While mobile operators have been evangelizing 5G for the last decade, 2019 was the year that 5G network deployments actually started to become a reality. But there continue to be several unknowns about how 5G will actually work and if it can be immediately monetized. Determining these factors will be pivotal to the success of 5G this year.
Among other things, 5G will enable mobile internet speeds that will pave the way for a new generation of highly reliable, real-time, automated services, like smart cities and highways. And many businesses are eager to begin preparing for how to capitalize on the first 5G services that consumers begin to move toward.
To get a better understanding of this and how much we can expect to start seeing 5G services this year, we recently conducted a survey of the readers of the publication Heavy Reading. We specifically looked at how mobile operators will actually begin to make use of 5G to provide new services for companies, and how important a part will these services will play in operators’ business models. We found that, among other things, 77% of their audience expects to play a leading role in leading 5G ecosystems with enterprise services like network slicing.
But while the full potential of widespread 5G is yet to be seen, it’s certain that 2020 will be a big year for this revolutionary technology. However, although the impact of higher speed and lower lag time for mobile data will provide a number of benefits for consumers and businesses, it’s also worth exploring some of the lesser known but perhaps more significant ways that 5G will have on society. Let’s start by taking a look at how this technology will affect modern cities and municipalities.
Smart cities will have a 5G-volution
Smart cities have already started to become a reality to some extent. When we say “smart” in this context, we mean data-driven, interconnected, and intelligent. It implies collection of data from installed sensors, analysis of a vast amount of data, simulation of data in virtual environments, and then application of the results into real-world assets to optimize performance of these assets.
We’ve started to make our cities smart by implementing, for example, automated traffic systems to improve traffic flow, or cameras and analytics to increase efficiency. The Cellular V2X standards bring the technical standards to enable autonomous vehicles to communicate with each other as well as with infrastructure, people, and networks, while the 5G connectivity framework delivers the low-latency capabilities and the capacity to support millions of such autonomous vehicles.
This year, however, it will be the expansion of 5G that will allow us to take these to the next level. 5G will become the unifying technology fabric that will deliver the mass connectivity to enable the deployment of millions of the sensor devices required for a city to collate crucial data from different utility systems as well as support the connection and capacity density required. The more data we have to analyze, the more accurate the insights, and the better our ability will be to make cities run more efficiently.
Moreover, 5G will provide faster, more reliable and lower-latency networking connectivity required for many advanced use cases for the IoT, especially in the ultra-reliable low-latency communication (URLLC) and massive IoT categories. Ultimately, this next-generation technology standard will serve as the basis for effective deployment of small-cell networks that can power an extensively interconnected wireless infrastructure needed for a smart city.
New security concerns
5G networks add a new layer of connectivity, but also a new layer of complexity because of the immense number of devices that need to be connected and communicating with each other. When critical assets and infrastructure rely on 5G networks, they must be safeguarded from cyberthreats. In fact, 83% of the Heavy Reading audience considered security one of the most vital considerations for 5G implementations.
Taking our prior example of smart cities, the stakes couldn’t be higher – city services must be protected under all situations, at all costs. While 5G technology is secure by design and has several enhanced mechanisms and capabilities for security, these must be carefully managed, especially in a hybrid environment. 5G is inherently much more secure because of improved encryption protocols and other security functionality, such as an enhanced trust model, key hierarchy, privacy of the Permanent Equipment Identifier (PEI), internetwork security, and interworking security. However, with the adoption of 5G technology by a multitude of industries in 2020, the attack surface will increase multifold, and therefore the risks will become much higher.
Regardless of purpose, every new connected device in 2020 will add to the number of entries in a network that can easily turn into a cybersecurity threat if not managed properly. These threats have different origins, from more advanced attacks from educated cybercriminals to more simple cases of human error. In particular, one area to which today’s rising cyberattack incidents are strongly connected to is the public internet’s vulnerability. A vast amount of highly sensitive data is channeled through weak networks and clouds that were not designed to protect data from such sophisticated threats. This has now led to a situation where there is a need for networks that are private and isolated from the public internet, and networks that can identify and manage elements and assets in their environments in a secure way.
There are also a number of concerns on the regulation side, like how 5G will affect roaming across borders, especially in Europe. These scenarios will need to be discussed and defined in the service-level agreements between operators, businesses, and customers this year. This must also be addressed as far as the liability regarding any problem that might arise with the implementation of this new technology in a 4G world.
New partnerships, new services
Another major consideration facing 5G applications is the question of monetization. Specifically, a big part of 5G’s commercial success will depend on the formation of new partnerships and services in industries outside the mobile industry’s tried-and-tested consumer markets. To cultivate 5G business services, operators will need to be able to engage with customers, third-party service providers, application developers and device partners across a range of industries. Only then will they be able to collaborate in diverse ways to co-create the services required to meet the needs of different industries.
In fact, for these partnerships and services to succeed, mobile operators must invest in and put in place the technologies and processes to monetize these services, and they must ensure that every contributor and external partner in the value chain gets their fair share of revenue. The Heavy Reading survey’s findings of only a 40% score for “good progress” is encouraging, but insufficient.
The research also uncovered a number of other concerns about these businesses’ capabilities of properly monetizing new 5G deployments. A majority of respondents (83%) identified immutability of ecosystem transactions as a somewhat or most important feature of their plan for 5G services, followed closely by the ability to allocate revenue between all partners (78%). However, more than half of those companies (51%) confessed that they have not yet identified, or are only just beginning to identify, their technical requirements for multi-party billing, reconciliation, and payment.
The finding is that the industry needs to redouble its efforts. Without proper plans for monetization and ensuring financial security – so that every contributor to the ecosystem gets their fair share of revenue – 5G ecosystems won’t be able to thrive.
Will your business be a 5G contender?
5G will continue to play a bigger and bigger role this year, with more and more facets of the world being integrated with and powered by mobile. But to realize this future, in addition to preparing for the integration of 5G in smart cities and for the emergence of new security situations, operators will need to cultivate new 5G business services with customers, third-party service providers, application developers and device partners across a range of industries. Our findings show that these steps are crucial if operators are to properly monetize 5G and reap the reward of this revolutionary technology.