5G Consumer propositions and benefits

How is consumer 5G doing so far?

With the rollout and commercialisation of 5G consumer tariffs in 2019, it is still early days in terms of seeing new 5G supported services being developed and launched. The most visible services today are currently in areas such as video, gaming, VR and AR. All operators are still in the process of migrating the bulk of their customer base from 3G and 4G to 5G. SK Telecom is one of the few operators that expect 50% of their handset subscribers to be 5G customers by the end of 2022.

Elsewhere 5G customer base penetration varies by market. For example, EE and Deutsche Telekom have 5G penetration rates of 19% and 29% while approximately 6.3% of AIS Thailand subscribers are 5G customers and 4.3% of Singtel subscribers are 5G users.

In this competitive and macro economically challenged environment (with now rising inflation), operators remain challenged in sustaining and growing ARPU as we show in the graphic below. In fact, out of the five operators shown below, only Orange France has maintained a stable ARPU in recent times. This would indicate that operator approaches to promoting and selling 5G connectivity on its own may not offset or grow ARPU for all operators and new approaches towards selling 5G connectivity and new 5G advanced services are needed to re-invigorate service revenues.

Below we outline elements of the 5G consumer propositions currently promoted by Orange France, EE UK, Deutsche Telekom, Singtel Singapore and AIS in Thailand.

Source: STL Partners

Orange France

Orange France launched 5G in December 2020 and currently covers over 1,100 municipalities of metropolitan France. The operator offers consumers very generous 5G plans (compared to 4G tariffs) with inclusive data ranging from 120GB to 200GB, the ability to connect multiple devices anywhere and tethering from the handset. From October 2022, consumers can also enjoy 5G roaming in Spain, Switzerland, and/or Luxembourg.

5G-enabled phones to take advantage of the Orange 5G network

Orange France offers a wide range of 5G-enabled phones, including the Samsung Galaxy Z Fold3, Samsung Galaxy Z Flip3, and the Xiaomi 12. The Samsung Galaxy Z Fold3, for instance, has two different prices: €989 with a €200 deferred repayment if a customer is on a 5G tariff offering (as seen in figure 1), or the customer pays €1,799 for the handset outright without the 5G tariff offering.

Orange France and Samsung offer a deferred repayment/reimbursement policy for customers who purchase select Samsung phones. Samsung will reimburse Orange France 5G customers up to €200 euros if they buy a Galaxy Z Fold3 5G phone, Galaxy A53 5G/Galaxy A33 5G phone, or Galaxy Buds2. Customers are also eligible for trade-in bonus of up to €150 for their old phones when purchasing a new 5G handset. 

Customers purchasing a new 5G tariff subscription before 1 June 2022 can also receive a €15 monthly discount for 12 months. The offer applies to select 5G 120GB, 130GB, or 200GB tariffs. The 120GB plan is a non-binding commitment, while the 130GB and the 200GB plan are binding 24-month contracts. The 120GB plan costs €20.99 per month for the first 12 months and then €32.99/month thereafter. The 130GB plan costs €29.99/month for the first 12 months and €44.99/month thereafter, while the 200GB plan costs €49.99/month for the first 12 months and then €64.99/month.

Orange 5G mobile tariffs

Source: Orange France

Unlimited Video Gaming Services

Orange France offers unlimited video gaming services as part of its 5G consumer propositions. Customers get unlimited access to over 250 games with a Video Games Pass, which is free for the first month and then costs €14.99/month thereafter. The Video Games Pass allows internet, open (internet, TV, mobile) and mobile-only consumers to play anywhere without a console, directly on Orange TV, on PC/Mac, tablet and mobile device. Customers can play with different game controllers like PlayStation 3 or 4 or Xbox 360 or Xbox one. Controllers vary in cost; the Nacon Cloud Gaming controller is €39.99 and the Xbox Series Controller + MOGA (mobile gaming) Clip is €64.99, both with free shipping, Video Game Pass compatibility, and Bluetooth connectivity. Both controllers come with a 2-year legal guarantee for repairs or exchange, including the digital elements integrated into the device itself.  

Orange France also offers a Mobile Game Pass where consumers can download unlimited mobile games with a €2.99 weekly subscription. Mobile games are available on both Android and iPhone and users can enjoy a variety of games free from ads, contract commitments or in-app purchases. To play, customers must access the free Orange games application from the games website or download the Orange Games app available on Android and iOS.  

Orange’s gaming propositions

Source: Orange France

AIS Thailand

AIS customers enjoy the fastest 5G speeds in Thailand according to Opensignal which found average download speeds of 220 Mbps – much faster than its competitors. AIS 5G offers customers services like Disney+ Hotstar, YouTube Premium, Google One, and AIS 5G Play VR.

AIS 5G postpaid proposition

Source: AIS Thailand

AIS content and service features

Disney+ Hotstar is a streaming platform that offers over 100,000 hours of TV content and movies across nine languages, bringing together Hollywood movies and content from Disney, Marvel, Star Wars, Pixar, National Geographic. There are special packages for AIS 5G customers only, costing a monthly subscription of THB 99 ($2.90) and a yearly package of THB 499 ($14.50) ending on 31 May 2022.

AIS PLAY packages for AIS mobile customers include PLAY Premium and PLAY Premium Plus. The PLAY Premium package starts at THB 19 ($0.55) on the first month and THB 199 per month ($5.80) thereafter. The PLAY Premium package comes with six months free Disney+ Hotstar, On Demand movies and cartoons, VIU Premium and beIN Sports Connect. The AIS PLAY Premium Plus has the same benefits as the Premium Package but with an added AIS Karaoke App. The karaoke app is exclusive to AIS customers and allows them to listen to different kinds of music, from Thai and Korean to pop, rock, and indie. There are also specific packages for customers who only want the Karaoke app, ranging from THB 19 ($0.55), with 300MB of data and speeds of 512 kbps, to THB 37 ($1.10), with unlimited data and speeds of 4Mpbs. Overall, AIS Play Premium Plus package costs THB 29 per month ($0.84) for the first month and THB 299 per month ($8.70) thereafter. It also comes with 12 months free access to Disney+ Hotstar.

AIS PLAY packages

Source: AIS Thailand

Google One

Google One is a subscription plan that offers its users additional cloud storage to use across Google’s portfolio of services, such as Google Drive, Gmail, and Google Photos as well as automatic phone backup. Customers get access to Google experts for all things Google, from questions on products to personalised human assistance via live chat and email. The Google One subscription includes exclusive extra member benefits like Google Play credits, cash back on Google products, and special rates on the AIS 5G Max Speed package, with storage space of 100GB. If using an Android device, customers also benefit from automated mobile backups that securely store all your important data like personal photos, videos, and contacts in the Google cloud. Should a customer damage or lose their phone, the automated backup system will enable customers to transfer data from one device to another easily via the cloud. Customers can also invite up to five family members to Google One, making it easier to store and share family data. Customers who register for a package costing THB 699 ($20.40) or more, get free Google One access for the first six months. Those who opt for a package costing less than THB 699 ($20.40), get free Google One access for the first three months. Once the three- or six-month period is over, the cost for Google One is based on data usage from the customer’s chosen package.

Google One

Source: AIS Thailand

YouTube premium

YouTube premium is a subscription service that allows users to watch videos on YouTube without ads, play videos in the background, and to download them to view offline. AIS 5G monthly customers get free YouTube Premium for four months on any package costing THB 699 ($20.40) or more. AIS Thailand offers this on postpaid 5G Max Speed packages. Customers subscribing to AIS 5G Max Speed packages under THB 699 ($20.40) get YouTube Premium free for three months.

YouTube premium

Source: AIS Thailand

AIS 5G Play VR offers consumers the ability to watch VR video content like Thai music videos, performance videos like Moon’s illusion Magic Show and education videos on the Phaya Thai Royal Palace. AIS 5G Play VR is an application that contains the VR content on a customer’s smartphone, while it is the AIS 5G VR Port that offers customers the actual VR experience. Customers on the AIS 5G Max Speed THB 1,199 package ($35.00) or more get AIS 5G Play VR for 12 months and the 5G VR Port for free. For subscriptions costing less than THB 1,199 package ($35.00), customers get the 5G VR Port at a discounted rate of THB 550 ($16.00), and AIS Play VR for 6 months, while the standalone cost of the VR Port is THB 690 ($20.00) without any package. VR music events give customers the ability to view and enjoy music as if they were on stage or at the event itself, with 180- and 360-degree camera views. The VR technology allows customers to have exclusive access to content such as K-Pop idols, and travel all over the world viewing different cities like Athens and Barcelona. Customers can subscribe to AIS 5G Play VR without the 5G Max Speed package; the standard cost is THB 199, but it is currently free for AIS customers until 31 December 2022.

Other 5G benefits, as part of the Max Speed package, include AIS 5G Play AR and 5G cloud gaming. Play AR uses a 3D volumetric camera, which refers to technology that captures a three-dimensional space, environment or object and digitises it, thereby creating the augmented reality. Play AR is only included in 5G Max Speed postpaid packages costing THB 699 or more, with a minimum duration of six months. 5G cloud gaming is also part of 5G Max Speed packages costing THB 699 or more for six months. AIS Thailand also offers both cloud gaming and AIS 5G Play AR as a service without subscribing to the 5G Max Speed package; cloud gaming costs THB 55 ($1.60) per week or THB 299 ($8.70) per month, while the AR subscription is free until 31 December 2022 but usually costs 199 THB.

AIS 5G Play VR and the 5G VR Port

Source: AIS Thailand

AIS 5G Play VR offers consumers the ability to watch VR video content like Thai music videos, performance videos like Moon’s illusion Magic Show,and education videos on the Phaya Thai Royal Palace. AIS 5G Play VR is an application that contains the VR content on a customer’s smartphone, while it is the AIS 5G VR Port that offers customers the actual VR experience. Customers on the AIS 5G Max Speed THB 1,199 package ($35.00) or more get AIS 5G Play VR for 12 months and the 5G VR Port for free. For subscriptions costing less than THB 1,199 package ($35.00), customers get the 5G VR Port at a discounted rate of THB 550 ($16.00), and AIS Play VR for 6 months, while the standalone cost of the VR Port is THB 690 ($20.00) without any package. VR music events give customers the ability to view and enjoy music as if they were on stage or at the event itself, with 180- and 360-degree camera views. The VR experience allows customers to have exclusive access to content such as K-Pop idols. Users can also experience traveling all over the world, viewing different cities like Athens and Barcelona, through the VR technology. Customers can also subscribe to AIS 5G Play VR without the 5G Max Speed package; the standard cost is THB 199, but it is currently free for AIS customers until 31 December 2022.

Other 5G benefits, as part of the Max Speed package, include AIS 5G Play AR and 5G cloud gaming. Play AR uses a 3D volumetric camera, which refers to technology that captures a three-dimensional space, environment or object and digitises it, thereby creating the augmented reality. Play AR is only included in 5G Max Speed postpaid packages costing THB 699 or more, with a minimum duration of six months. 5G cloud gaming is also part of 5G Max Speed packages costing THB 699 or more for six months. AIS Thailand also offers both cloud gaming and AIS 5G Play AR as a service on their own; clouding gaming costs for THB 55 ($1.60) per week or THB 299 ($8.70) per month, while the AR subscription is free until 31 December 2022 but usually costs 199 THB.

Singtel

Singtel launched 5G services in September 2020 with its 5G non-standalone (NSA) network. In May 2021, it launched its 5G Standalone network, and now promotes advanced content rich services such as Bookful, Melody, and RiotGo.

Bookful

 Source: Singtel

Bookful is a digital augmented reality (AR) reading app for children aged ten and under. The books are animated and characters, such as Peter Rabbit, are brought to life through AR and 3D animations. Bookful includes popular child friendly titles like Barbie, Sesame Street, and Dinosaur Days. Select Singtel postpaid and SIM-only customers can subscribe to Bookful. The service costs SGD 8.90 ($6.50) per month without a contract. 5G customers (subscribing to XO plans 68 or more) get three months free while postpaid (4G) customers on select tariffs can qualify for a one- month waiver. 

Melody

Source: Singtel

Melody is a virtual reality live music streaming service. Customers can watch shows by global artists like Imagine Dragons and Kelly Clarkson, as well as live music experiences from their phone or headset. The service is free for the first three months for Singtel postpaid mobile customers on a 5G subscription then costs SGD 8.90 ($6.50) per month with no contract requirement. Non-5G customers pay SGD 8.90 ($6.50) per month, with the first month free.

RiotGO (Riot Games)

Source: Singtel

RiotGo is an exclusive gaming bundle that Singtel offers its consumers giving them access to in-game content every month (free for the first three months). Customers receive data-free gameplay for mobile games such as League of Legends: Wild Rift. Riot Games League of Legends is an online multiplayer battle video game that operates globally on cloud-based virtualised live-production workflows. RiotGO is available to Singtel postpaid mobile customers and SIM Only plans. Both 5G and non-5G customers pay SGD 6.90 ($5.00) per month for the service. However, non-5G subscribers get the first month free, while 5G customers get the first three months free

Singtel also offers customers RiotGO+. This is the same as RiotGO, but RiotGo+ subscribers receive an extra 1GB of data for Riot Games. Non 5G RiotGO+ customers get one month free then pay SGD 9.90 ($7.20), while 5G subscribers get three months free then pay SGD 9.90 ($5.70). Both RiotGO+ subscriptions are also without contracts.

EE

Exclusive 5G phones

Source: EE

EE’s latest smartphone tariffs include a range of smart benefits which are not entirely exclusive to 5G. These smart benefits include Apple Music, Apple TV+, Apple Arcade (with an offering 180 mobile games), BT Sport Ultimate, and Video Data Pass. Other promotions bundled to EE 5G smartphone and tariff plans include limited period subscriptions to YouTube Premium and the Xbox Game Pass. STL Partners May 2021 report Monetising 5G with consumers: what are the options? highlighted these 5G tariff benefits.

Gaming

EE offers a 5GEE home router broadband service, which enhances the customers’ gaming experience by improving connectivity and data transmission. To buy the 5GEE home router, customers can choose the 500GB 5G data plan or the unlimited 5G data plan. Both are 18-month contracts, with a £50 upfront cost. The 500GB plan then costs £45 a month, while the unlimited 5G data plan is £50.

The Xbox Game Pass Ultimate is a gaming add-on costing £10 per month that comes with an Xbox Live Gold gaming subscription, offering over 100 games with new games added every month. The exclusive Xbox bundles include the Xbox Series X Gaming Bundle from £31 per month and the Xbox Series S Gaming Bundle from £21 per month. EE offers these benefits to 5G mobile customers and 5GEE home broadband customers. It also includes the Xbox Gaming Pass Ultimate in the Fibre Max 500 or 900 plans, with up to 20GB mobile data boost for fibre customers with an EE 5G phone plan.

5G home router

Source: EE

In June 2021 EE also launched two Gaming on the Go Pit Stops in two 5G locations (Brighton seafront and Liverpool Royal Albert Dock) to promote the release of its new Xbox Game Pass Ultimate add-on. The Pit Stops are custom-built benches that allow EE 5G customers to make full use of the 5G network through uninterrupted gameplay and superfast gaming chargers. The aim is to help gamers return to outdoor gaming, as the operator cited three quarters of gamers in 2020 had gamed outside of their home, with a fifth doing so while also on their mobiles. Apple Arcade is also one of the Smart Benefits available (to Apple iPhone Full Works customers), worth £4.99 a month offering 180 free games with no advertising and no in-app purchase.                                                            

Exclusive Xbox bundles

Source: EE

BT Sport Ultimate App

The BT Sport App uses Augmented Reality (AR) across Apple’s 5G iPhone range. Since October 2020, the app comes with features such as Watch Together (with three other friends); 360-degree camera angles with pinch and zoom options; Stadium Experience – an AR experience of select stadia areas such as dressing room, tunnel and dugout; Match Day Live – AR layer of team line-up, formation and in-game statistics, Manager Mode – adding further real-time stats such as mini-map tracking of team formations, and player speeds.

BT sport ultimate

Source: BT

5G Edge XR

BT and EE aim to bring further 5G extended reality (XR) innovations to live sports and performing arts through its 5G Edge XR project, which prototypes interactive real-time mixed reality content overlays for smartphones, tablets and VR headsets. The use cases include live events such as rugby, boxing, MotoGP, dance/music/theatre, and football. BT Media and Broadcast TV also support outside broadcast (OB) services which use 5G and edge connectivity to deliver live video feeds of events to TV broadcasters. For example, the XR Rugby broadcast overlay features include game data overlaid onto players, ball trajectories, gain-line visuals, kick distances, possession data and alternative camera viewpoints. Other features include game commentary from supporters, localised stadium advertising and route-finding information to the stadium.

5G Edge XR

Source: 5G Edge-XR

Parallel hybrid 5G-powered music event

In summer of 2021, EE and Beatport (online music store) joined together to stream live concert DJ sets from various music venues in city locations like Liverpool and Manchester. Travellers have the option to attend the event or watch the live stream from the 5G powered night club.

Beatport and EE present parallel, the UK’s first 5G event

Deutsche Telekom

Deutsche Telekom (DT) postpaid customers can purchase 5G phones both with and without a fixed contract. 5G tariffs such as Magenta Mobile S start at 6GB €39.95 per month on a 24-month contract term. Inclusive benefits include EU roaming and HotSpot Flat Rate. Other benefits include StreamOn Gaming and StreamOn Music (for free) plus Apple TV+ (3 months free). Other tariffs such as Magenta Mobile M 12GB cost €49.95 per month on a 24-month contract, with the same benefits offered. DT recommend the Magenta Mobile L tariff with 24GB inclusive data at €59.95 per month. Benefits include Apple TV+ (free for 3 months), StreamOn Gaming, StreamOn Music&Video, and StreamOn Social&Chat (all for free). The most expensive tariff is Magenta Mobile XL with unlimited data for €84.95 per month, which includes all the same benefits as Magenta Mobile L. All tariffs include a Disney+ by Telekom option free for 1 month. Additional options with DT’s 5G postpaid tariffs include Disney+ and Apple TV+.

Offerings with MagentaMobil

Hybrid wireless connections

Since 2014, Deutsche Telekom (DT) has been offering MagentaZuhause with hybrid based on LTE (4G). Now, DT is launching a hybrid fixed access and mobile access 5G broadband solution with its Speedport Smart 4 router. As DT highlight “the difference between hybrid 4G and hybrid 5G is that the antenna modules for receiving the mobile signal are no longer installed in the router, but in an external unit – the 5G receiver. This is because the higher 5G frequencies hardly ever get inside the building and the received signal is therefore too weak for high-performance transmission”. The Speedport Smart 4 is a Wireless Local Area Network (WLAN) router that becomes hybrid-enabled when connected to an outdoor 5G receiver. This hybrid combination provides more bandwidth and a more stable home network which act as a back-up if the fixed service connection drops, or in areas where fibre connectivity is yet to be rolled out. DT has not yet decided on pricing for the 5G receiver. The operator is currently giving up to 800 customers the opportunity to partake in a field test where participants can obtain an out-door 5G receiver free of charge until August 2022. Qualifying customers must already have an existing DT fixed-network line with a MagentaZuhause (Mobile Home) rate plan and 5G reception. The cost of the Speedport Smart 4 is €5.95 as part of the ‘Smart home network package’, or customers pay a one-time fee of €169.99.

Hybrid 5G connection diagram

Source: Deutsche Telekom

Virtual and augmented reality

Source: Deutsche Telekom

Deutsche Telekom has been experimenting with VR and AR for entertainment in areas such as air hockey and basketball. Customers can play AirHockey on a virtual table three metres long in an AR environment on their phone. To do so, they must use an AR marker (which is an image or object that players create through an AR mobile app) to superimpose the AR features. Customers then open the game app, create a game session, and connect the two players’ devices together. Some AR experiences may require virtual reality glasses to immerse the customers in the experience. Customers can also partake in AR basketball simulation on their smartphones. If both players have a 5G smartphone, they can place a virtual basket wherever they want and use their smartphones to throw the ball into the basket. Through AR glasses like NREAL, DT also enables customers to watch the news over a 3D projection, while VR glasses allow customers to experience 360 concerts with MagentaMusik.

5G cloud gaming

Source Deutsche Telekom

DT launched its cloud gaming service, MagentaGaming, in 2020. Customers could game on the 5G network, resulting in a user gaming experience that paralleled consoles like PlayStation or Xbox. However, in February this year, DT discontinued MagentaGaming cloud gaming service and now offers StreamOn Gaming, a service that allows customers to play video games of other companies like NVIDIA GeForce NOW, with zero rating of inclusive data. This is not explicitly a 5G service.

Live video productions

In partnership with the German TV/media group RTL Deutschland, Deutsche Telekom (DT) is testing the production of live video content in their 5G standalone network through network slicing technology. Consumers can use the virtual network to broadcast data-intensive events like concerts, football matches, or any other live action environment.

5G for business: An update on telco pioneers

SK Telecom, Verizon and Telstra have looked to expand their 5G networks and to provide businesses with more opportunities to take advantage of 5G. But new developments have not been ground-breaking and adoption of 5G, while growing, is off a low base.

Changes in 5G business propositions

Last year we published a three-part series taking an in-depth look at how early adopters SK Telecom, Verizon, and Telstra had evolved their approaches to 5G commercialisation since launch. This article will focus specifically on how they have grown their 5G business and enterprise propositions since the publication of those reports.

Each of the three operators has pursued a slightly different 5G strategy, reflected in the way they have enhanced their offering of 5G for business over the course of 12 months. SK Telecom has continued to promote its 5G cloud offerings and to develop its 5G-enabled smart factory solutions. Verizon has looked to expand its network coverage by adding mid-band (C-band) 5G to its spectrum ranges and is also emphasising MEC solutions. While Telstra continues to promote 5G as a part of its ‘advanced network’ foundation (though there is evidence that 5G, specifically, is enabling Telstra to broaden its solution portfolio, e.g. it has launched a new on-premise dedicated 5G network for business).

SK Telecom

Enterprise is one of five “business groups” that SKT has recently prioritised to “maximise corporate value” (drive revenues). Specific SKT Enterprise Group plans include:

  • To build data centre capacity, with integrated MECs at new sites.
  • To leverage 5G MEC, AI technology and hyperscaler collaboration to grow the cloud business (it will make equity investments to expand this internationally).
  • To extend services in select verticals – Smart Factory, Finance and Security – combining its own AI technology and its digital infrastructure (5G, Cloud and IoT).
  • Its commercial 5G offerings available on the market broadly reflect these priorities.

5G cloud products

SKT continues to promote “5GX Cloud” as the lead 5G solution area on its website. Its suite of solutions includes 5GX Public Edge (leveraging hyperscaler partnerships) and 5GX On-Site Edge (a private MEC environment for companies that require extra secure real-time data processing or cost-efficient high-capacity data transfers). 5G and MEC are explicit as the foundations for these propositions.

Recently, SKT has teamed up with Dell Technologies to launch an enterprise 5G MEC solution called “Petasus”. It combines SKT’s 5G MEC solution and Dell PowerEdge servers. The solution provides network virtualisation features designed specifically for MEC, as well as associated operational tools. SKT promotes MEC as an essential technology for application areas such as smart factories and autonomous driving (due to its ability to enable ultra-low latency communication).

5G vertical services

SKT has been building a portfolio of offerings under the 5GX Smart Factory banner. Since the previous report it has added the following solutions:

  • TV live caster: A 5G-enabled HD video control solution capturing feeds from smartphones, drones and cameras. It can be used for safety management, remote tech support and live broadcasting from public and industrial sites.
  • Die-Casting Manager: A service for die-casting facilities where thermal monitoring equipment is used to monitor operations for early problem detection and optimisation of production conditions.
  • Welding Quality Inspection Manager: A solution leveraging Acoustic Emission (AE) sensors, Machine Vision cameras and AI to determine not only external welding defects but also internal problems with industry-leading accuracy. This enables enterprise customers to reduce costs, increase work efficiency and maintain high production quality.
  • Machine Vision Solutions: Quality inspection solutions using 5G, AI and MEC tech to detect defects in the appearance of a product using AI-trained models and take appropriate action on the production line based on the results.

Figure 1: SKT Machine Vision Solution

5G business

Source: SK Telecom

Corporate actions regarding the finance and security verticals appear less 5G-inclusive at this stage. While it is leveraging AI with Kookmin Bank in the finance vertical, there does not appear to be a role for 5G in this space yet. SKT announced its intentions to become the market-leading “ICT-based convergence security specialist in Korea” in 2021 when its SK Infosec entity merged with ADT Caps. It plans to “create a safer society and lead the future security industry by combining 5G, AI and Big Data analysis technologies with convergence security and quantum cryptography technology”. STL will be watching this space.


Verizon

Over the last year, Verizon’s approach to commercialising 5G for business appears to have progressed. It has been building out its network and seems to be focusing on two main areas for monetisation: fixed wireless access and 5G Edge. It also promotes 5G’s suitability for public/ emergency services provision, though specific solutions are not evident.

5G mid-band

The most significant development that has taken place for Verizon has been the addition of mid-band (C-band) 5G to the spectrum ranges that make up its 5G Ultra Wideband (UWB) proposition. Verizon launched 5G on mmWave spectrum due to its promise of high speeds and low latency, but quickly came in for criticism as it was difficult to secure coverage given that mmWave network signals struggled to negotiate buildings and other infrastructure. This significantly limited 5G adoption.

Mid-band spectrum has become the entry point for most 5G implementations since Verizon’s launch as it offers speed and latency performance improvements over 4G, whilst being easier to propagate. Verizon’s mid-band purchase is intended to address the problems with Verizon’s UWB and expand 5G coverage.

The mid-band spectrum has been deployed more quickly than anticipated. By January 2022, Verizon announced that 100 million people were covered by its 5G UWB. It is expecting that 175 million people will be covered by the end of 2022 – a year ahead of schedule.

Figure 2:  Verizon 5G coverage map May 2022

5G business

Source: Verizon

5G UWB FWA

Verizon is currently promoting a 5G UWB fixed wireless solution as an alternative to fixed line business broadband. Its extended UWB footprint has increased its addressable market. It is trying to win market share from fixed line players with a commitment to keep its pricing unchanged for 10 years.

5G Edge

5G Edge is a focus for Verizon (the cloud opportunity appears more closely scoped than at SK Telecom). There are two variants of 5G Edge services: Public and Private MEC.

Public MEC

Verizon has expanded its 5G Edge Public MEC (Multi-Access Edge Computing) capabilities over the last year. Public MEC leverages AWS Wavelength and brings AWS compute and storage services to the edge of Verizon’s wireless network. In August 2021 it was available in 10 locations across the US and, as of January 2022, it was available in 17 locations.

Verizon provides examples of how businesses are utilising 5G Edge Public MEC to demonstrate how it can be used and to promote uptake. For example, Aetho (the company behind Beame AR telepresence solutions) is using Verizon 5G Edge with AWS Wavelength to offer students and prospects of Morehouse College virtual tours of its campus and remote learning tools. It is unclear how many companies are taking advantage of 5G Edge Public MEC, and how accessible it is to the average company.

Private MEC

Verizon has added to its Private MEC offerings since STL’s report was published in April 2021. On 31st August 2021, Verizon announced it was offering businesses an on-premise private edge compute solution that enabled ultra-low latency and allowed real-time enterprise applications.

5G vertical services

One vertical that Verizon is focusing on is the Public Sector. Specifically, it appears to be concentrating on 5G-enabled solutions for first responders. Developments are underway in the 5G First Responder Lab, a collaboration between Verizon and ResponderXLabs. Verizon says that its 5G UWB will support a range of next generation capabilities for public safety, including; real time intelligence, critical training preparedness, next-generation communications, remote asset operations and augmented reality (AR) on-the-job support.

Verizon has recently formalised its strategy to target stadium and venue customers with 5G enabled solutions to enhance the fan experience and public safety. It has started to promote a Crowd Analytics solution (which uses Public MEC capabilities) to enable better customer experience at venues and stadiums, for example analysing guest traffic to help reduce waiting times in key areas. This is likely to be a B2B play, where the services are provided by the telco to the event organiser/ broadcaster. The strategy leverages Verizon’s private 5G technology and supports its private networks, mobile edge compute and business solutions vectors of growth.

A further vertical service is Verizon’s 5G Edge Automated Guided Vehicles Management solution. This is designed to facilitate robotic fleet management for customers such as manufacturers and warehouse and logistics operators. It leverages on site 5G connectivity (private 5G network) and private mobile edge computing (the MEC is at the company location).

Telstra

Telstra’s approach to 5G for business remains to position it as part of Telstra’s “integrated solution stack based on network foundations”. In general, 5G is not singled out as a prominent component of any offering, but it is listed as an option for those businesses with specific requirements. For example, Telstra’s Adaptive Mobility connectivity plans are marketed as 5G-compatible, with “add-ons” like the Adaptive Mobility Accelerator leveraging 5G if the device and coverage allow, though it is not 5G-dependent. There is no change in this regard since last year’s report.

5G FWA

Telstra promotes its Enterprise Wireless offering as bringing together “our investment in our 5G network rolling out in selected areas, simplified mobility plans, enterprise grade endpoints and managed services.” It has introduced an Enhanced Enterprise Wireless version of the service, which includes service level agreements and managed services, allowing the customer to connect to “dedicated enhanced infrastructure”. This Enhanced version is one of the few examples where a service is 5G-dependent.

Figure 3: Enhanced Enterprise Wireless

5G business

Source: Telstra

Private 5G for business

Telstra has begun offering a “dedicated private network” solution. In January 2022, Telstra and Ericsson announced the first deployment of an on-premise dedicated 5G network for business that leverages its “single-server dual mode core”. The core facilitates both LTE and 5G Standalone (SA) simultaneously, which means that 5G SA capabilities can be accessed to offer a “wireless connectivity platform for enterprise than can deliver low latency, enhanced resilience and the capacity to meet even the most demanding business operation requirements” when relevant devices are available. This should bring the full benefits of 5G for business to fruition.

5G edge

Telstra does not emphasize 5G in its cloud propositions, though it is mentioned as a connectivity option. It is also mentioned in connection with multi-access edge computing solutions.

  • Telstra has started trials of Australia’s first 5G-enabled edge compute solution for businesses, in collaboration with Ericsson. The solution is being explored in the Telstra Retail store environment, where a smart video solution is issued to simplify operations and enhance customer experience.

Telstra promotes its ability to tailor cloud offerings through its “technology services”/consulting entity, Telstra Purple. This may result in an increased consideration/inclusion of 5G as part of a cloud solution.

Conclusions: Incremental changes are evident, with MEC initiatives dominating

The portfolios of early adopters of 5G have not been radically revised over the course of the year or so, but they have each looked to improve their 5G business offerings. The improvements they have made have largely been in line with their initial 5G strategies. SK telecom has expanded its range of technologically advanced 5G solutions to address specific use cases. Verizon has looked to redress T-Mobile’s dominance in terms of 5G network coverage. Telstra has positioned itself as capable of addressing customer’s unique needs through its deployment of flexible technology solutions that can be tailored to enterprise needs.

Figure 4: How telcos are commercialising 5G for business


5G business

Source: STL Partners

One area that has seen significant developments is MEC. All three operators have expanded their MEC offerings and have clearly identified this as an important source of revenue in years to come. 5G-includive vertical solutions have become more prominent over the last 12 months, further contributing to 5G monetisation. Operators are also focusing on developing and monetising their private network solutions, which is something we will continue to follow closely.


Policy & Charging in the 5G era

Increasingly agile and programmable networks are giving operators new ways to deliver benefit for their customers. Policy and charging network functions are key levers for enterprises to deliver the next generation of network services. In this article, we explore how these functions will be fundamental to driving greater revenue, speed and control for operators. 

Patrick Montague-Jones, Senior Consultant  

What is policy control? 

Network policy control is the process of creating, implementing and maintaining rules in the network to determine how the network, data or services should behave. The rules have influence over network Quality of Service (QoS), access and data control and in-life service tracking. These end-to-end rules ensure structured and efficient operation of the network, increasingly important traits as operators virtualise and expand their networks. 

What is charging? 

 Charging is a network function that monitors usage of products and services and generates records based on this. Charging can come in two main models: offline and online. Offline charging monitors usage and processes the charge at the end of a given session or timeframe. These charges then flow down and are reflected on the bill. Online charging processes data and service usage in real time and customers can view their bills in real time too. Where a customer follows a pre-paid model, services may be impacted if the user does not have sufficient funds. 

How have these systems transformed by 5G? 

As operators virtualise their networks in preparation for the next generation of solutions and a chance to increase revenue, policy control and charging systems have been central to this transformation. Customers are looking for flexible, scalable service and operators need systems to support this demand. Moreover, ability and desire to manipulate the network, both from operator and customer perspective, has increased.   

The new wave of mobile connectivity, 5G, has ushered in change in this respect. From an architectural perspective, policy and charging functions sit in a consolidated function for 4G. For 5G, however, the PCRF (Policy and Charging Rules Function) has been bifurcated, into two discrete functions and takes direct input from more network functions. The reduced number of hops will serve to reduce network latency. From a business perspective this means that operator decisions can be optimised for policy application and network resource allocation. 

5G Charging and policy

What are the benefits of combining the two functions? 

Operator transition to cloud-native technology platforms and an increasing vendor willingness to offer open platforms means IT stacks can work in concert with far less integration work. This model supports ‘best of breed’ approaches, where operators choose the best vendor for a given module based on the features available. With the possibility of interweaving different vendor solutions together with decreasing complexity, operators may wonder what benefit efficient policy control and charging systems might bring them. 

Operator revenue opportunity – use of agile and scalable systems means that operators will have new means of monetisation. The policy control function will be able to track and enforce policy on a deeper level. This applies across B2B and B2C segments. In B2B, an operator could apply a different QoS to devices based on location (e.g. inside the customer manufacturing plant vs back office) over the same network. Charging can also progress to become more tightly linked with customer outcomes (e.g. a price per successful hour of uptime; price per successful VoIP call). Customers may see this as more equitable and a step change in operator approaches to demonstrating direct business value. Operator commercial and technology teams must collaborate to understand what metrics will be the most useful to apply policy and charges on for end customers. 

Quick provisioning and charging – customers increasingly expect services to be provisioned and data to be available in real time. As network slicing becomes more prevalent, businesses are likely to want specific slices spun up at will to cover specific use cases. One such example might be a 5G slice, with specific QoS requirements, for broadcast at a live music or sporting event. Network customers will want to ensure that all footage is received without interference from mobile users in the venue and quickly transmitted back to the base station. Operators will want to charge in real time for these services and so a ‘hand-in-glove’ relationship between policy and charging is vital. 

Service granularity – next generation policy and charging systems have created greater network visibility and control than ever before. Turning data into real insight is a challenge that telcos have faced for many years. The next step in this journey is understanding that insight to drive tailored offerings that are relevant to end customers. Policy can be applied to a network based on location, time of day, current data usage in the billing period. For example, a consumer’s network speed could be throttled if they consume more than their data allowance in a month.  This could apply to both B2C and B2B customers. For the B2B sector, in a manufacturing facility a higher QoS could be applied to the production line than to devices located in the administrative back office. The real challenge for operators is to decide on which policy metrics to apply charging. Getting this right will ensure an equitable transaction where the operator is generating revenue on a service that the customer feels is being charged for on real business outcomes. 

Learn more about our work on new 5G policy and charging

How STL Partners Consulting can support you

STL Partners has developed industry-leading expertise, backed by extensive thought leadership, and supported telecoms vendors in identifying the best approach to engage telcos on the topic of 5G.

There are three main ways we can do this:

  1. Strategic positioning: Evaluating how telcos are thinking about their IT evolution with 5G, and analysing how vendors can support in their roadmap and address key pain points stalling growth
  2. Business model development: Developing potential business models for new strategic opportunities, including potential go-to-market strategies
  3. Customer engagement: Creating thought leadership and (marketing and/or sales) collateral that can accelerate engagements with existing customers and new prospects

Get in touch to understand how STL Partners can support you:

patrick.montague-jones@stlpartners.com

Or visit our website to discover more about our consulting work and expertise:

http://www.stlpartners.com/consulting

The sustainability scorecard

About the sustainability scorecard

This sustainability scorecard benchmarks the performance of a selection of companies against seven sustainability-related criteria, and is designed to highlight the areas in which the listed companies are more and less mature in their sustainability strategies. The companies listed includes telcos and small selection of others in adjacent industries (technology, infrastructure).

It supports telcos and their partners to:

  1. Benchmark sustainability performance against competitors
  2. Understand areas of relative strength
  3. Highlight areas that require greater focus in order to guide future sustainability strategies

Our list of companies are scored against seven sustainability criteria including:

1. Structured sustainability reporting. Whether the company has history of publishing sustainability reports over a period of time shows a sustained commitment to sustainability.
2. Sustainability commitments and incentives. Evidence of board level incentives tied to ESG targets demonstrates that the organisation sees achieving sustainability targets as core to its long term competitiveness.
3. Public reporting on scope 1, 2 and 3 with associated emission reduction targets.
4. Green finance. This includes the issuing of green bonds or sustainability linked bonds.
5. External recognition of social initiatives to highlight the full spectrum of ESG initiatives.
6. Commitment to biodiversity.
7. Enablement. Companies that are committed to enabling their customers to reduce their carbon footprint will have concerted initiatives that are delivering measurable benefits.

Companies included in the scorecard

1. Telefónica
2. Verizon
3. Proximus
4. KPN
5. SK Telecom
6. Amazon
7. Apple
8. Vodafone
9. Deutsche Telekom
10. Swisscom
11. Google
12. TELUS
13. Elisa
14. Sony
15. Softbank
16. KDDI
17. Orange
18. AT&T
19. BT
20. Meta
21. Microsoft
22. Telia
23. Millicom
24. Bell
25. Singtel
26. MTN
27. America Movil
28. Telenor
29. Cellnex
30. Saudi Telecom Company
31. T Mobile
32. China Mobile
33. Telkom Indonesia
34. Telstra
35. Rogers
36. Netflix
37. Tata Communications
38. Globe
39. China Telecom
40. Bharti Airtel
41. American Tower Corporation
42. Veon
43. MTS
44. Jio
45. Digicel

Read more about sustainability

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5G’s role in reducing carbon emissions – over 1.6B tonnes by 2030t

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Private 5G: Industry 4.0 use cases

Private 5G: Industry 4.0 use cases

This article illustrates key use cases and applications that will be relevant for industrial companies looking to transform their operations through private 5G.

Introduction

  • Private 5G technology builds the foundation for more effective industrial operations in the future through IoT and AI/ML applications.
  • In this article we look at private 5G use cases that can be deployed throughout industry, including manufacturing, logistics, and oil and gas.
  • We are already seeing early deployments of private 5G networks
    − In April 2021, Verizon announced its first European Private 5G deployment with Nokia for Associated British Ports (ABP) at the Port of Southampton, one of the UK’s busiest ports that exports £40 billion worth of manufactured goods from the UK every year.
    − Spanish transport infrastructure company Ferrovial launched one of the world’s first private 5G standalone (SA) networks in October 2021, to support a number of use cases at a site constructing a tunnel under the River Thames.
  • Besides the technical capabilities of private 5G over other alternatives, one of the primary benefits of private 5G is to help consolidate number of communication solutions or interfaces deployed on an industrial site. This is about being able to support multiple use cases on a single network, rather than having to manage and operate multiple different solutions, each often tied to a single use case, which results in higher complexity and overall total cost of ownership.
  • Furthermore, the advanced capabilities of private 5G, specifically its reliability, throughput, security, and ultra-low latency can enable new use cases and applications such as real-time command and control, analytics, mass-scale IoT, and machine intelligence. These capabilities can in turn prepare industrial sites for new 5G-enabled applications that can digitally transform their operations in the future, such as predictive maintenance, autonomous mobile robots, and asset tracking.
  • This article looks at key use cases that will be relevant for industrial companies looking to transform their operations through private 5G.

Private 5G

1. Advanced predictive maintenance

How it works

  • Unplanned downtime in manufacturing costs money (lower production yield), but so does planned downtime carried out on a “just in case” basis, which is inefficient and halts functioning machines.
  • This is about the shift from “preventative” to “predictive” maintenance, and being able to conduct maintenance tasks when needed rather than on a fixed schedule, therefore potentially reducing planned downtime and preventing future breakdowns.
  • Advanced predictive maintenance uses machine intelligence on IoT sensor data to determine whether equipment is likely to fail, and services only machines that need intervention.
  • According to a 2018 study, predictive maintenance could drive $140B value globally through productivity increases and cost savings across the manufacturing sector.

Why private 5G?

  • Predictive maintenance requires large volumes of sensor data to be collected reliably and quickly, analysed, and responded to within milliseconds to prevent incipient failure.
  • 5G allows predictive control algorithms to be centralised onto edge cloud rather than in dedicated, co- located hardware.
  • Predictive maintenance is a solution that has been run in manufacturing settings prior to private 5G, initially on private LTE. As more and more machines and assets get connected, private 5G can support the device density at lower latency at scale, more so than private LTE.

Case in point

  • Telefónica Tech (digital services arm of Telefónica) recently signed a deal with Grupo Álava, an engineering services company in Spain, to launch a predictive maintenance solution for industry 4.0 that runs on private 5G.

2. Autonomous mobile robots (AMRs)

How it works

  • Improves efficiency, reliability and accuracy of transportation and haulage of parts and materials; reduces labour costs, increases workplace safety and flexibility of the shop floor
  • More flexible than AGVs in moving from fixed routes, i.e. pre-planned routes or tracks that are tapped to the shopfloor, or those that use Wi-Fi, to more intelligent navigation for obstacle avoidance
  • Better suited to more agile production, where you can easily redeploy AMRs in the case of any modifications to products or production line

Why private 5G?

  • AMRs require high bandwidth that private 5G possesses to leverage built-in sensors and navigation tools (e.g. cameras, scanners) to navigate around the facility using the most efficient route it determines.
  • They also require its lower latency to react to obstacles or hazards on their route
  • When you have AMRs moving over large spaces in a site, or perhaps from indoors to outdoors across buildings for example, private 5G has the advantage over Wi-Fi given the advantages from a mobility and coverage perspective (fewer access points, better coverage both indoors and outdoors)

Case in point

  • There have been a number of trials of AMRs on private 5G networks, including Nokia who have tested an AMR solution to improve material flow automation at their “factory of the future” in Oulu, Finland
  • A recent deployment is at a manufacturing plant in Thailand owned by Yawata Eloctrode, where AMRs are being run on AIS’s private 5G private network platform.

3. Real-time inventory management

How it works

  • Tracks and monitors the position and usage of assets in real-time, increase visibility with greater accuracy in order to better manage assets over their lifecycle
  • Automates inventory management to prevent any potential delays with parts or materials required for production

Why private 5G?

  • In manufacturing sites there are a lot of items that need to be monitored, each of which requires a sensor. Such a large number of sensors being tracked in real time takes up a lot of bandwidth that private 5G can handle
  • The higher reliability afforded by private 5G is also important to ensure that items do not get misplaced
  • In larger sites when items are moving relatively large distances the extended coverage is also an advantage over Wi-Fi as items will not get lost when moving from one router to another

Case in point

  • ADLINK have a smart warehouse solution which can monitor the position and status of pallets, their edge hardware is highly compatible with 5G

4. AR/MR for lone worker and MRO

How it works

  •  Supports on-site workers to safely conduct maintenance, repair or and operations supplies (MRO), in place of or supervised by a remote specialist
  • AR enables critical parameters, information and instant hazard warnings to be displayed as an overlay for real-time interactions

Why private 5G?

  • AR/MR requires ultra-low latency to enable users to work effectively, if latency drops below 33ms then the experience becomes impractical – private 5G can enable this
  • High bandwidth for streaming the live feed along with any overlays also requires private 5G
  • High reliability is another requirement as often engineers will be doing repairs on dangerous and expensive
    equipment in real time

Case in point

  • There have been a number of successful trials for this use case, including:
    Lufthansa teamed up with Vodafone and Nokia in 2 separate projects which look to allow remote support to access airline engineers using private 5G
    − The Worcestershire 5G consortium also worked with Yamazaki Mazak to deploy a 5G enabled AR remote expert support solution
    − In Schneider Electric’s Le Vaudreuil Factory they tested an AR application that enables operators to superimpose real-time data and virtual objects onto cabinets, machines, or an entire plant, run on Orange’s 5G network

5. Drone for site inspection and asset tracking

How it works

  • Performs real-time industrial inspections via drones at remote, difficult environments or hard to reach locations such as pipelines, rigs, mines
  • Improves safety, setup, operating time and cost compared to manual inspections. Drones or other UAVs can create a digital twin of existing assets (video, 3D visualization, accurate aerial data)

Why private 5G?

  • Drones require high bandwidth to transmit high definition video to operators and enable them to identify issues with assets
  • There is also a need for high security so that drones or the data they are collecting cannot be stolen by competitors/other parties
  • The outdoor coverage is another aspect where WiFi can be problematic and has lower reliability which could mean that control of the drone is lost

Case in point

  • Bentley Systems, an infrastructure engineering software company, has used drones to automate the inspection of 5G towers in place of human crews, which cost approximately $2000 to $5000 per inspection.
  • Telia and Ericsson have also partnered to livestream industrial inspections using drones, which they aim to run on 5G

Author: Matt Bamforth is a Consultant at STL Partners, specialising in 5G, edge computing, and private networks.

Private networks insights pack

This 14-page document will provide you with a summary of our insights from our private networks practice:

  • 4 pathways for delivering services
  • The perceived key value of private networks
  • Which industries deployments have focused on
  • The #1 benefit of private cellular

 

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Telco Cloud: Why it hasn’t delivered, and what must change for 5G

Telco cloud made big promises for the transformation of telecoms. It is a fundamental enabler for 5G and the exciting opportunities ahead. Why hasn’t it delivered yet – and what needs to change?

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MWC 2022 – 10 Observations

SK Telecom Stand at MWC 2022 – STL Partners

GSMA’s Mobile World Congress – MWC 2022 revealed a subtle but significant shift taking place in the telco industry, showing how the market’s need is changing to ‘connecting technologies’ rather than ‘connectivity’. This has deep implications for the industry and telcos in particular.

Here are 10 observations the STL Partners’ research team came across as they traversed the halls of the Fira Gran Via Exhibition Centre, Barcelona at MWC 2022. A full overview and analysis of the event is available in our report: MWC 2022: Sensing the winds of change

1. CAMARA, the Telco Global API Alliance

Deutsche Telekom exhibited CAMARA, a new Telco Global API Alliance, which includes many leading telcos such as AT&T, Vodafone, Telefónica and Orange, as well as technology players such as Ericsson, Google Cloud and Microsoft. DT was at pains to demonstrate that it had learned from past mistakes, emphasising the inclusion of a wide range of partners – beyond just operators. Its first API came quickly to market within six months of establishing the alliance. The “Quality-on-Demand” API prioritises data packets to ensure high reliability and stability. One proof of concept (PoC) in Munich is enabling BMW to deliver Automated Valet Parking, where a BMW driver can leave their car at the entrance to a parking lot and the car drives autonomously to an available parking spot.

2. Becoming better partners

Operator’s discussed how to partner better, both on the network technology side as operations move to the cloud, and with start-ups, content and industry specific service providers to build and expand new services. Some operators expressed their wish to kill off request for proposals (RFPs) explaining how they can limit the scope of what can be achieved in a partnership, while also taking away from the customer outcome as the priority of the partnership. Some expressed instead a need to shift away from narrow partnerships with a specific focus, to more broad ranging ones that covering multiple areas across both B2C and B2B. 

3. Metaverse

It didn’t take long to find the Metaverse at MWC 2022. As the buzzword de jour, it was pretty much everywhere, often accompanied by NFTs – non-fungible tokens or certified digital goods. MTN, SK Telecom and Telefónica were among the telcos talking up the Metaverse. MTN Group, for example, claimed to be first African company to enter the Metaverse by purchasing land in Africarare while SK Telecom presented its ifland social VR and virtual meet-up metaverse platform as part of its “4D Metaverse” exhibition which also demonstrated future urban air mobility transportation.  There was surprisingly little discussion about the one thing that will determine whether these concepts fly and flop – trust. Neeraj Roy, founder of Hungama Digital Media conveyed that it will be critical for “the seven big tech companies who’ve all sort of announced their plans of the Metaverse” to ensure their creations are interoperable – it ought to be a single Metaverse. If not, people won’t be able to move their digital identities and assets from one platform to another, limiting the usefulness of the whole concept. 

4. AR and VR Applications

Metaverse and VR applications were popular throughout the show highlighting an emerging ecosystem of VR/AR and 3D developers seeking to build metaverse applications for both consumer, enterprise and government (education). VR for enterprise solutions included facilitating company meetings, sales and marketing of products as well as company training. Meanwhile Korea Telekom (KT) also showcased its developmental K-pop dance coaching smartphone app called “KT Real Dance” which features KT video-based AI capabilities. Users dance to a virtual dance instructor displayed on their phone. 

5. Video and AI 

SKT showcased its camera and vision AI service which offers real-time safety applications for enterprise and smart city by analysing and processing live video in the cloud to monitor real-time human activity and provide alerts in cases such as patient falls in hospital settings, driver behaviour monitoring to detect when drivers’ heads drop as they are falling asleep and social distancing regulations. The camera and vision AI service is part of SKT’s efforts to enter the era of hyper connected intelligence connecting people, things and society. 

6. Sustainability

Operators such as Deutsche Telekom and Vodafone showcased their sustainability efforts which included Deutsche Telekom’s Fairphone 4, a modular 5G device with interchangeable parts that enable easy repairs and increase the overall lifetime of the device – which has a guaranteed service life of five years. Vodafone also highlighted that where customers hold on to their phone for an additional year, the device’s carbon lifetime impact is reduced by 29%. At MWC 2022, Vodafone announced its circular economy plan for extending the lifetime of devices and encourage reuse and recycling. 

7. Heavy and highly physical industry emphasis

There was a new emphasis on heavy and highly physical industries: ports, airports, mining, manufacturing, construction, energy, logistics and healthcare for example. In the next ten years STL Partners believes the efficiency and productivity issues of these businesses must be addressed. To reach sustainability and carbon goals anywhere near net-zero, the profile of emissions, waste and efficiency in these businesses must be radically improved. There were a plethora of examples and use cases on show, widely varying in quality and depth, but nonetheless demonstrating what can and is being done.

8. Telco cloud

Operators such as Telefónica outlined their progress in Open RAN deployment citing its four main markets: Spain, UK, Germany and Brazil where the operator is in its last phase of its pilot programmes. The operator indicated that carrying out interoperability testing (12 weeks minimum) is a timely exercise and that due to high integration costs, open RAN as of now is more, not less, expensive, than legacy RAN. Meanwhile, Dish Network’s Marc Rouanne spoke enthusiastically of the operator’s cloud native standalone core and open RAN architecture that delivered an all software, fully autonomous, self-healing network. Having outsourced all its cloud operation to AWS in 2020, Dish’s network architecture team consists of fewer than 20 people. 

9. Further Analytics, AI and automation use cases

Spirent, with IBM and Palo Alto Networks, demoed a slice management solution with integrated security. Spirent’s active assurance product emulates security attacks both at activation and on an ongoing basis. It also, provides assurance for validation of initial end-to-end provisioning and any further scaling by IBM Cloud Pak. Lastly, the Spirent solution emulates traffic loads that trigger faults to identify the fault, apply impact policy and automatically trigger remediation to the orchestrator.  

Nokia demoed the use of its Network Data and Analytics Function (NWDAF) product within the telco ecosystem. Nokia discussed the ability to share network insights with an ecosystem of partners; allowing them to understand real-time quality of experience and past trends. It also provides predictive analytics from the NWDAF data to allow simple controls for the partners such as spinning up new slices or traffic rerouting when future issues were expected. 

10. Xiaomi AIoT and Huawei

Xiaomi showcased a range of IoT consumer electronics, (some) with artificial intelligence (marketed as AIoT), including its popular electronic scooters. A representative of the Chinese electronics manufacturer highlighted its three-pronged strategy focuses on growing smart home, smartphone and its retail footprint (stores and telesales). The company has experienced increased demand for its smartphones, particularly from customers who were previously Huawei device owners. Huawei mobile services such as Petal Search, Petal Maps, the Huawei App Gallery (App Store) and Huawei Ads was a reminder to the removal of Google’s Android Apps and services from its devices. 

Live events: An opportunity for telcos

For telcos, live events present specific challenges and opportunities. Providing millions of people with high quality images and audio simultaneously can soak up large amounts of bandwidth on networks, forcing telcos to invest in additional capacity. Yet, it should be feasible to make a return on that investment: live events are an enormously popular form of entertainment on which people around the world are prepared to spend vast sums of money.

New technologies can be used to enhance live events, enabling many more people to enjoy both the immediacy and the interactivity of the event, while increasing immersion. The combination of low-cost high definition cameras and microphones, high-speed connectivity and artificial intelligence are set to dramatically improve the experience of sports, concerts and talent shows.

The most obvious advance is the ability to stream very high-definition video from multiple angles, giving the viewer the opportunity to watch the action in a more personalised and immersive manner. Added to this, artificial intelligence (AI) can be used to help automate the production and editing of this footage. For example, image recognition can be used to enable football fans to track the movements of their favourite player, automatically switching between camera angles as appropriate. Similarly, image recognition solutions are increasingly being used to support referees and judges by automatically detecting infringements in real-time.

At the same time, AI can also be used to enable real-time analysis of live action, as it unfolds. In a game of football, for example, AI can be used to show how the formation of a team changes during attack and defence or the predominant style of play of individual players. That data can also be used to enable bookmakers to offer spectators more precise odds to support in-game gambling. Real-time footage, underpinned by low latency connectivity, is a key enabler of in-game betting and in-event competitions, such as quiz questions that spectators need to answer in a short window of time or head-to-head contests between viewers. In a similar vein, low latency connectivity can support in-event messaging and social media by ensuring everyone is viewing the same action at the same time.

Telcos have many of the key technological enablers required to deliver such enhancements to live entertainment. They could and should, of course, be in pole position to provide very high-speed connectivity to the event venue. They can also provide services such as digital identification/authentication (via a one-time password in a SMS message, the Mobile Connect specification or another mechanism for matching a mobile number to a specific individual) to prevent ticket fraud, authenticate access to VIP or member areas in a venue and more.

Telcos could also provide supplementary services, such as wireless connectivity (using either Wi-Fi 6 or private 5G) within the event venue and data processing/analytics at the edge of the network. Moreover, telcos can support ticketing and in-venue payments, via carrier billing or another digital payments offering.

In the professional entertainment market, the live events opportunity is a B2B2C play: Most of the services would be provided to an event organiser/broadcaster, rather than direct to consumers. However, there is a potential direct-to-consumer (B2C) opportunity too. The table below highlights B2C services for amateur events, and the enablers that telcos could leverage to support these.

Potential telco live events services for consumers

Source: STL Partners

Some telcos already sell high definition televisions and other kit, such as virtual reality headsets to consumers. Live events services such as the above would not be out of place among them.

Hundreds of millions of people around the world participate in amateur sports, drama and concert performances. These events can be of interest to hundreds of people who have friends or relatives among the participants, as well as the athletes, performers and musicians themselves. While amateurs won’t be able to afford to employ dozens of 360-degree cameras and microphones, many could deploy two high definition cameras, such as those sold by Danish start-up Veo. Its solution is comprised of a single unit housing two 4K cameras pointing in different directions. The cameras can simultaneously film both halves of a pitch or court, without the need for a camera operator. Additionally Veo uses artificial intelligence to track the ball and produce footage of the game that follows the action. The current model costs £700 in the UK and US$800 in the U.S.. The solution is currently being used by more than 6,200 clubs.

  • Veo charges a monthly subscription fee of £36 to buyers of its cameras, which gives them unlimited access to the Veo Editor, unlimited storage of recordings and the ability to download highlights. There are volume discounts, but that subscription fee represents a major financial commitment for an amateur sports team (on top of the up-front price of the camera), suggesting the Veo is primarily aimed at serious clubs (youth academies and adults playing in competitive leagues).
  • A team can also pay an additional £10 a month for Veo Analytics service, which uses AI to create heat-maps and other stats about the game.
  • Live streaming functionality carries a £13 a month charge, and clubs will need to provide their own SIM card and data plans, if Wi-Fi coverage isn’t good enough.

If live streaming of high definition videos of amateur events becomes commonplace, it could generate a significant volume of traffic for mobile operators. However, this is not expected to be a huge opportunity in the near term, as smaller amateur events are unlikely to be streamed because there won’t be sufficient interest to justify the additional hassle and expense. In cases where an amateur event is live streamed, there may also be demand for instant replays, statistics and highlights, all of which could be generated by AI. Over time, Veo and similar systems may even be able to provide a referee with an instant replay on their smartphone so they can check a decision.

As with professional event organisers, amateur clubs and societies may wish to run competitions around events and facilitate live chat among their distributed fan base.

BT is an example of an operator that is testing the live events market. In April 2021, BT announced that it had connected 70 grassroots football clubs across the UK with broadband/Wi-Fi, as part of a new initiative. The telco said it planned to connect 100 clubs by the end of the summer. The connected clubs are reported to be using the Wi-Fi for live streaming of matches, setting up contactless payments and guest Wi-Fi. As things stand, BT is providing the service on a pro bono basis: the telco is the lead partner with each of the four home nation football associations – The FA, Scottish FA, Irish FA and FA of Wales.

For more detail please see our report Telco plays in live entertainment.

What does AWS Private 5G mean to telcos and enterprise?

AWS launched its private networks service  to simplify the deployment for enterprise customers. This move further disrupts telcos’ position as the main cellular connectivity providers and lowers the entry barriers for new emergent players. But to what extent can AWS service support the diverse enterprise requirements and compete with telcos and other players in the market?

What is AWS offering?

AWS offers its new Private 5G service to customers in the US to tackle two significant issues with private networks deployments: complexity and cost. The service aims to:  

  • Simplify and accelerate the planning and deployment of networks

Private networks projects usually require collaboration among several different partners including technology vendors and system integrators to support the implementation across various phases. Enterprises invest considerable time, money and effort working with these partners and suppliers and going through several phases of planning the networks and sourcing equipment and then deploying, integrating, and configuring the network. This all might typically take weeks or months. AWS wants to streamline the process and shorten the time for customers in a way similar to how they consume computing resources through its AWS cloud services.

To order, customers use the AWS website to specify the location of their network and the capacity they require. AWS then ships the network components within days. These include small cell radios and servers as well as software to run the RAN and core network. AWS will also provide SIM cards to all the devices in the network. All components come pre-configured so that they require minimum effort from the customer aside from installing them, turning on the network and inserting SIM cards into devices. AWS will also manage the network, monitor its operations, and run software updates when needed.

  • Define and reduce the cost of deployment

This AWS streamlined procurement process is also supported by a clearer and easier pricing model that is likely to be quite attractive for many enterprises. It is a cloud-based pay as you go model with no upfront capital cost or fees per device. As opposed to per-device pricing models which can be cost-prohibitive for a network with a high number of connected devices, the AWS model only requires customers to pay for the capacity that they use. This means that they can run as many devices as they like without increasing the cost substantially, especially if these devices have simple data requirements. Customers can simply scale up or down as needed.

With this service, AWS is testing the demand for private networks and its ability to enhance its overall enterprise proposition. The service complements AWS existing services and will build on the need for edge and cloud compute, storage, analytics and other services. Similar to Wavelength proposition where AWS partner with telcos to support the delivery of network edge, AWS Private 5G can create partnership opportunities and sales channels for AWS to strengthen its enterprise business.

Where will it be launched?

The service is now available on preview to US customers only as it runs on the CBRS spectrum. The CBRS spectrum access model in the US with its two main tiers; the Priority Access License (PAL) and the General Authorised Access (GAA) has essentially laid the ground for this AWS service model by enabling access to spectrum for non-telcos. The GAA which is the lowest priority tier allows anyone to use the spectrum to deploy a private network under the management of a Spectrum Access Server (SAS). Many companies are already deploying and experimenting with LTE and 5G using the unlicensed GAA spectrum. However, GAA is still an opportunistic type of access and in some specific use cases or locations where customers might want to ensure their access, they can opt for a PAL license.

Following its US launch, AWS might want to expand their service globally. However, the disparities between countries and regions on how private networks are deployed might will not make that easy. Many countries such as the UK, Germany and Japan are allocating shared licensed spectrum for enterprises to support the deployment of private networks, but licensing models and frequency bands differ. AWS will need to understand these differences in every market and adjust its offering accordingly. In some regions where there is no enterprise shared spectrum, AWS might have to partner with or sell through telcos.

What kind of companies will deploy it?

Generally, there have been many examples of CBRS private networks across a wide range of verticals and use cases including in mining, manufacturing, transport, utilities and even healthcare and education. However, one of the challenges of private network deployments is that customers’ environments vary and there might still be planning and deployment issues that are unique to specific places and locations such as RF planning, assurance, integration with the enterprise IT and security, and coexistence with legacy radio and connectivity solutions. These deployment challenges are also affected by size of the deployment and its desired performance. While large enterprises might still leverage AWS service for its deployments, the turnkey nature of it makes more suitable for small to medium enterprises that are looking for a more reliable wireless network option.

AWS announced that its first deployment was in one of Amazon Fulfilment Centres to support reliability and mobility requirements for its warehouse operations. Dish Network and Koch Industries are both lined to become the first sales channel partners and utilise the service for their customers.

Of these two, Koch Industries in addition to Amazon’s own operation suggest that some of the use cases and sectors that AWS is targeting include factories, warehouses, and other industrial settings. In such locations, private networks can provide a level of reliability and support for mobility that Wi-Fi cannot. Amazon demonstrated how it used the technology to replace outdoor Wi-Fi coverage at a parking lot of its warehouse. The company explained that using private 5G was more cost-effective and quicker to deploy than Wi-Fi as it only required two small cells mounted on the corners of the warehouse. While to get a decent coverage with Wi-Fi, the company previously went through the trouble of mounting light poles for the equipment, extending fibre to support the mesh systems and also changing the outdoor electrical systems.

With the rise of industry 4.0 and as many companies have started going through digital transformation, AWS and other hyperscalers have managed to establish some presence in the industrial sector with their IoT platforms and solutions. This private network service, together with edge computing and other on-prem solutions, allow AWS to strengthen its position in the sector.

On the other hand, highly complex environments with very strict reliability, latency and security requirements and human safety mandates, such as transportation hubs and energy plants, are also increasingly adopting private networks to support their critical operations. The simplified AWS deployment model with its customer self-installation and pre-configuration aspects might be too generic for such scenarios. For example, Lufthansa Technik when deploying its private network in Hamburg Airport came to discover and deal with the issue of 5G signal degradation through aluminium alloy and carbon fibre and how that affects the communication between the aircraft cabin and the edge servers. It is not clear yet whether AWS will offer some additional support or customisation if certain customers require that, but this is already a big opportunity with plenty of customers that AWS can target with a horizontal offering.

Also, the ease of accessing and deploying networks in the unlicensed portion of CBRS, in general, has enabled uses cases in niche or emerging sectors such as education and healthcare including providing connectivity to students in rural counties during lockdowns or supporting hospital unit extension during crises, respectively. AWS pricing model can further support the adoption within these sectors and similar sectors where customers are severely constrained by the cost.

Are telcos losing the private networks market?

Over the last two years, telcos’ understanding of their position in private networks has gradually changed from wanting to do it all and, therefore, being highly protective of their role as the main connectivity providers to becoming more accepting of playing a collaborative role in private networks as the market dynamic changes. This has been further established as licensed and shared spectrum schemes started to become available to enterprises in different countries, easing the way to network ownership and deployment for many enterprises, especially large ones.

While telcos’ role might have been affected slightly, they have not completely lost the private networks race to hyperscalers and other emerging players quite yet. Many companies that wanted to own spectrum and build networks independently continue to partner with telcos to leverage their telecoms experience in building and managing networks. In some countries where regulators have decided against licensing spectrum to enterprise such as in China, telcos remain the main providers of private networks.

However, the AWS move represents a significant step in reshaping the market and changing thinking around private networks. It lowers the barrier to adoption and will help bring the technology closer to a wider audience, urging participation from the larger 5G and enterprise ecosystems and increasing the appetite for innovation in private networks and enterprise solutions. The service might also disrupt some of the future plans for telcos around network slicing as they aim to target SMEs with customised slices where dedicated private networks are not feasible. Also, telcos need to watch out for how AWS would structure and simplify billing for connectivity as this is something that telcos have not been good at historically.

And while AWS service might help with the rollout of many private networks, it might not be the answer to every problem. As more customers start to adopt the AWS service, there will be a better understanding of its actual capabilities, what types of deployments that customers can set up by themselves and where they need additional support, and what types of indoor environments and use cases that it is best suited for. This also will create opportunities for other stakeholders including telcos to partner with AWS or other technology providers with possibly similar offerings such as Cisco with its new hybrid 5G-Wi-Fi solution. Telcos can also develop their own solutions to fill the gaps.

The net-zero enablement use case directory

About the Telecoms Net Zero Enablement Use Case Directory

This telecoms net-zero enablement use case directory highlights a selection of sustainability use cases that telcos could offer to their customers to enable them to reach net zero. Each use case has one or more related case studies of companies (including, but not limited to, telcos) which highlight examples of the use case in practice.

It supports telcos and their partners to:

  1. Accelerate sustainability strategy through exploring a range of real world case studies that are driving solutions across different industries and for consumers.
  2. Drive alignment within the organisation on the proposition and requirements of use cases.
  3. Highlight the monetisation opportunities and roles that need to be filled in order to deliver a sustainability solution.

To download the PDF version of our Telecoms Net Zero Enablement Use Case Directory, click the button below

Our list of use cases and case studies provide detailed insights and analysis

Each use case features the following:

  • How it works
  • How the use case enables net zero
  • Potential ecosystem partners
  • The telco business benefit (e.g. connectivity revenue, access to green finance)
  • The telco capabilities involved in the use case (e.g. 4G, 5G, edge, systems integration)
  • Whether the use case has a direct impact (clearly articulated link to sustainability in proposition) or an indirect impact (sustainability is currently a by-product)
  • The applicable business model (e.g. B2B, B2C, B2B2X)

Each case study highlights:

  • A specific example of a telco or other company offering a sustainability use case
  • An overview of how the case study works
  • STL Partners’ SWOT analysis
  • Key solution partners
  • Indication of solution maturity

Read more about sustainability

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Pitfalls of emissions enablement

Telecoms operators provide enabling technology to help their customers reduce carbon emissions. However, exaggerating claims of enablement may have adverse consequences. This article explores how telecoms operators should approach these claims.

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Webinar

5G’s role in reducing carbon emissions – over 1.6B tonnes by 2030t

In this webinar STL Partners demonstrates which 5G use cases play the biggest role in reducing emissions and how the ecosystem must work together

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Research

Telco roadmap to net-zero carbon emissions: Why, when and how

Based on discussions with 40 service providers (SPs) this report explores the challenges, priorities, strategies and best practices they identified around reducing carbon emissions.

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The emergence of new service providers

Thanks to the “democratisation” of shared spectrum, virtualised networks, fibre and cloud – plus the demands of industry, government and local communities – a plethora of new service providers are emerging in the 5G-era.

New service provider types

New service providers

Source: STL Partners

In a recent report, New telcos: A field guide, STL Partners classified these into three main groups of service provider types, with the remainder grouped into a “miscellaneous” category for completeness.

  • “Evolved” traditional telcos: operators, or units of operators, that are recognisable from today’s companies and brands, or are new-entrant “peers” of these. The category includes separate systems integration / enterprise units of telcos, crossover between fixed and mobile operators and greenfield telcos, among others.
  • Adjacent wireless providers: service provider types that have been established for many years, but which are now overlapping ever more closely with “traditional” telcos. Examples include tower companies, neutral-host networks and satellite companies.
  • Enterprise and government telcos, i.e. large organisations shifting from being “users” of telecoms, or building internal network assets, towards offering public telecom-type services. They include industrial / enterprise specialist MNOs, government and municipal networks and utility companies offering telecom services.
  • Others: the catch-all category that spans various niche innovation models. One particular group here, decentralised/blockchain-based telcos, is analysed in more detail in the report. The category includes community networks, industrial systems vendors, property companies and advanced (“thick”) MVNOs.

Each of these groups poses different challenges to traditional telcos, depending on the specific national market, and the focus areas for each operator. For example:

  • The implications for incumbent MNOs in markets where greenfield operators like Rakuten Mobile and Dish have launched include the need to compete with lean new rivals, with no technology legacy or existing network loads. These “evolved” telco competitors are often willing to undercut prices substantially and make a huge splash of publicity. At the same time, their emergence is also leading to telco wariness in other markets, especially around M&A and market consolidation, in case regulators decide that mergers need to be paired with the arrival of a new entrant.
  • Tower companies (under the category of Adjacent wireless providers), while not new, own important parts of network infrastructure that used to be considered fundamental assets for MNOs. Players like Cellnex and Digital Bridge are now moving up the value chain and increasingly encroaching on the broader services space that 5G telcos are hoping to occupy themselves. This means that traditional operators risk being squeezed by technology application and hyperscale firms on one side, and players like these tower companies on the other. While this may mean that operators are able to become more opex-driven than capex dependent, it may also reduce the scope for vertically-integrated services innovation going forward.

The net effect of new service providers

While the net effect of the emergence of new service providers is hard to predict, what is clear is that it will be more difficult for traditional operators to monetise general-purpose networks in the future. Our report contains several recommendations for telcos as they navigate a new reality in which they will likely need to embrace customisation and localisation in order to compete with new, nimble and specialist players in multiple domains. 

Private 5G: What is the business case for the manufacturing sector?

Webinar: Private 5G: What is the business case for the manufacturing sector?

Fraunhofer IPT, WZL and STL Partners have developed a tool to evaluate the economic potential of 5G for applications in the manufacturing industry. This webinar provides a live demonstration of the tool and how it can be used by end-customers (manufacturers), industrial solution providers and 5G service providers.

  • Why is the manufacturing sector exploring 5G and what are its perceived benefits?​
  • Which use cases are driving adoption? ​
  • When will longer use cases mature and what are the dependencies?​
  • What are the economic benefits of private 5G in enabling Industry 4.0?​
  • Deep-dive on automated guided vehicles (AGVs) as a use case​

5G Standalone vs Non-standalone: deployment models

5G Standalone vs Non-standalone: Deployment models

Operators are exploring the practicalities of launching a 5G service. From a technology perspective, they must make some key decisions with regards to their 5G roadmap: non-standalone 5G core first or direct to standalone 5G. This decision is informed by a number of factors, such as speed to market, cost, required capabilities. In this article, we explain the difference between the two architectures and bring them to life with some live operator case studies.

The 5G era is upon us

5G, the next generation of mobile connectivity, has been hyped for many years as heralding a quantum leap in wireless network speeds and bandwidth. Many operators globally sense the opportunity that this presents and are eager to explore a route to deploying 5G services. Consumers are using more data hungry applications like 4K live streaming and online gaming. Enterprises are transforming and optimising the way they operate through greater use of IoT, digital twins, AI/ML, and accompanying use cases such as predictive maintenance, and environment condition monitoring. First mover advantage may well be key from an operator perspective to capture market share within these customer groups.

5G Standalone vs Non-standalone

Several operators globally are engaged in acquiring spectrum, network planning and deploying commercially, at scale. However, most operators are in relatively early stages, trialling technology and running PoCs. Many countries, including those in Asia Pacific and Latin America, have yet to auction or allocate spectrum licenses. Operator 5G programme advancement is dependent on three key factors: regulation (whether the regulatory body has made spectrum available), technological readiness and organisational readiness. In planning their 5G strategy, operator technology teams must decide whether to deploy a non-standalone core first for 5G and leverage existing 4G LTE network assets, or move straight to deploying a standalone core (SA). Ultimately, the launch of 5G SA core is a question of “sooner or later” – some key considerations are laid out below:

Standalone

Non-Standalone
Definition
  • 5G network with dedicated equipment and network functions
  • 5G radios coupled with cloud-native, service-based core network functions
  • These network functions are completely virtualised and cloud-native
  • 5G network supported by 4G core infrastructure
  • 5G radios coupled with LTE Evolved Packet Core (EPC)
  • Network functions running on dedicated appliances, in some cases
Pros
  • Full 5G capabilities available (eMBB, URLLC, MMC)
  • New features, functionality and services enabled (e.g. network slicing)
  • More flexible architecture and dynamic linking of network functions
  • Faster roll out – can act as stepping stone as part of the transition to SA deployment
  • Maximise utilisation of existing network assets
  • Lower level of investment required
Cons
  • Higher level of investment required
  • Organisational training required for 5G core and service operation
  • Less flexible architecture
  • Limited incremental 5G functionality 
Example Deployment

DISH

Country: USA 

Launch year: 2021

Primary vendor(s): Nokia

Rationale: Capabilites

Dish decided to leadpfrog NSA as a potential stepping stone to a full standalone 5G network. The cloud-native player is building an Open RAN-based network from scratch, looking to run its service from the public cloud. Over time they are expanding national coverage to offer the broadest possible coverage – target is to increase coverage to 70% by end of 2023.

Deutsche Telekom

Country: Germany

Launch year 2019

Primary vendor(s): Huawei, Ericsson

Rationale: Broad coverage and speed to market

Deutsche Telekom has taken the other approach, opting to leverage their 4G/LTE stack to deliver 5G services. This has allowed them to deliver a service that is perhaps not as fast as pure 5G, but achoeves the purpose of providing broader national coverage to a much larger proportion of the population faster. The evolution to an SA core is also currently underway but the timing will be dependent on the availability of use cases for 5G SA.

The information above is contained in our Telco Cloud Deployment Tracker. The tracker gives a detailed insight on which operators are deploying 5G networks, who they are partnering with, at which part of the technology stack. The table above also draws insight from a short article we published, detailing Tier-1 operator approaches to 5G, including Telefonica, Telia and Vodafone.

As highlighted in the table above, NSA deployments cannot benefit from the full range of capabilities offered by an SA deployment. While NSA deployments build on LTE’s ability to offer enhanced Mobile Broadband, they cannot offer the same bandwidth, low latency or reliability offered by a pure 5G deployment.

However, the decision is not necessarily binary – SA or NSA. NSA can bridge the gap between 4G and fully-fledged 5G. In practice, many operators have started their 5G roll out journey with an NSA deployment, and a view to graduation to a standalone deployment within a few years. This strategy, when employed correctly, accelerates time to market with initial proposition to ensure they attract a good share of the market. Most commonly, the first service deployed is targeted at the consumer mobile market. This allows users to benefit from the enhanced speed, without requiring use cases that strain the network in terms of bandwidth and reliability.

In the coming months and years, operators will continue to drive their 5G programmes forward towards a standalone deployment to simplify their network operations and improve end-customer experience. One of the key standalone features that operators will look to leverage is network slicing. Network slicing will allow operators to create dedicated segments of the network to serve specific customers or use cases, with dedicated SLAs, policy control and quality of service. Each network slice will present an opportunity for operators to monetise their network differently to the current mode of operation. This is likely to be two to three years away for the majority of operators, however.

Looking forward

As 5G programmes accelerate, consumers and enterprises stand to benefit greatly from the enhanced connectivity options on offer. They will be have access to faster, more reliable and secure wireless connectivity than ever before. In some cases (e.g. manufacturing campus locations and smart cities), 5G may be used as a replacement for Wi-Fi or traditional high-capacity wired connectivity. The real challenge for operators will be in navigating the pace of change and in deciding how to transform (technologically and organisationally) to maximise value for themselves and their customers. Time will tell which operators will be able to rise to the challenge.

Author: Patrick Montague-Jones is a Senior Consultant at STL Partners, specialising in a range of topics across the telecommunications value chain

Telco Cloud insights pack

This 24-page document will provide you with a summary of our insights from our virtualisation research and consulting work:

  • Overview of Telco Cloud deployments worldwide
  • Benefits of telco cloud: state of the industry
  • Deployment approaches: implications and challenges
  • How STL Partners can support you

Just click on the button below to request your free pack.

 

Read more about Telco Cloud, Cloud Native, NFV & SDN

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Telco Cloud: Why it hasn’t delivered, and what must change for 5G

Telco cloud made big promises for the transformation of telecoms. It is a fundamental enabler for 5G and the exciting opportunities ahead. Why hasn’t it delivered yet – and what needs to change?

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5G business models: how does telco IT need to evolve?

5G promises to enable new business models, driven by innovative, flexible, and scalable solutions. CSPs will need to evolve their underlying systems to be more dynamic, and ensure they have the right technological, organisational and commercial practices in place, in order to capture value and maximise their monetisation potential.

Reah Jamnadass, Senior Consultant

We estimate that 5G could unlock $1.4tn of value across a handful of key industries by 2030. Basic connectivity is no longer a big source of differentiation or a revenue-generator for telcos, but 5G is an opportunity for growth. If telcos are able to exploit 5G’s advanced capabilities and flexible architecture, it could be a way for them to move up the value chain, tap into new revenue streams, and capture a solid share of this market with new 5G business models. 

To achieve this, they must prepare their underlying systems to not just handle but truly monetise 5G.  

What do we mean by “new 5G B2B business models”? 

Cloud-native by design, the 5G network is more complex than previous generations of connectivity, but it is also more flexible, scalable, and programmable. Its advanced capabilities (e.g. low latency, high bandwidth, strong reliability) can support innovative and dynamic new use cases for both consumers and enterprises. Its architecture also makes it easier for non-network internal teams (e.g. product, strategy) to have greater visibility over the network and therefore to help define services to meet the demands of customers.  

This presents an opportunity for telcos to rethink their innovation models and move from providing product-centric to more service-based solutions. It is also an opportunity to engage a wider ecosystem of partners to co-innovate, especially if telcos want to provide more end-to-end solutions and capture a higher share of value. The B2B space is particularly compelling here, holding strong revenue potential, particularly for customised solutions that meet the specific requirements of enterprises or their applications. 

However, as telcos define their roadmaps to monetise their 5G investments, it will be critical to evaluate how their underlying IT infrastructure must evolve to support this.   

How does telco IT need to evolve? 

 As telcos provide services that are more flexible and scalable, they will need to ensure that their IT and BSS systems follow suit. For example, they will need to: 

Monitor dynamic services for device volumes at scale
May be monitoring QoS levels for 100s or 1000s of devices per customer, each of which might have different SLAs
Support low-latency, real-time processing
      
This will be critical to enable low-latency, high-bandwidth 5G use cases for enterprises e.g. to charge accurately
Migrate legacy BSS stacks to cloud-native platforms
This will allow integration across different applications and provide scalability to support edge applications
Meet 5G standards and adopt open frameworks

TMF Open APIs make it easier for telco and enterprise systems to interface for B2B2X solutions

 This will require systems that are more automated and designed to be flexible and scalable to ensure that telcos are providing a strong QoS to customers, but also that they are exploiting monetisation opportunities. 

Network slicing 

A good example of this is network slicing. Though an opportunity that is still 2-3 years away (if we are talking about dynamic, customisable slicing running on 5G SA), telcos should explore monetisation strategies for this today, especially from an IT perspective. It is a service-based solution that will give telcos the ability to deploy new services quickly and provide tailored solutions to customers across a range of verticals while using minimal infrastructure.  

However, because it is not easily productised, there is no straight forward answer for how telcos should charge customers. This raises a number of considerations: not just how to charge in this more complex environment, but how to then provide visibility to customers over how they are being charged, and to ensure that every chargeable event is being processed and exploited. Beyond charging, this will have implications on systems such as billing, policy and CEM. Hence, telcos need to consider which solutions they seek to enable, how they intend to provide these to customers, and evaluate which systems need to evolve and how.  

How can telco prepare to exploit these new 5G business models? 

This is not just a discussion about technology. Alongside this, telcos will need to evolve their organisations to monetise the 5G opportunity and adopt cloud-native business practices alongside the physical infrastructure. There will need to be defined strategies in the following areas: 

Organisational

Greater cross-team collaboration

•Convergence between IT and network teams to fuel innovation e.g. product teams have visibility over how customers are using the network

•This will require upskilling to fill gaps e.g. in software development

Technological

Flexible architecture

•Monolithic legacy systems will need to be replaced by open, flexible and scalable infrastructure with open APIs

•Customers and partners will want more service visibility and to be able to interact more directly with telco systems

Commercial

Clear propositions

•To justify investments internally, proposition teams will need to frame 5G’s value and monetisation potential

•This includes the ability to differentiate its connectivity play (e.g. with slicing) and innovate with partners

Telcos with more evolved 5G deployments are already moving towards more converged IT and network teams in line with their infrastructure changes, either with both sitting under a CTIO, or with some level of cross-functionality. This puts them in a strong position to evaluate and prepare for the future of 5G business models.  

Learn more about our work on new 5G business models 

How STL Partners Consulting can support you

STL Partners has developed industry-leading expertise, backed by extensive thought leadership, and supported telecoms vendors in identifying the best approach to engage telcos on the topic of 5G.

There are three main ways we can do this:

  1. Strategic positioning: Evaluating how telcos are thinking about their IT evolution with 5G, and analysing how vendors can support in their roadmap and address key pain points stalling growth
  2. Business model development: Developing potential business models for new strategic opportunities, including potential go-to-market strategies
  3. Customer engagement: Creating thought leadership and (marketing and/or sales) collateral that can accelerate engagements with existing customers and new prospects

Get in touch to understand how STL Partners can support you:

reah.jamnadass@stlpartners.com

Or visit our website to discover more about our consulting work and expertise:

http://www.stlpartners.com/consulting

Vonage: What is Ericsson’s end game?

Rationale for acquisition

In late November 2021, Ericsson announced it would purchase Vonage, a global cloud-based communications provider for $6.2bn. The acquisition is part of Ericsson’s expansion into the enterprise segment through Vonage’s communication platform as a service (CPaaS) offerings and follows on from Ericsson’s purchase of US-based Cradlepoint in late 2020. Cradlepoint’s enterprise solutions include wireless wide area networks (WAN) over LTE and 5G edge routers delivered as an all-in-one solution with more than a million (NetCloud) endpoints under subscription. Ericsson believes the enterprise market offers attractive software as a service (SaaS) revenue opportunities that can be scaled and aligned to strengthen its core business. Vonage is the latest acquisition in this strategic direction.

STL Partners has been talking extensively about the growing need for greater network intelligence amongst applications and platforms as a key opportunity to provide unique value in a B2B2X environment. We believe if Ericsson can leverage the developer community in the way it wants, it has the potential to become a strategic partner and a channel for operators to access developer communities, perhaps even challenge the hyperscalers by acting as an aggregation point for developers and network operators to engage with each other.

However, it may be too early to tell how Vonage’s existing developer community will see value and differentiation in the network APIs and 5G capabilities Ericsson and its operator base has to offer. Given many developers still do not have strong understanding of 5G technology, its capabilities and applicability to them, the opportunity for Ericsson rides on its ability to successfully encourage the developer community to see the value in leveraging these advanced network capabilities and programmability.

The Vonage Communication Platform

Founded in 2001 as a consumer VoIP provider, from 2013 Vonage has evolved through acquisitions into an integrated communications platform as a service provider (CPaaS) with sales of $1.24 billion in 2020 and $1.4bn expected in 2021. Of the company’s two business divisions, its cloud-based Vonage Communications Platform (VCP) accounted for over 73% of Vonage’s 2020 revenues serving over 120,000 customers, from SME to large enterprise business across a range of sectors (healthcare, finance, education, retail).

The Vonage Communication Platform (VCP) has three offerings:

  • Application Programming Interface (API) platform enables developers to embed communication services such as messaging, voice and video services into their applications and services. Through acquisition of Nexmo’s API platform and TokBox’s WebRTC programmable video integration, Vonage offers a range of communication APIs (such as voice, SMS, video, verify, messages and dispatch, number insight) enabling businesses to integrate programmable capabilities such as communication and authentication quickly into their products.

Vonage Communications Platform 

Vonage-vcp-platform-ericsson

Source: Ericsson Vonage Announcement Presentation November 2021

  • Unified Communications as a Service (UCaaS) – Vonage Business Communications (VBC) is the company’s cloud-native over-the-top unified communication service. Vonage also offer a Business Enterprise unified communication and collaboration service in the US (offering voice, data, video, mobile and contact centre services) for mid-market and enterprise customers delivered over a private secure IP MPLS network.
  • Contact Centre as a Service (CCaaS) solutions – Vonage Contact Centre is a cloud-based contact centre as a service (CCaaS) aimed at the middle market. The service integrates Vonage’s unified communications service and its APIs to deliver a full communication suite for enterprises.
    • Vonage’s unified communication (UCaaS) and contact centre (CCaaS) services come with third-party enterprise software applications to support workflow and productivity. Integrations include Salesforce, Microsoft Dynamics, Teams, NetSuite, Zendesk, and Hubspot, which are available via Vonage App Centre ecosystem. According to Vonage, its Contact Centre solution currently holds the esteemed position of “Premier partner status” on the Salesforce AppExchange with a five-star rating and number one ranking across 800 reviews.

In late 2020, Vonage’s API revenues overtook UCaaS and CCaas revenues highlighting the growing demand for its API solutions from its developer network. Vonage’s recent API business growth has been driven by the popularity of its messaging and video APIs. It’s API revenue grew 43% year-on-year in Q3 2021.

The Vonage acquisition offers Ericsson the opportunity to introduce network and API capabilities to a wide developer community. Announcing the acquisition, Ericsson CEO said the company’s first step will be to embed its advanced network capabilities into Vonage’s existing communication APIs which have the potential to be adopted quickly on the back of existing 4G and 5G network build outs.

API business driving VCP growth

Source: STL Partners, Vonage Q3-21 results

Multi-vendor and multi-operator developer ecosystem

In announcing the acquisition, Ericsson’s CEO pointed out how the company has already developed quality of service APIs, but up to now they have only been tested in operator networks around the world. Accessing Vonage’s developer community would put the APIs into the hands of developers and convert them from “nice to know” capabilities into user friendly and valuable APIs.

Ericsson wants an engaged developer community/ecosystem to take these APIs and advanced network features and design real-world applications leveraging the capabilities of 4G and 5G advanced networks. It believes it can unlock value from its network APIs and 5G advanced capabilities by combining its deep network expertise of 26,000 R&D specialists with Vonage’s 1.1 million global developer community, 780 API platform engineers and Vonage’s back-end connections across over 200 CSPs.

These 200+ CSP connections are made possible by underlying technology supplied by vendors such as Ericsson. The developer and API ecosystem will be open to competitor network vendors and the wider MNO community in order to ensure the fullest possible participation in 5G innovation for enterprise. Ericsson is confident its worldwide market share position (outside China) and network capabilities will give it a strong starting position in developing new applications and that the openness of this developer, vendor and MNO ecosystem will be good for the industry overall.

It is hoped this developer ecosystem can leverage next generation of 5G advanced services and functionalities such as latency (across device types for example), quality on demand and network slicing across industry verticals and that developer/enterprise innovation will drive usage of the CSPs networks, providing an ROI on their 4G and 5G network investments.

  • A key test will be whether the developer ecosystem will see the value in Ericsson network APIs and capabilities, and whether Vonage hosts the right app developers that can see value in and will actually use these new network APIs (e.g. slice configuration, dynamic traffic routing, bandwidth management etc.)

Up to now, telecom operators have established their own API platforms or used third-party API developer platforms to attract developers and foster innovation on their networks. Ericsson wants to ensure that it is compensated for the innovation that occurs on its next generation (5G) network equipment as opposed to losing value to over-the-top players. It may believe it can reach a more global developer community more efficiently than MNOs.

Competing with Twilio at API and ‘super network’ level

Given that Ericsson (among other vendors) supplies the underlying network technology to and has extensive relationships with network operators globally, it may be in a position to compete with other communication platform players such as Twilio by having the advantage of advanced 5G network knowledge and capabilities in addition to its close MNO relationship ties.
Twilio’s developer-first platform approach consists of four core elements; its Programmable Communications Cloud, it Super Network, its Business Model and its Engagement Cloud or Customer Data Platform.

  • Programmable Communications Cloud consists of the APIs that enable developers to embed voice, messaging and video capabilities into their applications.
  • The Super Network is Twilio’s software layer enabling its customer’s software (Amazon, Airbnb) to communicate with connected devices globally by connecting to CSP networks and internet service providers in 80 countries. Twilio has agreements in place with CSPs globally to route communication through their networks. The Super Network also contains a set of APIs giving Twilio customers access to more foundational components of the platform such as phone numbers, and SIP Trunking.
    • Twilio highlights its extensive carrier agreements ensure resiliency and redundancy for its customers. By using real-time feedback data on handset deliverability from carriers and across geographic markets, the Twilio Super Network can detect issues and make routing decisions quickly. It can optimise communications flow through its platform based on network quality and cost.
    • According to Twilio, network service provider fees account for a substantial majority of its costs particularly outside the US.
    • Twilio has said its Super Network provides it with massive volumes of data from end users, their applications and from communications. As more communication is handled by Twilio, the Super Network “becomes more robust, intelligent and efficient” improving its performance in terms of quality and cost, making it, according to Twilio, difficult for others to replicate.
  • Segment Customer Data Platform / Engagement Cloud – Twilio offers their customers (Amazon, Airbnb) the ability to gather and analyse customer data from across all their communication channels. This helps Twilio customers generate new customer insights which they can use for personalised targeted marketing communication.
  • Business Model – To empower developers to experiment and innovate on its platform, Twilio offers a low friction model that eliminates up-front costs, offers a free-trial and free developer resources, and more importantly, adopts usage-based consumption pricing.

Twilio customer engagement platform

Twilio-customer-engagement-platform

Source: Twilio investor presentation, March 2021

Mavenir and Telestax

There may be parallels between Ericsson’s tie up with Vonage and Mavenir’s (August 2021) acquisition of Telestax, a global communication platform as a service (CPaaS) enablement and application provider.

Mavenir has said it expects Telestax to enhance its Mavenir Engage solution, a cloud-based customer engagement and messaging monetisation solution offering RCS Business Messaging, A2P and P2A campaign management, templated chatbots, visual flow builders, payment integrations and advanced analytics. Mavenir’s CEO Pardeep Kohli has stated CPaaS can help service providers enhance their 5G enterprise offerings in areas such as IoT, Smart cities and Automotive. The rationale being that 5G capabilities and associated APIs will be integrated into these 5G enterprise use case verticals creating new value and new revenue opportunities.

Ericsson’s view of the market opportunity

Overall Ericsson believes Vonage will see strong growth across its three VCP offerings as enterprises accelerate their digitalisation. Ericsson cites analyst expectations of 17% growth in the CPaaS business up to 2025 and a total addressable market (TAM) worth $69 billion by 2025.

It expects Vonage to outperform due to its strong position in the API market, citing Vonage’s 7% share of the API market today. Ericsson expects the total API market to be worth more than 50% of the global RAN market by 2025 and conservatively estimated the global API market to be worth $8bn by 2030.

The question is: what role is Ericsson seeking to play as a result of this acquisition? If Ericsson is able to successfully leverage Vonage’s developer ecosystem to drive the use of 4G and 5G APIs, then it could play an interesting role as a strategic partner and channel for operators as a means of accessing developer communities. Ericsson could position itself a potential alternative to the hyperscalers as an aggregation point for developers and network operators to enable both to engage with each other. However, whether Vonage’s existing ecosystem of developers see 5G as a means of competitive differentiation (either by enabling new types of applications or enhancing existing ones) or whether Vonage’s customer base will be interested in leveraging 5G capabilities, is still up for debate.

Vonage Communication Platform future market opportunity

Ericsson-estimate-API-marketTAM

Source: Ericsson Vonage Accouchement Presentation November 2021

During 2021, Vonage found itself under the scrutiny of the activist investor Jana Partners, who urged management to consider selling all or parts of the business. The activist investor believed Vonage’s growing API business was undervalued (compared to pure play API players such as Twilio) and that its overall valuation was weighed down by its legacy consumer VoIP business for which it is better known. In February 2021, Vonage abandoned plans to sell the consumer VoIP business citing the unit’s $600m projected cash flow generation over the next five years.

Top 10 telco cloud vendors

STL Partners recently updated (November 2021) its Telco Cloud Deployment Tracker, a our comprehensive database of live, commercial deployments of virtualised and cloud native network functions (VNFs and CNFs) and SDN technologies by leading telcos worldwide. It builds on an extensive body of analysis by STL Partners over the past eight years on NFV and SDN strategies, technology and market developments with over 900 individual deployments. 

Our recent analysis of vendor deployments between 2018 and 2022 shows the current top 10 telco cloud vendors to be:

Source: STL Partners’ Telco Cloud Deployment Tracker

1. Ericsson – has come from third place in 2018 to top in 2020 and 2022, overtaking Nokia due to its greater number of 5G core deployments

2. Nokia –  remains strong in core, with several 5G SA core deployments slated for launch in 2022

3. Cisco –  has strengths in multiple parts of the telco cloud stack, particularly SD-WAN, transport SDN and orchestration

4. VMWare –  deployments both in telco cloud infrastructure and SD-WAN

5. Huawei – Huawei has declined sharply, owing to political pressures to remove its tech from Western mobile networks

6. Fortinet – has a growing presence in telco networks, linked to both SD-WAN and SASE

7. Mavenir – Open RAN and IP multimedia systems

8. Metaswitch Networks – IP voice and multimedia platforms

9. Affirmed Networks – diverse, cloud-native core and orchestration solutions

10. Juniper –  SDN and telco cloud platform components

Access a trial of our Telco Cloud Tracker here

Previous telco cloud tracker releases

Each new release of the tracker is global, but is accompanied by an analytical report which focusses on trends in given regions from time to time:

Coordination Age: Digital Twin applications for building construction

The Coordination Age is all about making better use of new and connected technologies to improve the management of resources. There are few industries that need it more than construction, which:

  • Generates 39% of industry CO2 emissions and where up to 30% of materials delivered to a construction site can end up as waste.
  • Employs 10% of the global workforce, where there are twice as many fatalities as most industries
  • Is worth $12Trn with an estimated inefficiency of 13% ($1.6Trn)
  • Has barely changed in productivity levels in 60 years between 1950 and 2012 (compared to say manufacturing, which has increased by 900% over the same period)

Construction Industry productivity 1950-2012

Digital Twin

Source: U.S. Bureau of Labor Statistics

As part of our ongoing research programme i spoke to Richard Ferris, Chief Technology and Product Officer at asBuilt, one of the largest independent building information modelling (BIM) consultancy specialists in Australasia. Richard was previously Group CTO at Lend Lease Group, a major ($10bn) Australian multinational construction, property and infrastructure company. He is also a leader in the development of digital twin technology (digital representations) in the architecture, engineering, construction and operation (AECO) value chain and founder and co-chair of the infrastructure working group for Digitial Twin Consortium.

What are the problems to be solved in construction?

Aside from the massive impact on carbon emissions from the production of concrete (which uses coal-based coking in its manufacturing process), there are numerous issues with the AECO value chain. For example:

  • designing complex, multi-dimensional sites in which the distribution of people, and use of energy, goods and services can vary considerably from moment to moment
  • managing the logistics and sustainability of resources
  • managing safety and operations on construction sites and in buildings
  • the energy efficiency and management of buildings and property estates

The construction industry itself is fragmented. There are a few large companies (like Richard’s former employer Lend Lease) and many thousands of contractors, sub-contractors, suppliers and roles where many work for different businesses or for themselves.

Each tends to be siloed into functional units, many are not highly advanced in their use of technologies, and the technologies themselves must be robust to survive the demands of a construction environment.

Information is generally highly siloed and may be stored in many different formats and file types. One area which has more uniformity is in billing, where companies have managed to digitise order and delivery forms to some extent.

However, the processing of bills and claims can still be both somewhat risky (things get lost / challenged, etc.) and generally stressful – after all, who doesn’t hate not getting paid?

What does asBuilt do to help?

asBuilt formally describes that its mission is to ‘harness 3D spatial intelligence to elevate people, performance and planet’. Richard calls it “a platform that is using spatial intelligence to improve the way the Construction industry manages information to support the generation and management of buildings and infrastructure”. 

To do this asBuilt has created a suite of propositions, such as Vault – a digital twin model of built assets, running on Microsoft Azure cloud. 

Despite his twin heritage, Richard prefers to use non-twin language explaining “it’s all about spatial intelligence. This allows people to see and find the information they need more easily. It allows customers to overlay different layers of information – for example environmental data superimposed on to reality captured from a building site and taking actions to manage that.”

asBuilt’s Vault proposition schematic

Digital Twin

Source: asBuilt

asBuilt solutions therefore aims to create a more intuitive and interactive data visualisation tool to help practitioners make better informed decisions.

Visualisation of asBuilt application on mobiles

Digital Twin

Source: asBuilt

A collection of case studies and videos are available here: https://www.asbuiltvault.com/construction. It’s notable that the New Zealand telecom operator Spark is involved in the first case study.

How might this develop in the Coordination Age?

asBuilt’s Vault proposition is a relatively new offering in the construction ecosystem and is the result of successfully using the platform to execute the company’s own building information modelling (BIM) services. 

A vast number of players are engaged in this activity, from classic IT/cloud and analytics giants Microsoft, Oracle, SAP etc., to IIoT players like Schneider Electric, and project collaboration and site progress specialists such as Procore. 

There are a vast range of approaches and architectures that can be applied and asBuilt appears to be an end-to-end solution designed to meet the needs of project management and construction companies. 

STL Partners has also seen de-centralised alternative design approaches by players such as Iotics who provide a versatile multi-party data sharing option. These approaches are not necessarily competitive but complimentary, allowing customers different ways to bring together different elements of the ecosystems they need.

Connected technologies can already help companies to go beyond ‘static’ historical data and connect sensors with ‘right time’ feeds so that decisions can be made in management situations as well as planning and design. 

It remains to be seen how impactful 5G will be this arena. Many challenges need to be resolved first, such as the willingness and ability of parties to share data and establishing trust in the security of connected devices and processes while simultaneously making devices discoverable to only those who should legitimately discover them.

To succeed, 5G connectivity (or 6G, Wi-Fi, Bluetooth, LORA, LPIoT, or whichever connectivity solution emerges in this arena) will need to be sufficiently versatile and reliable to connect in these environments, consume minimum energy, and operate at an infinitesimally small incremental cost.

Telcos may be able to play a role in facilitating the overall change. The obvious route is through their connectivity services where they can provide additional specialised and packaged services to the construction industry. To capture this opportunity they will first need to develop a more in-depth understanding of and the relationships within the AECO value chain.

What are digital twins

A digital twin technology is a digital representation of an existing physical or digital entity:

  • Examples of digital twins of physical entities include twins of simple sensors (such as a temperature sensor), machine components (such as a fan in a motor), a sub-system within a motor (such as a cooling system), the entire motor, or the whole vehicle containing the motor.
  • Examples of digital twins of digital entities include digital twins of data, a digital process (such as an order process or an automation protocol), or an entire digital business value network (such as a centralised data warehouse).

Digital twinning is a method of designing information systems that enables:

  • First visualisation, then dynamic control and emulation/simulation of assets. This can be ‘offline’ from the actual asset in the sense of a model to predict behaviours in different scenarios, or in real-time as a means to control and monitor operations.
  • A more efficient way to manage large volumes of data, where instead of collecting ‘data lakes’ storing every data point, data is organised into more manageable datasets capturing only meaningful events. This can reduce the need for data storage by up to 90%, which can be highly significant. An aircraft’s jet engine can generate Terabytes of data in a few hours of operation, for example. Customers often arrive at the need for digital twins with one or other of these needs in mind, and over time end up utilising both.

No, the Metaverse is not the killer app for 5G

Let’s stop the next cliche before it even starts

Most knowledgeable people now roll their eyes in derision whenever they hear the words 5G and autonomous driving (or robotic surgery) mentioned in the same sentence. But the mobile industry’s hypesters are always casting around for some new trope – and especially the mythical “killer app” that could help to justify the costs and complexity.

And as if on cue, the Metaverse – essentially a buzzword meaning a hybrid of AR/VR with the social web, collaboration and gaming – has captured the headlines.

Facebook metaverse presentation

Metaverse
The Metaverse and How We’ll Build It Together – Facebook Connect 2021

The growing noise around Metaverse technologies – and especially Facebook’s recent rebrand to Meta – is attracting a whole slew of bandwagon-jumpers. The cryptocurrency community has been the first to trumpet its assumed future role – perhaps unsurprisingly, since they tend to be even more fervent and boosterish than the mobile sector. But we’re also seeing the online shopping, advertising and gaming worlds hail the ‘Verse as the next big thing.

Next up – I can pretty much guarantee it – will be the 5G industry talking about millisecond latency and buying a “Metaverse network slice”. We’ll probably get the edge-computing crowd popping up shortly afterwards too. I’ve already seen a few posts hailing the Metaverse as the possible next big thing for MNOs (mobile network operators).

They’re wrong.

The elephant in the room

If you’ve found this article without knowing my normal coverage themes, you might be surprised to read that the single biggest issue for connecting Metaverse devices and users will be real, physical walls.

If you go through Facebook CEO Mark Zuckerberg’s lengthy video intro to Meta and his view of future technologies, you’ll notice that a high % of scenarios and use-cases are indoors. Gaming from your sofa. Virtual living rooms. Hybrid work environments blending WFH with in-person meetings, and so on.

This shouldn’t be a huge surprise. The more immersive a technology is – and especially if it’s VR rather than AR based – the more likely people will take part while seated, or at least not while walking around an outdoor environment with obstacles and dangers. Most gaming, and most business collaboration takes places indoors too.

And indoor environments tend to have particular ways that connectivity is delivered to devices. Generally, Wi-Fi tends to be used a lot, as the access points are themselves indoors, at the end of broadband connection or office local area network.

Basically, wireless signals at frequencies above 2-3GHz don’t get inside buildings very well from outside, and the higher the performance, the worse that propagation tends to be. Put simply, 5G-connected headsets and other devices will generally not work reliably indoors, especially if they have to deliver consistent high data speeds and low latencies which need higher frequencies. We can also expect the massive push for Net Zero in coming years to mean ever-better insulated buildings, which will make matters even worse for wireless signals as a side-effect.

For sure, certain locations will have well-engineered indoor 5G systems that will work effectively – but software developers generally won’t be able to assume this. Airports, big sports venues, shopping malls and some industrial sites like factories will be at the top of the list for these types of solutions. For those locations, 5G Metaverse connections may well be widely used and effective. However, those are the exceptions – and it will take many years to deploy new in-building systems, or upgrade existing infrastructure anyway.

In particular, most homes and offices will have patchy or sometimes no 5G coverage, especially in internal rooms, elevators or basements. (There might be a 5G signal or logo displayed on the device, but that doesn’t mean that the famously-promised gigabit speeds or millisecond latencies will actually be deliverable).

In those locations, expect Metaverse devices to use Wi-Fi as a baseline – and increasingly the Wi-Fi 6/6E/7 generations with better capabilities than previous versions.

What the Meta video tells us

I’m aware that the Metaverse is more than just Facebook / Meta, but the 1h17 video from Zuck (link) is not a bad overview of what to expect in terms of experiences, devices and business models. Obviously there will be different views from Epic Games, Microsoft’s various initiatives around Hololens and Mesh, plus whatever Apple is quietly cooking up, but this is a decent place to start.

The first thing to note is the various Horizon visions that Meta is pitching – Home, Worlds and Workrooms. These are (broadly) for close social interaction, gaming/larger-scale social and business collaboration – especially hybrid work.

Mostly, the demos and visions are expected to take place from the participant’s home, office, school or similar venue. There’s a couple of outdoor examples of enhanced sports, or outdoor art/advertising as well. Virtual desktops, avatars that mimic eye and facial movements and so on.

In terms of devices, there’s a large emphasis on headsets (obviously the Oculus Quest, and also the new high-end Cambria device promised for 2022) as well as discussions of AR glasses, from the RayBan Stories recently launched, to a forthcoming project called Nazare.

The technology discussion is all around the functional elements, not the connectivity. Optics, sensors, batteries, displays, speakers, cameras and so on. There are developer tools for hand and voice interaction, and presence / placement of objects in the virtual realm. There’s lots of discussion around creators, advertising and the ability to own (and interoperate) virtual avatars, costumes and furniture. There are also nods to privacy, as would be expected.

There’s no mention of connectivity, apart from noting that Cambria will have radios of some sort. The section on the “Dozen major technological breakthroughs for next-gen metaverse” doesn’t mention wireless, 5G or anything else.

Metaverse
The Metaverse and How We’ll Build It Together – Facebook Connect 2021

It’s worth noting that Oculus devices and the RayBan glasses today use Wi-Fi. We can also expect the gesture-control in future will likely lean on UWB sensors. Outside of Facebook / Meta essentially all of today’s dedicated AR/VR headsets connect with Wi-Fi or a cable, to a local network or broadband line. (That might be 5G fixed-wireless to the building for a few % of homes, but that will still use Wi-Fi on the inside).

Where cellular 4G/5G takes a role in XR is where the device is tethered to a phone or modem, or is experienced actually on the smartphone itself – think Pokemon Go, or the IKEA app that lets you design a room with virtual furniture.

We can expect the same with the Metaverse. If you’re using a smartphone to access it, then obviously 5G will play a role, just as it will for all mobile apps in 3-4 years time when penetration has increased.

Will Cambria and future iterations feature 5G built-in? Maybe but I doubt it, not least because of the extra cost and engineering involved, as well as multiple versions to support different regional frequency options. Would a future Apple AR/Metaverse headset feature cellular, like some versions of the Watch? Again, that’s possible but I wouldn’t bet on it.

In the second half of the decade, later versions of 5G (Release 17 & 18) will have useful new features like centimetre-accuracy positioning that could be useful for Metaverse purposes – but again, that’s reliant on having decent coverage in the first place. There will likely be some useful aspects outdoors though – for instance accurate measurement of vehicles on roadways.

Facebook Connectivity becomes Meta too

One other thing I noticed is a reference on LinkedIn to Facebook’s often-overlooked Connectivity division, which does all sorts of interesting programmes and initiatives like TIP (which does OpenRAN and other projects), Terragraph 60GHz mesh, Express Wi-Fi and the low-end Basics “FB-lite” platform for developing markets with limited network infrastructure.

Faceboook connectivity solutions

Facebook Connectivity

Apparently it’s now being renamed Meta Connectivity – partly I guess because of the reorganisation and rebranding of the group overall, but also as a longterm part of the Metaverse landscape.

To me, that also indicates that the Metaverse is going to use multiple wireless (and wired) technologies – which aligns with Zuckerberg’s view that it’s more of a reinvention of the Internet/Web overall, rather than a particular app or experience.

Bandwidth-heavy? Or perhaps not….

One other thing needs to be considered around the Metaverse and connectivity. The immediate assumption is that such a “rich” environment, either full-virtual or overlaid onto a view of the real world, will need lots of data – and therefore the types of bandwidths promised by 5G. If we all use Metaverse devices to project “virtual TV screens” onto virtual surfaces, it will use lots of capacity, supposedly.

But it strikes me that avatars (even photo-realistic ones) & 3D reconstructions of real-world scenes will likely need less bandwidth than actual video. Realtime rendering will likely be done on-device in most cases, just sending the motion/sensor data or metadata about objects over the network.

Clearly this will depend on the exact context and application, but if your PC or phone or headset has a model of your friend’s virtual house, or your virtual conference room – and all the objects and people/avatars in it – then it doesn’t actually need realtime 4K video feeds to show different views.

In addition, the integration of eye-tracking allows pre-emptive downloads or actions, so “pseudo-latency” can seem very low, irrespective of the network’s actual performance. If the headset sees you looking at a football, it can start working on the trajectory of a kick 10’s or even 100’s of milliseconds before you move your virtual leg.

That said, the sensor data uplink & motion control downlink will need low latency, but I suspect that will be more about driving localised breakout and peering rather than genuine localised compute. If you’re in a hybrid conference with distant colleagues, the main role for edge-computing is to offload your data to the nearest Internet exchange with as few hops as possible.

(Some of the outdoor scenes in the Meta video from Connect seem rather unrealistic. They show groups of people playing table tennis and a virtual basketball match with “friends on the other side of the world”, which would involve some interesting issues with the speed of light and how that would impact latency.)

Conclusion

In a nutshell – no, the Metaverse isn’t the killer app for 5G.

The timelines align between the two, so where ‘Verse apps are used on smartphones they’ll increasingly use 5G if it’s available and the user is out-and-about. But that’s correlation, not causation. Those smartphones will typically be connected via Wi-Fi when at home, school or work. I suspect the main impact on smartphones will be on the need for better 3D graphics capability and enhanced sensors and cameras, rather than the network side.

Will we see some headsets or glasses with built-in cellular radios, some with 5G support? Sure, there will certainly be a few emerging in coming years, especially for enterprise / private network use. I’d expect field-workers, military, or industrial employees to exploit various forms of AR and VR in demanding situations well-suited to cellular, although many will tether a headset or glasses to a separate modem / module to reduce weight.

Many devices will also include various other wireless technologies too – Wi-Fi, Bluetooth, maybe Thread/Matter, UWB and so on.

But if anything, I suspect that the Metaverse may turn out to be the killer app for WiFi7, especially for home and office usage. That doesn’t mean that 5G won’t benefit as well – but I don’t see it as a central enabler, given the probable heavy indoor bias of the main applications. (I don’t think that cryptocurrency or edge-computing are key enablers either, but those are debates for another day)

 

Reproduced article from Dean Bubley, Disruptive Analysis and Associate Director, STL Partners