Why 5G will be an intensive learning journey
Embracing 5G is like going to college. It’s a 5-year journey, and you’re excited about what life has in store for you at the end. I see this as a fitting analogy for 5G, as like college, many new things will be learnt on the way and they’ll be plenty of challenges, particularly in the first year as you transition from the class of 4G to becoming a 5G newcomer. Consider 2020 as your freshman year, a time when you are eager to explore and join your customers on an exciting learning journey. Here’s what lies ahead.
The 4G learning curve
Thanks to 4G, we now have access to millions of smartphone apps. The over the top model with universal connectivity for all services, created a level playing field for application developers. All app developers now have access to the same mobile broadband connectivity, and few have needed to interact with communication services providers or technology providers to secure their user experience. As a consequence, the application knowledge and learnings shared between industries and service providers has been limited.
The introduction of Cellular IoT has represented the first step in a transformative journey. Its first wave, Broadband IoT leveraged the same technology (4G), business model (based on traffic or monthly subscriptions), and anchor for connectivity values (SIM cards) as smartphones do. This model allows us to address a subset of the market, but to reach the full potential of 5G and Cellular IoT, we will enter a more learning-intensive phase.
As a communication service provider serving the B2B and B2B2C market, the learning will ramp up during these parallel transitions:
- The expansion of Cellular IoT from Broadband IoT to massive IoT, critical IoT, and industry automation IoT.
- Cellular network technologies expanding from public into private and hybrid networks.
- The introduction of virtual private networks or network slices, adding value to businesses beyond "one slice fits all" connectivity, which as a result opens up room for new business models.
Stairway to 5G
The evolution of use cases from 4G to 5G can be compared to taking calculated steps on a staircase rather than taking one swift elevator trip. This reality became clear when looking at a broad portfolio of use cases, decoupled from the technology required for service delivery. The network capabilities define evolve use cases in three steps.
1) What you could do with classic 4G capabilities from yesterday
2) What you can do with evolved 4G today, and
3) How you can achieve the full 5G experience tomorrow.
When looking at a specific use case through a 5G lens, we see two types. First, use cases that get an experience boost when delivered over 5G. Second, use cases that require 5G to reach the target experience.
The main advantage of starting with 4G, wherever possible, is to gain application knowledge on the road to 5G. This knowledge reduces the challenges and risks when you eventually leverage 5G, as you have some of the deployment and go-to-market difficulties already addressed.
Collaboration and co-creation
The path to creating use cases is an innovation journey with a high degree of collaboration and co-creation between service providers and enterprises. The collaboration and co-creation process for first movers must be highly innovative, as needs, solutions, and business models are rarely crisp from the beginning. These early phases must also include critical stakeholders in the eco-system for devices, network technology, and applications.
Ericsson began to collaborate with external stakeholders for 5G early, starting with large multi-national companies seeking to leverage the next mobile network generation, with a focus on performance-critical applications. What we learned is that an essential part of these collaborations is to align strategic network roadmaps for use cases several years into the future. All of this is done to avoid a scenario where only the networks are ready, but not devices and applications, or vice versa.
The novelty of these use cases calls for extensive use of experimentation and co-creation to validate a use case – starting with the anchor players in the eco-system and using methodologies used by smaller, innovative companies.
From showcase to useful case
The network investments required for 5G are justified by use cases adding value for consumers and businesses. The broad applicability of 5G makes the use case landscape diverse from the start. A typical development journey starts with a capability-centric showcase, at an event or a lab. The next phase is to apply the capabilities used in the showcase to a business problem. Once the need is well defined, an application trial can take place focusing on technology validation and user acceptance. Fundamental market research happens before launch, but late in the process. Once we have taken the required steps, we move from a showcase to a useful case that is ready for deployment.
Communication service providers can leverage the steps taken when introducing 5G in the network for the development of new use cases for business customers. As we observed from 2017 to 2019, multiple iterations took place to move network technology from being novel to commercially viable. A similar journey takes place for first movers in a specific industry until we can consider a use case nailed, meaning it solves a need, and the solution and business model are clear and ready to be scaled for similar cases with predictable outcomes.
How useful a use case is, comes from how far we expect it to scale. Each use case takes time and effort to nail, and its scalability defines its potential. Vital questions to answer in this stage involve identifying the parameters we can tie volume potential to, and the magnitude of the unlocked value. As the new 5G values come from unlocking un-served or under-served markets, we can expect business model innovation to become a central activity for service providers.
Varying use case complexity
The realization of 5G use cases varies in complexity. On the top level, we can group use cases based on 1) deployment and 2) go-to-market complexities. The deployment challenges vary with the size of the leap required in network capabilities and operational procedures. Go-to-market aspects such as eco-system/partner dependencies and monetization models will also come with varying levels of complexity.
In a recent collaboration, Ericsson and ADL analyzed 400 use cases across 10 industries and found 200 use cases that 5G can enable – meaning 5G can significantly enhance or create them. Commonalities in go-to-market and deployment challenges allowed us to group use cases into nine clusters, which jointly serve as a baseline for strategic network planning.
These use case clusters can guide marketing and sales professionals in understanding what type of use cases we can expect for a specific industry and their dependencies. However, across all, enhanced mobile broadband and fixed wireless access represent a logical start, due to their clarity of go-to-market and deployment challenges and straight forward business models. We also see momentum building where both go-to-market and deployment challenges are low. These are important learning platforms, before we take on larger and more complex clusters.
Starting year one is more laborious than finishing year five
We hope this has provided some perspective on the nature of the 5G marketplace. The early stages are learning intensive. Learning by doing is the primary way to drive progress for early adopters. Skipping year one, is not the most optimal approach. Think of the elevator and staircase analogy – and take each calculated step based on where you’ve been, where you are and where you are going - to achieve the most out of the 5G learning journey.
Just like a first-year college student armed with new knowledge, you can lead collaborative co-creation efforts in your next innovative business journey.
Want to know more?
This post is part of our 5G Practitioner’s Guide where we outline 9 strategic conversations service providers should have in 2020 to accelerate 5G for business. Investing time in these topics will make you better equipped to engage in 5G dialogues with your business customers.
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