As cellular connectivity moves into new industrial and IoT use cases, and out of MNO-controlled spectrum, the operator will have to fight for its place in the enterprise 5G market. Announcements from Qualcomm and Nokia last week highlighted the way that wireless IoT services and the edge cloud could create huge new opportunities for service providers – but those providers no longer have to be the MNOs.
We have often discussed the hefty rod that the 5G industry has made for its own back. In promising a network that would provide each industry sector with exactly the connectivity it needs, the creators of 5G platforms may end up undermining the business model of the mobile operators for whom 5G was largely created.
The cost of 5G is high – in terms of service provider deployment costs, but also the vast numbers of R&D hours and dollars which have made it the broad, well-architected solution it looks to be. To justify that cost, it needs to support more revenue models for the industry than just faster mobile broadband. It is envisaged as a diverse connectivity platform which can offer far more than just mobile connectivity, and actually help enable digital transformation for many industry sectors.
The shadow over that vision is that the MNOs may not wish to implement all the specialized capabilities that individual industries may need. MNOs have already talked about the difficulty of identifying a business case for ultra-low latency services in the short to medium term at least. These are hard to deploy and support, and it is unclear how much industries would pay to have them, and whether the MNOs are the organizations they would trust to deliver them anyway. After all, most MNOs have balked at the challenge of finding a profit model in simple in-building enterprise coverage.
But the failure to address the weakness of in-building cellular solutions has led to other parties chipping away at the MNOs’ dominance of wireless connectivity. Enterprises which need reliable wireless signals indoors have turned to WiFi, either managed inhouse or by an integrator or, more recently, a cloud-based hosted services provider.
The same model can be enhanced further by adding private enterprise cellular networks into the mix – again, either managed by the enterprise and its IT suppliers, or by a specialized service provider. This has been more challenging than WiFi because it has still needed the MNOs’ spectrum in most cases, and there has been the issue of multi-operator support (so that employees and visitors can use the inhouse network regardless of their mobile contract).
Several developments are breaking down that barrier too – LTE (and in future 5G) in shared and unlicensed spectrum; edge computing; neutral host small cell platforms, virtualized packet cores which can be installed specifically for an enterprise, on-premise or in the cloud.
Combining those elements creates a self-contained mobile network, integrated with edge compute and storage facilities, which can be deployed and managed by a non-MNO, and can support far more than just standard mobile broadband connectivity. Instead, it can be configured for the particular enterprise, to support the cloud services and IoT or critical comms capabilities which are required.
All these elements will eventually evolve towards the vision of network slicing, in which each application or enterprise can dynamically create a virtualized slice of optimized connectivity for as long as it needs it. But long before that concept is fully implemented, there are several steps enterprises can take towards seizing back control of their wireless connectivity – and operators will need to beware of being sidelined in the value chain as that happens.