5G Is ON
Over the next five years, half of the world will have embraced the fastest Internet speeds that humankind has ever seen. With the evolution of 5G, consumers can enjoy 1 Gbps speeds, HD 4K videos, virtual 3D Image potation and an unparalleled gaming experience underpinned by nascent AR and VR technologies. Unlimited Machine to Machine (M2M) connections will increase productivity, and industries will transform with advances in technologies like autonomous vehicles, robots, and remote diagnostics.
These newly evolved applications require a strong and complex foundation of high-performance computational mobile networks, the infrastructure of which requires round the clock maintenance and frequent upgrades to deliver the best experience to end users.
Mobile network evolution started in the early 90s with 2G, gradually scaling to 3G and then 4G in the 2000s. The network upgrade cycle has shortened to just five years, driven by a rise in consumer demand and preferences and new apps.
For mobile network operators (MNOs) this means an opportunity and a challenge.
The Impact of 5G on MNOs
Frequent network technology upgrades brings revenue opportunities for service providers, but also results in higher OPEX due to maintaining multiple networks, allocating spectrum, launching pricing plans, managing devices, and upgrading personnel skills. Each technology upgrade brings unique benefits, but over time those benefits fade away. For example, after 4G was launched, consumers enjoyed speeds of up to 50 Mbps compared to peak 3G speeds of 7 Mbps. Video traffic exploded after the introduction of 4G and consumers preferences gradually changed to 4G, resulting in a question mark over the importance of dual 3G and 4G data networks.
Is 3G On Its Way Out?
Network technology rollout happens in gradual phases, first covering densely populated areas before extending to the fringes to cover at least 90% of the population. As the penetration of 4G devices increases, operators are providing attractive 4G device, data, and content bundles with incentives for smoother migration of their customers from 3G.
Currently, 50% of operators are seeing more than 90% 4G subscriber penetration.
As a result, service providers are deciding to shutdown 3G in phases, without any service degradation. Shutting down 3G will result in an average of 20% to 30% annual savings in OPEX and enable valuable 3G spectrum to be reallocated.
Does 2G Still Have Value?
2G is the longest-serving mobile technology and 90% of the globe’s operators still run 2G networks. Voice is the basic service running on 2G, despite the popularity of app-based voice and video calls. Traditional voice services still have value due to unique number identification and SMS’s usefulness as a registration tool. Apart from voice, 2G technology was a starting point for high-revenue M2M communications in scenarios like POS (credit and debit card payment machines), fleet management, and temperature control. Despite declining voice traffic and revenues, operators are still keeping 2G networks alive – until, that is, Voice over LTE been widely adopted. With the advancement of 4G technology, all new phones are VoLTE-enabled and thus operators are willing to invest in building capabilities for fully digital high-definition voice and video calls with unique identification numbers. Reliance JIO, China Mobile, AT&T have all deployed VoLTE-enabled calling services, which will result in phasing out 2G networks in the next 3 to 5 years.
The Need for 5G
5G supports ultra-high bandwidth applications and unlimited connections, which is a bottleneck in 2G M2M connections. Though 2G M2M generated high revenues in the past, it’s unable to scale or transform to meet diverse industry needs. Current advancements in AI and data science enable 5G networks to provide unlimited connectivity, sensors, better security, interoperability, and specific solutions for specific scenarios, with far higher interaction capabilities among machines, humans, and business.
For example, smart agriculture applications using 5G will be able to distinguish between crops and weeds and increase crop production by predicted 50%. High computational processing in 5G enhances the VR users experience without the need for bulky devices.
Smart Network Deployment with 5G
Investment in 5G could be massive. In South Korea, SK Telecom is an early adopter of 5G and is planning to spend US$3 billion over the next 5 years to accelerate ROI, which in turn makes it necessary to reduce OPEX by phasing out legacy systems and technology.
2G M2M POS machines will soon be replaced with facial recognition, IoT, and other advanced security systems. In the future, 5G mobile devices will not support 2G or 3G chipsets as they’re no longer cost efficient. 4G and 5G will co-exist for some years as subscribers migrate to 5G in steps.
Read more: 6 Reasons Why LTE is Here to Stay
Smart network deployment with 5G could be game changer for operators if executed successfully and open up unlimited possibilities and new revenue streams.
Huawei Business and Network consulting has developed the tools and methodology. Our 300+ consultants provide considerable expertise in how to ensure simpler, smarter, and cost-effective 5G network deployment and monetization and thus contribute to building a fully connected, intelligent world. Click the link for more information about Huawei’s 5G solutions.