At the Asia Tech X conference this week in Singapore, telco executives and analysts shared some lessons in building 5G networks. In a panel discussion session titled, “New Services Leveraging on the Capabilities of 5G Networks,” the consensus was that 5G doesn’t offer much value for traditional operators. At least not until 5G SA core network is widely deployed and available.
Note that 95% or more of deployed 5G networks use Non Stand Alone (NSA) mode, which requires a 4G LTE/EPC anchor for everything except the RAN (which uses 5G NR).
This panel session was supposed to address the following:
- How can telco operators further monetize 5G networks?
- Emerging technologies to differentiate from competitors
- Maximizing opportunities with new IoT consumer products to generate revenue
Once you register (free), you can watch a replay of the session here.
Olivier Rival, a Boston Consulting Group partner based in Singapore, said a breakdown of the 5G value chain did not make for happy reading for telcos. “Connectivity is about 12% to 18% of the total value of 5G – not much more than that,” Rival said.
Julian Gorman, head of GSMA Asia-Pacific, said APAC is the leading region for 5G. He said that 4G revenue would peak in 2023 at which time 5G would take over. With respect to consumer services, video streaming, high speed Internet access at large sports arenas are the most popular to date. However, 5G users are looking for lower cost service and find that early coverage is spotty. Gorman told the audience that the industry needs to do a lot of work in managing 5G expectations:
“For three years we’ve been saying [5G will deliver] 1ms latency, 10Gbit/s peak data rate, ‘enterprise is going to change overnight.’ Those peak technology speeds are not what we should be talking about. We should be talking about how you’re going to change lives and what people are going to use it for. We can play a big part in that value chain and step above connectivity. But we need to act with a better story as an industry.”
Manjot Singh Mann, CEO of Singapore’s M1, said his company is transitioning from 5G NSA (launched in September 2020) to SA, but didn’t say when that might happen. He said that 5G NSA is really 4G+ only providing eMBB service at a faster speed than 4G-LTE. On the other hand, 5G SA is a “game changer.” It provides a rich set of capabilities like lower latency, faster speeds, network slicing, B2B services, B2B2C, etc. There needs to be one driving factor that makes 5G technology relevant but that hasn’t been identified yet. Singapore government and regulator is looking at 5G in terms of its smart nation objective. That puts telcos in that country in a good position to realize the 5G vision.
“As long as telcos keep talk about 5G in terms of speeds as a differentiator, there’s no value in it. You have to find a value addition (for 5G) to succeed. Where will that value add come from? You’re always putting more and more into CAPEX on diminishing (revenue) from xG’s deployed. If we don’t create value from 5G we’ll always be asking this question. The value in Singapore will come from B2B and B2B2C applications which M1 is now monetizing to create value.”
M1 has undergone a digital transformation over the past 18 months. It has changed its IT stack and restructured itself to become a digital service platform. It was now “92% in the cloud” with a fully cloud-native BSS/OSS, he said.
“That allows you to have quick integration with partners that you bring onto your ecosystem so you can provide services to your consumers that are contextualized and real-time. I think that is where our future lies because we have been able to create this digital platform. We are now onboarding our partners so we are able to deliver those services to our customers.”
Changing people and processes has been another challenge. M1 has been trying to build a more innovative, risk-taking culture. “It takes a lot to get that culture going,” he added.
Indosat Ooredoo (Indonesian) COO Vikram Sinha said his company was trying new ways of working, setting up teams that break the functional silos and embrace risk and reward. No one function can solve all these problems, Sinha said. “As leadership team, we need to tell our teams it’s OK to fail, but fail fast and move on. I’m happy to say we have seen some change,” he added. Augmented reality, via a Snapchat partnership is being pursued for B2B applications. “5G is a journey. For telcos is about getting the ecosystem right, with partners and developers.”
Ian Watson CEO of Cellcard (a Cambodian network operator) said his company is working with GSMA to deploy 5G. Currently, Cellcard has more than 3100 4G-LTE cell sites deployed. Content creation, AR and VR for consumers are targeted 5G use cases for Cellcard. B2B market will be a longer investment for Cellcard, which is not a business hub like Singapore that has many businesses.
A fireside chat session titled, “Real Life 5G Applications in Asia,” was to address these points:
- Consumer 5G Applications taking place in Asia
- Delving into consumer pick up rates and expectations in Asia
- Enticing consumers through new devices and services at attractive price points
The participants were Aps Chikhalikar, Head of TMT, Asia Pacific Japan for Service Now; and Nicole McCormick Senior Principal Analyst Omdia.
Once you register (free), you can watch a replay of that session here.
Separately, Singapore plans to invest $50 million in a program to support research on AI and cybersecurity for future communications structures, Deputy Prime Minister Heng Swee Keat announced this week. As part of the Future Communications Research & Development Program, Singapore plans to set up new communications testbeds in 5G and beyond-5G, support technology development, and build up a local talent pool.