TCO will be at the center of each journey to 5G Core
I have been working in different positions of the telco industry for some thirty years. But what is happening right now with the introduction of 5G, is about the most interesting time of my career. The markets that can be addressed with this development extends from consumers at one end to industrial and mission critical applications at the other. Programmable networks with a high degree of automation, along with the global trend of digitalization both pave the way for CSPs to take a different position in the ICT value chain and capture more value from new and innovative applications.
Though 5G opportunities are substantial, they do not come without their challenges. As in any technology transition, TCO becomes crucial. For example, adding new technology needs to be balanced with finding new efficiencies in the legacy. The underlying business reality won’t stop either. According to the Ericsson Mobility Report (June 2019), data traffic is expected to grow substantially, reaching 131 EB/month in 2024.
At the same time, the uptake of 5G devices is expected to be much faster than the introduction of 4G was when it was introduced in 2010.
To harbor this traffic growth and the fast uptake of new devices at the same time as exploring new business opportunities really puts managing TCO at the center of the agenda for all CSPs. Existing business and assets need to be protected while, migrating towards the new technology platform and business landscape. Needless to the say the legacy and the new will co-exist for many years to come.
The best of two worlds
At Ericsson, we have applied our vast experience of technology shifts into a new solution we call dual-mode 5G Cloud Core. A cornerstone during the development of this product has been how to manage the TCO during a migration to 5G and how to achieve new efficiencies in the Core Network.
Apart from introducing the new 5G Core (5GC 3GPP release 15) with the new Service Based Architecture (SBA), it is really centered around two key pillars: “dual mode” and “cloud native”. With “dual mode” we have created one common operational platform and view for both EPC and 5G Core, which includes wide implementation of automation to administrative processes. The second key pillar is cloud native, which means that all software is based on microservices and runs in containers on Kubernetes. This doesn’t just apply to the new 5GC, as we’ve also re-designed millions of lines of hardened code in the EPC into microservices. In addition, there are some key Ericsson benefits, like support for 5G peak rates of 20 Gbps/UE and enhanced exposure capabilities.
The above enables substantial opportunities to improve TCO – for example, up to 90 percent OPEX reductions in software upgrades using CI/CD and ISSU (in-service software upgrades). It also enables the CSP to carry out a smooth migration to 5G Core, where to the speed can be in accordance with a chosen strategy, business goals and specific market requirements.
There’s no such thing as a free lunch
The rule of ‘there’s no such things as a free lunch’ also applies here, in that the benefits and value that can be reaped from dual-mode 5G Cloud Core are dependent on the introduction of new ways of working and the development of new skill sets. Change is constant but speeding it up is probably the best insurance against someone else eating your lunch.
My personal view is that the time to start the journey to 5G, and embracing new opportunities, is now. To accumulate learnings in business, technology and network operations will be of tremendous value. And learnings here also include failures, which I believe are a vital asset for knowledge building.
The introduction of the smartphone has been hugely beneficial for our industry. At the same time, it has resulted in a substantial change in our position in the value chain, and growth since its introduction. With 5G and the global trend of digitalization comes the opportunity to improve, adapt value propositions and explore new business areas, at least in the foreseeable future.
Collaboration is key in the future economy. No player can be everything for everybody; different kinds of partnerships will be the rule rather than the exception. The economy is evolving towards an economy of platforms, where studies clearly shows that vertical solutions almost always lose when being exposed to competition from platforms. Networks also need to develop into platforms for value creation in ICT, where network capabilities are exposed to other players and can ultimately become a valuable contributor in existing and emerging ecosystems. I’ve often heard in discussions, comments like “we are going to build an ecosystem”. I think to some extent this has to be challenged. The bottom line is that when others recognize the value of capabilities you offer then you will become a part of an ecosystem, existing or emerging. The key is that your capabilities must be exposed in a way that other developers understand and provide easy support for different business models.
The dual-mode 5G Cloud Core can be one part of the puzzle in migrating to 5G and beating your competition. We at Ericsson are eager to engage with you and are committed to supporting you in your migration towards 5G Core and building a strong TCO efficient platform for the future opportunities in the ICT business landscape.
We have just released a paper looking at some of the ways the Ericsson dual-mode 5G Cloud Core can enable substantial improvements in TCO.
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