging.

Looking to 2020 and beyond, the automotive industry is likely to be the largest 5G IoT sector. Industry 4.0 will advance further, thanks to uRLLC, and augmented/virtual reality will move away from the realm of gadgets towards an “augmented workforce” model with real business applications. Momentum will build in the area of converged cloud management (including management of edge micro-data centers and applications requiring low latency). And finally, we should see the steady implementation of service lifecycle management, based on standards from MEF and TMF – beginning with enterprise-centric services leveraging advances in SDN and NFV.