5G standalone is a profitable innovation platform

Premium services based on differentiated 5G connectivity

5G standalone is the gateway to new innovative services and solution; through 5G standalone capabilities, and other associated technologies, you can tailor a connectivity offer to better address the specific needs of consumers and enterprises. With this differentiated connectivity model, you can address specific use cases by programing network capabilities e2e.

Many CSPs are already on the journey to offer differentiated connectivity and new services based on 5G standalone are starting to make inroads in several advanced markets both for consumer and industrial use cases.

For example, Singtel in Singapore is offering its users a dedicated 5G slice to follow the GrandPrix in real-time and high definition in crowded areas during the race. In the UK, King Charles’s coronation ceremony has also been broadcasted with the help of a dedicated uplink slice. The service provider 3 in Hong Kong offers Uplink boost dedicated for influencers. In Taiwan, police patrol cars are connected to a 5G network slice to record in real-time road code infringements. In China, multiple industrial settings are connected with 5G SA and edge nodes to improve operational efficiency. In Spain, the port of Barcelona will be connected by 5G SA to enhance port operations.

No killer app in sight

At the same time many CSPs remain cautious with their investment in 5G standalone deployment, especially in the midband TDD – the frequency layer that enables superior performance – and most of them are holding back massive roll-out in quest of the killer application.

5G standalone as an innovation platform

But what if we change our mindset and instead of looking for a single killer application, we look at 5G standalone, powered by midband TDD as an innovation platform on which multiple services and business models can be realized? What if we concentrate our view on an urban setting to develop a full 5G zone? Would the story change?

To do that, we have taken a broader view and started exploring the different segments that could benefit from 5G standalone and midband TDD in an urban scenario.

In our study, we considered the following service categories.

All the above services are boosted by the new 5G technology, which can enable a varied set of business models serving consumers, enterprises and the city infrastructure itself, boosting the city attractiveness, efficiency, innovation and sustainability.

What would be the return for a first-mover CSP to deploy such services?

Concretely exploring a 5G standalone zone: Madrid downtown

To answer this question, we examined a concrete case: Madrid downtown, within the limits of the M30 highway ring, home to a resident population of close to 1 million, a vibrant enterprise and touristic environment.

In essence, we have looked at the consumers’ needs in that area, at the existing facilities/infrastructures and at the venues/events happening there every year. and we have estimated the addressable user base for the different segment and subsegment categories, modeled a service uptake and the differential revenues CSPs can intercept on top of standard Mobile Broadband services.

Based on the above modeling, the expected adoption curve and the pricing model, we have estimated Madrid downtown addressable revenue for CSPs that exceed 140 M€ for differentiated connectivity in the first 5 years after turning the territory into a full-fledged 5G standalone zone.

The revenue upside for a first mover

The first CSP to introduce the full fledged 5G standalone TDD services has an obvious advantage over the followers as they will be able to attract early adopters and most valuable customers. We have, therefore, modeled the addressable share of users and respective revenues a first mover would intercept.

In the first 5 years, a first mover would be able to intercept differential revenues in excess of 100 M€ across the B2C, B2B, B2B2C and city infrastructure domains.

When considering only the B2C component this would result in an ARPU increase in the range of 12-15%.

 

Looks attractive, isn’t it? But at what cost?

Modeling the differential cost

In order to assess the cost, we evaluated following network components:

• Radio, site and transport costs
• 5G standalone core network
• Orchestration solution to enable network slicing at scale
• Local packet gateways to support city infrastructure use case

To model the delta capacity needed at radio and core network level, we developed a traffic model coherent with the expected service uptake.

On top of that, we considered other costs that a CSP would incur to sell, support and lifecycle manage the services. These include Selling, General and Administrative, Marketing and Operational Sales, In-house operational costs, IT and support costs.

An attractive business case

We than elaborated the overall business case for CSP first mover: > 100 MEUR revenues upside, payback time of 2.5 years and 13MEUR Net Present Value.

On top of the very interesting business cases, deploying the full fledged 5G standalone on TDD will uncover other opportunities, such as the possibility of introducing new services, and extending the value chain beyond the connectivity, by providing platforms and applications and extending the model to other urban areas in the country.

The journey to differentiated connectivity has started, and the advantages for those who will move first are clear!

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5G standalone business opportunities in urban environments

5G standalone