5G is among the hottest “buzz words” in the global telecom business for good reasons: it might be transformative in several ways, driving big industry revenue changes; changing the value of network assets and blending “mobile” and “fixed” networks in new ways.
Strategically, 5G will tend to favor “integrated providers” owning both mobile and fixed assets; bigger providers over smaller providers; and capital-rich providers over capital-restrained service providers.
For the PTC community, 5G will change the nature and features of core networks, which is why 5G will be featured prominently at PTC’18. Prior generations of mobile networks essentially changed air interfaces (1G through 4G). But 5G is the first mobile generation that requires and builds on core changes in core networks.
Most important are changes related to the virtualization of networks (network functions virtualization and software defined networks). Though for generations the goal of every next generation network has been a greater ability to supply bandwidth on demand, 5G is the first mobile network to build on virtualized networks as a core requirement.
Virtualization will take many forms. Core networks will operate at lower cost, and gain ability to create on-demand bandwidth and specialized network features by “network slicing.” In other words, it will be possible to create custom networks that have distinct sets of capabilities.
Consider networks supporting “autonomous car” services. For safety reasons, the systems reporting in real time on road conditions, hazards, and incidents will require a very reliable, secure connection, with very low latency and high availability so it can make decisions in milliseconds.
That might also be a “value-added” network, sold at a relatively higher price than a best-effort consumer internet application that delivers content to such vehicles.
Another slice of the network could be collecting other measurements from different devices inside the car that do not require constant supervision, such as servicing parameters that need to be transmitted back to the service center by the car’s service date, perhaps once a year.
Such features might even use overlay networks optimized for very low cost, very low bandwidth and long battery life.
In other words, core networks might be configured with different attributes to match different use cases and price points.
Other forms of virtualization will be key, as well. 5G might be the first mobile network that fully integrates use of unlicensed spectrum and shared spectrum, beyond switching between mobile and Wi-Fi networks. Whole mobile networks might also operate solely in unlicensed spectrum.
Since 5G also will be built on use of small cells, backhaul assets will be quite valuable, boosting prospects for integrated providers owning both fixed and mobile assets.
Also, 5G might be the first mobile network whose revenue streams are substantially driven by services provided to machines, servers and sensors, not human beings.