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Reality Check: 5 th Generation wireless technology create lucrative opportunities for carriers

Mahbubul Alam 5G Leave a Comment

5G is set to move mobile operators away from being a dumb pipe and towards lucrative support for new industries like autonomous vehicles

It’s been said ad nauseam that technology never sleeps, relentlessly evolving and changing while creating business disruptions along the way. This reality can result in power and profits for industry segments at one moment, only to see these advantages taken away in the next evolution. Particularly impacted by these vicissitudes are the mobile operators and carriers whose network pipes are essential in our online age, but who continually seek ways of grabbing more profits from these services.

Fortunately for telcos, the emergence of the autonomous car along with the next wireless technology, “5G,” could be a miraculous pairing that sets up carriers for lucrative new revenue streams in the near future. High-speed connectivity is at the heart of connected cars, thus 5G network systems have a significant role to play as the auto industry undergoes a major transformation toward fully autonomous vehicles that will require cars to cooperate with each other and with the infrastructure in a secure and reliable manner. Some important needs include higher sustainable throughput, greater outdoor position accuracy, guaranteed jitter/delivery at a significantly reduced latency and improved vehicle safety even for out-of-coverage communications.

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New network standards and shrinking telco profit

Every few years, telecom networks improve, getting faster, with more bandwidth and better connectivity. A new mobile generation has appeared roughly every 10 years beginning with 1G – or analog – in 1982. Today, we are looking forward to 5G wireless systems, which will be rolled out by 2020, to meet consumer and business needs.

5G promises data rates of hundreds of megabits per second for tens of thousands of users, along with significant spectral efficiency compared to 4G and greatly reduced latency compared to LTE. 5G networks will also likely meet new use cases, such as all the connected devices inherent in the “internet of things” as well as broadcast-like services and lifeline communication in times of natural disaster.

Telcos are looking at 5G with great interest as a way to start providing and charging for value-added services to the end user. They see 5G as a way to move beyond their current much-regretted role of offering, basically, a dumb pipe. How this came to pass demonstrates how unforgiving innovation can be to some sectors.

When Apple came out with its App Store and Google followed with Google Play, carriers lost much of their lucrative interaction with consumers. Rather than buying ringtones, music, games, applications and more from carriers via the operator’s own portal, consumers could now use the iPhone and other smartphones to directly surf the net through the phone’s built-in browser. This relegated the network to just a dumb pipe that was also a less profitable pipe.

Also worrisome to telco executives was the rise of so-called “over-the-top” content, which means audio, video and other media sent over the internet without the control of the network operator. Netflix, YouTube, Spotify and a host of similar media services own the OTT space today, with carriers ever hopeful they can somehow get in on this flourishing arena.

Dedicated networks for many industry segments

With 5G, industries such as automotive, smart grid and transportation will have a network to meet their needs. Take the autonomous car, 5G will enable autonomous cars with a full range of advanced driver assistance systems to give us services such as autonomous vehicle over taking, platoon driving or autopilot in urban settings.

5G will also serve to replace older terrestrial trunked radio networks designed as a channel for public safety, but without the high costs and incompatibility with prevailing standards. Unrivaled in terms of security, call set-up time and instant access, TETRA requires its own network separate from public networks, but with 5G the same network will have the same capabilities and a superior approach in terms of cost.

In the case of automotive, the upcoming 5G wireless -driven network will offer a number of advantages:

  • Mobile broadband
    This means delivering extreme peak and sustainable speeds with data rates of 100 megabits per second. The network is ideally suited to the autonomous vehicle technology – it will give us three-times the spectrum efficiency and 100-times the device density than 4G networks.
  • Superior D2D coverage
    Unlike the well-known issues in today’s mobile industry regarding cell coverage, 5G makes possible remarkable amounts of connectivity in heretofore difficult coverage areas that doesn’t require a cell tower to be in direct contact with a device. Rather, the signal hops from device-to-device to create a connection. For the autonomous car, this improves connectivity.
  • Mission-critical control
    With the high reliability of 5G, autonomous cars will achieve unheard-of levels of reliability of 99.999%. In addition, 5G offers guaranteed jitter due to no packet delay variations with ultra-low latency. Outdoor location accuracy will drop to less than 10 centimeters, which is remarkable.

5G can provide a lifeline to Automotive Indusrty

The telcos have lost the 3G and 4G wars in terms of revenue, superseded by mobile device manufacturers and OTT service providers. But these carriers and mobile operators will have a new playing field when 5G rolls out. Rather than relying on service charges for data and voice – as is the current situation – network providers could use the powerful capabilities of 5G to offer new services with the right level of customization to each industry. This is necessary because of how diverse pricing is between, say, the low-revenue consumer market compared to areas like automotive and smart grid.

Making such fine tuning possible is the dynamic network slicing of 5G that will enable the creation of differentiated, customized “slices” running on a common network infrastructure through leveraging software-defined networking, network functions virtualization and other software capabilities.

Emerging areas like wearable devices, virtual reality augmentation, ultra-high-definition video and other applications will ready customers for this dedicated slices of the 5G network. 5G will let operators divide up the network into a consumer service that will continue to operate as it always has and a second, specialized service for IoT markets such as smart cities or automotive.

For the first time, mobile operators or telcos will have the ability to create a “dedicated” network for each vertical industry so that, for example, only automotive traffic travels on the automotive network slice. It will be customized and optimized for automotive, including pricing. Consider a scenario where a family is traveling in its autonomous car with the kids using the regular network for watching movies while the car uses a special mission-critical network within the 5G spectrum for vehicle-to-vehicle communications and for ADAS to ensure the highest passenger safety. Such services could be the resurrection of telcos.

New revenue streams for telcos

If mobile operators can avoid being greedy when these new opportunities emerge, they will benefit from 5G in the autonomous car market. The auto sector doesn’t have unlimited pockets when it comes to paying for services and savvy telcos will realize that not only should this market be very large, but other new services will appear that will help their bottom line. For example, carriers will likely play a bigger role in providing remote diagnostics, remote software updates, remote support and other services to these autonomous vehicles. With the capabilities of 5G, such services require no person in the middle and thus reduce costs on the provider side, bumping up profit margins.

The success of the autonomous car depends on the new world that 5G will open up on the network side. This presents the biggest opportunity to date for telcos to move beyond being simple pipe providers and play a critical role in enabling an industry – autonomous cars – that will remake not just the auto industry, but a wide swath of society.

Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.

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