How can you succeed immediately with 5G?

Both consumers and industries know that 5G is relevant. But how do we discuss and illustrate its benefits and features? At the recent 5G World Summit in London, most of the talk centered on use cases, or even better, many different business cases.

5G is use case driven

Head of Marketing & Communications, Business Area Networks

Head of Marketing & Communications, Business Area Networks

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The main difference with 5G compared with previous G:s is that it is very use-case driven.  Yes, it is a technology leap but the focus needs to be on what to do with it, and how to monetize those use cases. And then you build the kind of network that fits the business that you want to build, not the other way around.

The hope that there is one killer 5G application will probably be futile. Instead the build out of 5G will be financed by multiple business cases leveraging new capabilities.

2018 is the year we see the first commercial 5G networks being rolled out, with the strongest subscriptions uptake in North America and North East Asia.

Here, I will share some of the insights from the event and what you can expect from 5G.


There is consumer and industry demand for 5G

Ericsson Mobility Report forecasts that by 2023 there will be:

  • 1 billion 5G subscriptions for enhanced Mobile Broadband (eMBB)
  • Close to 50 percent of all mobile subscriptions in North America are forecast to be for 5G
  • 20 percent of mobile traffic via 5G networks
  • More than 20 percent of the world’s population will be covered by 5G

eMBB will be the first use case category

Numerous service provider executives acknowledged that 5G is needed already for enhanced mobile broadband, and many of our discussions focused on how to practically and efficiently deploy 5G in a cost-efficient manner. 5G has the potential to drastically lower the production cost per byte. This would enable service providers to cater for massive traffic increases by adding capacity in a cost-efficient way while meeting customer demands for network performance.

Fixed Wireless Access (FWA)

There are nearly 2.2 billion households worldwide and less than half are forecasted to have a fixed broadband connection in 2022. “Wireless fiber” with 5G is a more cost-efficient way to provide high-capacity connectivity.  We’ve looked closer at how service providers can build profitable 4G/5G FWA networks in a handbook on fixed wireless access that we published recently.

Industry digitalization

Massive and Critical IoT in combination with 5G enable service providers to address industrial applications. A recent report from Ericsson found that service providers can benefit from up to an additional 36 percent revenue potential by 2026 by digitalizing 10 key industries including retail, financial services, and manufacturing.

Investments in 5G-IoT use cases such as smart factories, connected vehicles, tactile shopping and smart cities will generate up to an estimated USD 619 billion revenue market opportunity globally for service providers by 2026. CTOs of European service providers agreed during our discussions that to realize this potential, industry collaborations are crucial.

What factors will drive the success of 5G with consumers?

Though the unknowns are many and there are still technical issues to be resolved, a 5G future ultimately depends on consumer expectations. Our global research has helped us to understand how consumers both experience and think when it comes to 5G usage.

For instance, 4G speeds are perceived to be stagnating in markets such as South Korea, which is known to be a country with the highest 4G speeds in the world. Consumers need to both experience and perceive incremental improvements in network speeds to feel satisfied with network performance. Evolving the network towards 5G is the key to keeping up with this appetite for higher speeds.

The solution is to build capacity where it’s needed. To solve this, service providers need to understand the difference between average performance and “cell edge” (or worst case) performance. Consumers are more likely to remember bad experiences.

To ensure both consistent performance and cost-efficiency, the deployment of 5G capacity should start with the most congested sites, effectively removing the bottlenecks of the network. Build capacity where it’s needed most and where it will have the highest impact.

Another word of advice to service providers – keep 5G real, especially for early adopters. Manage expectations by marketing 5G services stepwise while continuously evolving the networks.

Lastly, let’s look at how 5G can be deployed in the fastest, smoothest, and most efficient way.

At Ericsson we are supporting service providers with first-mover strategies to turn on 5G already this year. We have defined a natural, step-wise implementation strategy that builds on today’s networks to minimize risk and rollout costs. Ericsson’s end-to-end 5G Platform enables service providers to develop new 5G capabilities at a pace that matches their own business strategy – boosting current 4G business by making best use of existing infrastructure while evolving to the new technology.

Our three primary scenarios are:

5G experience everywhere: This scenario focuses on capacity and wide area coverage. Ericsson’s approach has been to develop the network so that 4G and 5G could exist in the same bands with re-use of existing sites, radio and basebands. It will be possible to have spectrum sharing with 4G and 5G carriers side-by-side in the same band and even with overlapping carriers, by using Ericsson’s so-called “dynamic spectrum sharing” functionality.

5G urban coverage: In this scenario we foresee a buildout of capacity and coverage in urban areas. 4G and 5G will be on different bands, and 5G radios may be deployed at new sites as needed.  Nevertheless, the new 5G radios can be connected to the already deployed basebands, extending the originally deployed 4G radio architecture into a non-standalone 5G architecture.

5G for specific needs: In this scenario a 5G network is built specially for high capacity in dense urban areas and/or localized deployments –  venues, airports, stadiums and industrial sites. In this case we expect that 5G standalone configuration will be the main scenario, which uses the same building blocks from Ericsson Radio System, like radios, baseband and software components that together will create a new radio architecture.

The Ericsson paper on 5G deployment considerations outlines our holistic approach on where, when and how to move to 5G. Have a look at it – or watch our new video on 5G open for business – and let’s continue this dialog.

5G deployment considerations
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