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6 July 2020

5G has a long way to go to meet enterprise requirements, says Tencent

By Wireless Watch Staff

Not every enterprise player is champing at the bit to get its hands on private 5G. Chinese Internet giant Tencent – itself an investor in China Unicom – has warned that 5G needs to be far more cost-effective and flexible to meet the needs of most B2B services.

Wang Yachen, general manager of Tencent Cloud Network, told the GSMA Thrive online conference last week that his company had taken part in several 5G trials and projects but had found it, so far, to be too expensive and with some key capabilities being unready for commercialization.

Although Tencent wants to work with MNOs, particularly Unicom, to provide private 5G connectivity for its enterprise customers, it would not rely on the technology in its current state. Features such as quality of service, LAN, network slicing and flexible traffic offloading for edge computing are still not ready for commercial deployment, he said.

“Our enterprise customers are looking for a private 5G network, whether it’s virtual or physical,” Wang said. “But the physical network cost is a very big challenge.” For instance, he claimed that, to deploy a 5G private network for a 1,000-square meter smart factory in China would cost $2m, including the 5G modules, terminals, RAN and core.

And the resulting network would not support all the use cases and topologies required by different verticals, he added. “We need to provide flexible combinations of different technologies – for example, edge computing or slicing, or even light 5G core or public cloud-based 5G core. Those different technologies can be combined or decoupled in certain scenarios. So, operators need to provide very flexible technology solutions for customers,” he said.

The flexibility is lacking not just in the technology but in the business models – in particular, of course, he wants companies like Tencent to be more easily able to offer the 5G network as part of a larger bundle of solutions such as cloud capacity and software-as-a-service. This is an outcome that Amazon AWS, Microsoft Azure and others are also chasing, and Amazon has demonstrated for companies to buy cellular networks in the USA’s CBRS shared spectrum, as well as other technology elements, from a marketplace. But this is a heavy double-edged sword for MNOs, which could be cut out of the loop, or commoditized, in such a webscaler-driven scenario.

But it does reflect the way that many enterprises will want to buy technology – in the same cloud-based, as-a-service way as they already purchase computing, storage and applications.

“A flexible business model means that 5G can be integrated into a total solution, especially with a public cloud service provider,” continued Wang.