5G-A offers bright prospects for monetizing mobile

MONICA: Many people in the industry regard 5G as missing the mark, but I disagree with this assessment. 5G didn’t fundamentally change the economy, but expectations were set too high. 5G networks are doing well.

All technologies benefit from continuous improvement; once the technology stops moving, that's a sign of failure. When you have a new G, you don't initially know what needs improvement. You just need to go, deploy, and improve. That's the natural cycle. 5G-A is improving on several fronts: greater spectral efficiency, more automation and energy savings, and 5G SA and network slicing as a further driver of performance benefits. [Editor’s note: 5G SA refers to "5G Stand-Alone networks," where both the access network (RAN) and the core are 5G.]

GAVIN: You've cited some improvements there, but essentially are higher bandwidth, lower latency, and greater reliability the key 5G-A selling points?

M: Yes, as they were for 5G: it's a continuous effort. The area where we see the greatest potential for expansion with respect to deployment and revenue is in the enterprise. There, we see a genuine widening of the addressable market and a huge opportunity to get into a new set of services and applications, especially with IoT and the Industrial IoT, or IIoT. That's where 5G-Advanced is important, because when you have automation in, say, a manufacturing environment, then latency, reliability, and the ability to use new frequencies and reduce interference all matter. It's a really bright area for monetization for mobile operators.

G: How important is it that operators find ways to monetize 5G-A quickly?

M:There are two main facets of monetization. Operators can make their networks more cost-effective by increasing efficiency—which doesn't necessarily mean cutting costs, you just squeeze more out of your investment. More efficient spectrum use, greater energy efficiency, and more automation will all help, and this is what 5G-A is working towards. 

The second facet of monetization is getting revenue from subscribers, and that’s a much more difficult issue. It's not primarily a technology problem—we have the tech to support advanced services and use cases, such as network slicing for online gaming. But subscribers aren’t necessarily willing to pay enough to make this worthwhile. You need a business case with sufficient user revenue to justify a network-wide service rollout. That’s very difficult to achieve in most markets.

G: But there is revenue to be had from enterprises?

M: Yes. The question is to what extent mobile operators can capture it. In China, the operators manage those networks, so they get revenue from it. In the US, with CBRS (Citizens Broadband Radio Service), the enterprise tends to run its own networks. If they work with a system integrator, then the system integrator gets the revenues, rather than the operator. 

But there is opportunity there. Private networks allow the enterprise to save in other areas, freeing up investment capital that can be shifted to telecoms. It really opens up a new addressable market. For instance, if you're running a manufacturing company, then instead of hiring more people, you can spend money to get better communication and connectivity infrastructure, allowing you to be more efficient and hire fewer people. 

G: So, do you feel we're at a monetization crossroads with 5G-Advanced? Are you hopeful? 

M: In the enterprise market, it's just a question of time. IoT, and the need to connect not just people, but things—it’s going to happen because the advantages of doing it are potentially huge. What is still uncertain is how fast adoption will be.  

For retail subscribers, it is going to be more challenging. But with the introduction of 5G, we saw that people were not willing to pay extra money for it. It’s not that they didn't see the value. If you ask your friends whether they like XR, the Metaverse, or all these services, they’ll say, “Yeah, it's really cool.” But are they willing to pay for it? Probably not.

Look at video, for instance. In the beginning, nobody was using video; now, it makes up most of the network traffic. But as video traffic increased, we didn't see a corresponding increase in customers’ willingness to pay. So, people are often willing to use a network that might not be perfect, but is good enough to let them do what they need to do. In other words, just because the technology can support these advanced services does not necessarily mean people will be willing to pay for them.

G: Is there a role for ICT providers such as Huawei here, in more clearly explaining and selling the benefits? 

M: Huawei and other vendors are doing excellent work in making networks more efficient, reducing the per-bit cost. Operators have more control over improving cost efficiency by deploying new technology than they do over increasing subscriber revenue, which depends on market demand and requires, but is independent of, network capabilities.

In the industry, we love the technology, and rightly so, because the progress has been astounding. Most people value the service and network availability but don’t care whether the network uses 5G, 5G-A, or MIMO. Everybody out there loves their wireless devices and would never give them up, but they are only willing to pay for what they need and can afford. And we often focus on what the technology can deliver, rather than what users need.

G: And looking into your crystal ball, what do you see five years from now? Where will the biggest transformation and impact lie?

M: Sensing is a new market with great growth opportunity because it uses connectivity and the existing infrastructure in an entirely new way. With sensing, you use the network as radar to see where things are, how they move around. The use cases are still unclear, so maybe five years won’t be long enough to see mass market adoption. Healthcare, traffic management with assisted driving, and manufacturing are the most promising use cases in the short term. 

Another growth area is NTN (non-terrestrial networks). Satellite has been around forever, but has always addressed a niche market. This is a service that retail subscribers would be willing to pay for because it addresses a real need. For instance, if you go hiking, and you fall and need help, you would probably be happy to pay to make a call. NTN addresses the need for connectivity in areas where previously you couldn't connect. It’s very promising, with a lot of very interesting use cases.

Finally, if we look beyond five years, and probably more towards 6G, there’s RIS (Reconfigurable Intelligent Surfaces or intelligent reflecting surfaces). With RIS, you use passive transmission, and again, that's a completely new thing. Timewise, it might be something like MIMO, which everybody was excited about and was around for a long time before we got scalable solutions and commercial deployments. With RIS, you can use passive reflection to transmit your signal and provide coverage in areas where coverage is difficult, using high frequencies and minimal power. That is quite attractive where you have high capacity requirements and dense or indoor environments. It's a new type of connectivity with higher efficiency and capacity density.