Tag: energy efficiency

MWC 2023: You are now in a new industry

The birth of a new sector: “Connected Technologies”

Mobile World Congress (MWC) is the world’s biggest showcase for the mobile telecoms industry. MWC 2023 marked the second year back to full scale after COVID disruptions. With 88k visitors, 2,400 exhibitors and 1,000 speakers it did not quite reach pre-COVID heights, but remained an enormous scale event. Notably, 56% of visitors came from industries adjacent to the core mobile ecosystem, reflecting STL’s view that we are now in a new industry with a diverse range of players delivering connected technologies.

With such scale It can be difficult to find the significant messages through the noise. STL’s research team attended the event in full force, and we each focused on a specific topic. In this report we distil what we saw at MWC 2023 and what we think it means for telecoms operators, technology companies and new players entering the industry.

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STL Partners research team at MWC 2023

STL-Partners-MWC23-research-team

The diversity of companies attending and of applications demonstrated at MWC23 illustrated that the business being conducted is no longer the delivery of mobile communications. It is addressing a broader goal that we’ve described as the Coordination Age. This is the use of connected technologies to help a wide range of customers make better use of their resources.

The centrality of the GSMA Open Gateway announcement in discussions was one harbinger of the new model. The point of the APIs is to enable other players to access and use telecoms resources more automatically and rapidly, rather than through lengthy and complex bespoke processes. It starts to open many new business model opportunities across the economy. To steal the words of John Antanaitis, VP Global Portfolio Marketing at Vonage, APIs are “a small key to a big door”.

Other examples from MWC 2023 underlining the transition of “telecommunications” to a sector with new boundaries and new functions include:

  • The centrality of ecosystems and partnerships, which fundamentally serve to connect different parts of the technology value chain.
  • The importance of sustainability to the industry’s agenda. This is about careful and efficient use of resources within the industry and enabling customers to connect their own technologies to optimise energy consumption and their uses of other scarce resources such as land, water and carbon.
  • An increasing interest and experimentation with the metaverse, which uses connected technologies (AR/VR, high speed data, sometimes edge resources) to deliver a newly visceral experience to its users, in turn delivering other benefits, such as more engaging entertainment (better use of leisure time and attention), and more compelling training experiences (e.g. delivering more realistic and lifelike emergency training scenarios).
  • A primary purpose of telco cloud is to break out the functions and technologies within the operators and network domains. It makes individual processes, assets and functions programmable – again, linking them with signals from other parts of the ecosystem – whether an external customer or partner or internal users.
  • The growing dialogues around edge computing and private networks –evolving ways for enterprise customers to take control of all or part of their connected technologies.
  • The importance of AI and automation, both within operators and across the market. The nature of automation is to connect one technology or data source to another. An action in one place is triggered by a signal from another.

Many of these connecting technologies are still relatively nascent and incomplete at this stage. They do not yet deliver the experiences or economics that will ultimately make them successful. However, what they collectively reveal is that the underlying drive to connect technologies to make better use of resources is like a form of economic gravity. In the same way that water will always run downhill, so will the market evolve towards optimising the use of resources through connecting technologies.

Table of contents

  • Executive Summary
    • The birth of a new sector: ‘Connected technologies’
    • Old gripes remain
    • So what if you are in a new industry?
    • You might like it
    • How to go from telco to connected techco
    • Next steps
  • Introduction
  • Strategy: Does the industry know where it’s going?
    • Where will the money come from?
    • Telcos still demanding their “fair share”, but what’s fair, or constructive?
    • Hope for the future
  • Transformation leadership: Ecosystem practices
    • Current drivers for ecosystem thinking
    • Barriers to wider and less linear ecosystem practices
    • Conclusion
  • Energy crisis sparks efficiency drive
    • Innovation is happening around energy
    • Orange looks to change consumer behaviour
    • Moves on measuring enablement effects
    • Key takeaways
  • Telco Cloud: Open RAN is important
    • Brownfield open RAN deployments at scale in 2024-25
    • Acceleration is key for vRAN workloads on COTS hardware
    • Energy efficiency is a key use case of open RAN and vRAN
    • Other business
    • Conclusion
  • Consumer: Where are telcos currently focused?
    • Staying relevant: Metaverse returns
    • Consumer revenue opportunities: Commerce and finance
    • Customer engagement: Utilising AI
  • Enterprise: Are telcos really ready for new business models?
    • Metaverse for enterprise: Pure hype?
    • Network APIs: The tech is progressing
    • …But commercial value is still unclear
    • Final takeaways:
  • Private networks: Coming over the hype curve
    • A fragmented but dynamic ecosystem
    • A push for mid-market adoption
    • Finding the right sector and the right business case
  • Edge computing: Entering the next phase
    • Telcos are looking for ways to monetise edge
    • Edge computing and private networks – a winning combination?
    • Network APIs take centre stage
    • Final thoughts
  • AI and automation: Opening up access to operational data
    • Gathering up of end-to-end data across multiple-domains
    • Support for network automations
    • Data for external use
    • Key takeaways

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How 5G can cut 1.7 billion tonnes of CO2 emissions by 2030

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The chartpack for this report is available to download as an additional file

Explore this research further by joining our free webinar 5G’s role in reducing carbon emissions on Tuesday November 10th. View the webinar here.

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Transitioning towards a carbon-neutral world

Carbon reduction targets have been set at global, regional, and many national levels to tackle climate change. The Paris Agreement was the first universal, legally binding global climate change agreement. Adopted in December 2015, close to 190 countries agreed the long-term target to limit the increase in global average temperatures to 2 degrees Celsius above pre-industrial levels. The EU also has a binding target to cut emissions to at least 40% below 1990 levels by 2030, as well as achieving at least a 32% share for renewable energy and at least a 32.5% improvement in energy efficiency.

This report will focus on the way in which technology, in particular 5G, can enable individuals, businesses, the energy industry and governments to accelerate the transition to zero carbon emissions.

This analysis is based on desk research, an interview programme and survey with industry leaders, as well as detailed economic modelling to quantify the benefits that 5G can bring, and the contribution it can make to achieving carbon emissions targets.

A framework for thinking through the carbon emissions challenge

The main mechanisms through which technology (including 5G) can reduce carbon emissions arising from our consumption of energy, fall under one of three categories:

  1. Green electricity generation: increasing the proportion of electricity generated from renewable energy sources
  2. Transition to electricity: as electricity becomes greener, moving away from energy that is directly delivered through combustion of fossil fuels towards delivery through electricity
  3. Energy efficient consumption: reducing the amount of energy required to achieve the same outcomes – either by not consuming energy when it is not needed or doing so more efficiently
A framework for outlining the key mechanisms for reducing carbon emissions

Source: STL Partners

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Greener electricity generation

Generating ‘greener’ electricity is a fundamental part of any carbon emissions reduction strategy. Energy analysts forecast that it will still take decades for a substantial amount of the grid to be powered by renewable energy sources. The chart below demonstrates the current prevalence of coal and gas in our electricity networks, with some contribution from nuclear and hydropower. By 2030, we will need rapid growth of wind and solar, but it only becomes a significant proportion of world supply by 2040.

Forecasts predict that future electricity generation will come from growth in solar and wind

Source: DNV

Renewable energy generation must grow enough to meet three challenges:

  • Replace current electricity generation from fossil fuels
  • Provide electricity to power directly supplied by fossil fuels as these transition to electric power (see transition discussion below)
  • Meet future demand arising from economic growth.

Moving from fossil fuels to wind and solar energy presents new challenges for balancing the electricity supply system. Due to the variable nature of these renewables (it’s not always sunny or windy) and our limited ability to store energy (with current battery technologies), the growing dependence on renewables means that supply cannot be controlled to meet demand. New business models enabled by millions of connected devices (washing machines, electric vehicle chargers) will allow us to reverse the market model such that demand meets supply.

Further in this report we describe in more detail how 5G networks will enable the acceleration of greener energy supply by:

  • Improving the cost competitiveness of renewables (in particular, by reducing operating costs).
  • Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply.

Transition to electricity

The second major mechanism to reduce carbon emissions is transitioning to using electricity as the primary source of energy for applications that currently rely on fossil fuel combustion. The two big transitions are the move from:

  • fossil-fuelled cars and trucks to electric vehicles
  • gas boilers to electric heat pumps.

Using electricity to power these appliances and processes is more energy efficient than burning fossil fuels and can therefore deliver an overall reduction in energy use and carbon emissions even if the grid is only partly ‘decarbonised’.

However, this will create a seismic change in energy consumption. Taking the UK as an example, the energy used for heating space and water is almost double that used for total electricity consumption in the country. Space and water heating is largely fuelled by gas today. Meanwhile, transport used over two exajoules of energy in 2018. Shifting these to electricity will put unprecedented burden on our electricity networks.

Comparing UK energy consumption for space heating, water heating and transport to total electricity consumption (2018)

Source: UK National Statistics

As well as the need to meet demand with supply discussed above, the other consequence of moving away from fossil fuels is that it may be more difficult to keep the electricity grid stable. Historically, turbines from traditional power generation stations have provided inertia, which has helped to maintain a buffer when demand for power changes over a short time. Power station turbines’ rotational inertia effectively absorbs and releases energy in response to fluctuating demand, resulting in grid frequency variations. To keep the grid stable and mitigate blackouts, frequency needs to avoid deviating by more than 1-2% from the target of 50 or 60 Hertz. Removing traditional thermal turbine generation means that solutions must be developed to provide highly-reliable sub-second responses – precisely the type of requirements for which 5G was developed.

5G networks can enable the acceleration of this transition from direct fossil fuels to increasingly renewable electricity by:

  • Improving the performance and cost-effectiveness of electric-powered alternatives (for example, by making electric vehicles much cheaper to buy and as convenient to refuel as fossil fuel vehicles through optimised battery lease-and-swap networks)
  • Providing high-reliability, low latency connectivity to the energy suppliers and users committed to maintaining stable frequency across the electricity grid
  • Ensuring that renewables can contribute to the bulk of our energy needs, by supporting new business models ensuring energy demand across millions of appliances is managed in response to the fluctuating nature of renewables supply (for example, by charging electric vehicles or heating domestic hot water when renewable supply is at its peak).

This report is part of a series of research on the role of 5G in accelerating digital transformation. Other reports within the portfolio include:

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