The real secret behind 5G-based solution

Tech trends
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The evolution of smartphones and IoT-based solutions is directly linked with the exponential increase of the volume of data generated and shared more than ever. Whereas current 4G-based solution starts to struggle with capacity demanded to manage so much data (especially in streaming video-based analytics and remote virtual & augmented reality scalable solutions), thus the eminent coming of 5G has become in a hope for the real smart-devices revolution in the industry and society. Based in many expert criteria, the 5th generation network is called to be 10 times faster than current 4G LTE solutions. So, everything that runs on the internet will speed up massively, decreasing output time in the future.

Many elements of current 5G technology build on 4G networks, rather than representing a complete departure and that means mobile operators can take an evolutionary approach to infrastructure investment. For instance, operators could begin by upgrading the capacity of their existing 4G macro network by re-adapting a portion of their 2G and 3G spectrum, or by acquiring additional spectrum when available. This way, they can delay investments in 5G by evolving to LTE-and LTE-Pro features, such as the massification of the multiple input, multiple output technology (MIMO).

This evolutionary approach will be the natural path for most operators, allowing them to minimize investments while the incremental revenue potential of 5G remains uncertain. When network upgrades are no longer enough to support the increased traffic, operators will need to build new macro sites or small cells. That point in time will vary by location, but simulations show that most operators will need to embark on significant new build-out between 2020 and 2025 as it can be appreciated in the following figure, being the primary driver behind network cost increases.

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Countries running at least at 50% capacity (source: McKinsey)

At the same time, Telecoms are keenly aware that they will have to increase their infrastructure investments in this technology. Meanwhile, operators will still have to upgrade their 4G networks to cope with growing demand. In an analysis of one European country, Mckinsey has predicted that network-related capital expenditures would have to increase 60 percent from 2020 through 2025, roughly doubling total cost of ownership during that period. This conundrum raises important questions about investment strategy, future profits for mobile players, network sharing opportunities and other business use cases that could reduce cost and risk in the future.Beside the short-term cost/benefits analysis, each generation of technology opens new opportunities for telecommunications, services and industrial players. 5G technology is under testing and poised to launch in some markets later this year. Mobile operators are preparing with a mixture of resignation and anticipation. They know that it will open opportunities to capture value from new 5G use cases and widespread adoption of the Internet of Things (IoT).

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Growing demand related to 5G use cases (source: McKinsey)

Provide high-resolution and bi-directional large bandwidth shaping.Once discussed some potential business use cases, let’s deeply analyze some of the main advantages expected from the 5G-based solution in the coming years [1]:

  • Provide a data speed of more than 10 Gbps which will escalate the download and upload speed.
  • With the increasing network speeds, this will open new doors for smart device technology that may not have been available today such as AI-based real-time video analytics, virtual and augmented reality, among others.
  • Bring consistent and uninterrupted connectivity all over the globe.
  • Latency rate reaching fewer than 1 microsecond for establishment of connections, reducing the traffic load compared to the previous networks.
  • Offer a huge broadcasting data that can easily support more than 60,000 connections.
  • Higher density to support a massive number of connected devices in the ever-expanding Internet of Things (IoT).
  • Multiple services together, such as downloading video and using location services while talking to someone.

On the other hand, the massification of the technology will also be addressing several challenges in the near future. The compatibility with the billions of old devises still in use (especially in the industrial sectors); new facilities installation cost, broadcast distance & building low penetration; lack of widespread coverage (nowadays, many remote areas do not have even 4G connection yet); better battery technologies to avoid over drain/heat or the security & privacy issues are some of the aspect to be solved in the future.

Nevertheless, it’s the turning of a new decade, and 5G is called to become the platform on which companies will build for the next decade of innovation beyond just a new smartphone-based solution. The 5G vision expands so much beyond this, emerging and evolving companion technologies seek to add new dimensions to existing products as well as inspire creative thinkers to capitalize on making their products indispensable by increasing higher engagement between human and smart things. Technology transition creates opportunities for players to disrupt existing ecosystems or invent new ones, becoming a mandatory aspect to consider by many industries such as the health industry, driverless cars, smart home engineering, Industrial IoT and advanced artificial intelligence applications.

In today’s digital world, organizations are increasingly focused on monetizing their data by acting intelligently on business events in real-time. The deployment of 5G networks exponentially boosts the amount of data generated due to the increase in interactions by users and/or devices. This provides a great opportunity for modern enterprises to capitalize on these streams of information by identifying monetization moments and proactively preventing threats and fraud, all in real-time.

With the implementation of 5G, the network slicing market is expected to grow at an exponential rate. Arguably one of the most important features of 5G, network slicing empowers enterprises with end-to-end ownership of a piece of the 5G network, providing portions – or slices – of carrier networks for specific customer use cases. This includes everything from smart homes, Industrial IoT, connected cars, and even smart energy grids. The benefits essentially act as an on-off switch for enterprises, enabling better control, agility, management and security of the network for optimized usage.

On the other hand, enterprises will be able to move faster streaming data, driving events and intelligent connectivity. In order to capitalize on these continuous streams of data, organizations must leverage artificial intelligence and machine learning to analyze volume-heavy data streams, in real-time, to provide the insights needed for data-driven cognitive decision-making. Looking ahead, better business decisions will be made with 5G data closer to the edge, allowing for lower latency and faster decision making. Events driving actions and actions generating new events will make business processes increasingly self-organizing and self-healing. Anomaly detection will also help identify unusual patterns and suspicious behavior that could be indicative of botnet attacks and thwart them in real-time. Looking at the Industrial IoT, detecting anomalies is expected to help reduce unplanned downtime, improve productivity and operational efficiencies, and provide insights to help shape future business decisions and assess risks.

Reaching this point, there is not doubt that 5G-based solutions will be transforming the business rules and players in the telecommunication, industry, mobility and among other markets in the following years. The telecommunications industry historically has centered around big suppliers that control almost all the telco infrastructure over the past decades. This old rule of thumb is undergoing tremendous change. In fact, recently announced the launch of the Qualcomm Ventures 5G Ecosystem Fund to invest up to an aggregate of $200 million in companies building the 5G ecosystem. Cisco Systems is also investing a ton of capital into startups. During the past year, we have also seen a frenzy occurring on the 5G startup investment front, with companies such as Mavenir Networks seeing funding rounds totaling $105.3 million, Affirmed Networks achieving total funding at $155 million, Altiostar raising $357.5 million, along with others. Startups that are addressing existing brownfield challenges in the industry are also seeing an uptick. For example, Parallel Wireless, having raised $8.8 million, builds every component of the cellular network through its evolution from 2G, 3G to 4G [2].

In future posts, we will be continue writing about technology and business trends for enterprises. Furthermore, we recommend consulting the following literature to continue your digital transformation journey:

The objective of this blog is to provide a personal vision of how digital transformation trends will be impacting in our daily activities, businesses and lifestyle.

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[1] https://rizonjet.com/5g-benefits/

[2] https://www.eweek.com/networking/investor-names-top-10-trends-predictions-for-5g-in-2020

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