Telcos Need to Fulfill the Promise of 5G Before Looking Further into the Future at 6G Technology
It’s odds on that 2020 will be the year that 5G rollouts really pick up pace globally, even if the process might take some time to fully implement. As this is happening, it might be tempting to start thinking about what comes next… but telcos need to fully come to grips with 5G potential before they can begin imagining how a 6G world might look.
5G now, 6G tomorrow?
The business benefits of 5G are not yet fully understood. There are estimates, but it’s probably fair to say that these are based on educated guesswork, given the number of unknown variables involved. Certainly, mass 5G rollout will involve substantial investment (just consider costs such as license fees, hardware and software, as well as service/product and device development). How these costs will be recouped, and how long it will be before telcos can realistically expect ROI, will largely depend on how 5G is monetized – and this in itself is a book yet to be written.
Monetizing 5G is essential before we start thinking about 6G
Before looking too far into the future, telcos need to consider the new revenue streams and business models (including cooperative enterprises) that 5G can deliver. Globally, it will be important to standardize and popularize 5G. There is also much work to be done in the fields of SDN/NFV and network slicing, which, once mature, will allow operators to exploit the full potential of 5G. At the same time, though, telcos can focus on taking the first steps to creating hybrid 4G/5G networks, and can even explore ways to monetize services in this model. In a cloud-based telco landscape, it will be relatively easy for operators to “fail fast” on the road to success, at relatively low cost compared to strictly 4G innovation based only on traditional, physical networks.
There has been much talk about the high-speed, low-latency potential of 5G. Such improvements will certainly create meaningful business value, but again, the precise mechanism by which this can be achieved has not yet been defined. Compare with 4G, which delivers high-level customer experience for most users most of the time, and for which we already have measurable statistics in terms of business value. That’s not to say that 4G doesn’t have limitations of which telcos and customers are aware. For example, in densely populated urban areas during peak time, the average 1.5Mb transfer speed might not be sufficient for seamless viewing of 4K video. This is one case in which telcos will be looking at the possibilities of 5G, and examining how the investment required to address the issue can be related to potential ROI. Another example is the multi-billion dollar gaming industry, where the likes of Google, Sony and NVIDIA are already rolling out 4K streamed gaming services beyond the capabilities of LTE. In this case, telcos focus on the potential of 5G in the B2C sector, as this is one area in which investment could be transformed relatively quickly into additional revenue streams.
Really getting to grips with a new technology so radically transformative as 5G requires equally radical changes in business organization and technological architecture. In other words, telcos need to innovate, and be open to changes that might prioritize partnership over competition. Only when the potential of 5G has been all but exhausted will it be time to turn attention to what 6G may deliver to telecommunications.