It is little surprise that the turn of the year generally sees industry reflection and a set of predictions concerning what might appear. This year has proved little different.
We have seen predicted trends in data protection, cloud development, and on the transformative power of data center interconnect. Traffic demand shows no signs of slowing and the drive to next generation networks likewise is not easing. Predictions apart, near term 800Gbps platforms are within view, declare major manufacturers.
However, most commentary is still dominated by continuing discussions of 5G, and what will happen in what is widely considered a gateway year for the technology. Based on the current news flow, the final stages of 5G launches are now in high gear both in regards to network planning and more particularly in terms of business activation.
Will 5G bring the benefits now expected? The picture is probably cloudier than many would like. The jury is still out, variously deciding that many 5G value propositions remain uncertain, but also that advanced operators have already determined to target six to eight use cases as priorities. Major surveys of service providers expect a rollout spread over four to five years, better capital expense than originally predicted, but unfortunately only a “marginally positive” business case. Some argue we need a leadership manifesto for 5G to deliver on expectations.
Other studies see a major wave in “intelligent connectivity” of AI, big data, IoT, and 5G as the leading wave of progress. Digital indoor systems represent another challenge for advanced wireless technologies including 5G but equally offer possibilities for new business models, particularly in Asia Pacific.
Some, particularly in developing countries, caution what they consider premature deployment pulling potential pressures in investment and over regulation. Cost remains a major feature of the 5G debates, particularly for major service providers which are expected to make the required investment.
We’ve also seen a debate on the actual difference prone to be experienced by customers between advanced 4G and 5G. And if that wasn’t enough, we’ve also seen a major marketing spat in the U.S. over the whole definition of 5G.
As we’ve noted before, national policymaking plays a key role in the deployment of vast new infrastructures including 5G, and invariably involves debates on economic leadership implications. The U.S. conducted its first spectrum auction in 5G with a comment from the Federal Communications Commission chairman, Ajit Pai, enabling U.S. leadership to be maintained in the space. In Europe, we saw further 5G preparations, now in steps toward regional harmonization in the 3.6GHz band.
5G apart, regulatory action might be working, however we shouldn’t hold our collective breath. Recent statistics out of the U.S. show the digital divide is actually narrowing, at least regarding access to fixed broadband services.
Some take the view that new services, particularly in the 5G era, will drive network investment. Nevertheless, there is a growing understanding that there are secular transformations predicted, expected, and underway in the industry itself, particularly in how service providers will be structured, and what they should do in the future.
Major drivers to a much broader digital transformation are likely. According to one report, Telcos face continuing challenges with digitalization of processes particularly where legacy systems, evolving software, manual processing, and inherent product complexity are involved. Another view argues that modernization of legacy networks should deliver clear business benefits. It is a complex, not to say, difficult picture. Some mused that perhaps it’s no surprise to learn that some service providers might be hesitating in their network transformation aspirations.
Other secular trends are evident, particularly in using human capital. Skill shortages may be forcing major providers to seek key research and development initiatives well outside their traditional home territories. Efficiencies in human capital also means a better take on diversity and inclusion. Thankfully, we are seeing better measures and improved practices communicated around the industry to help things along.
In all the tumult accompanying new year predictions, we were reminded again that the basis of the industry is the capability to provide connectivity when a subsea cable outage pushed a Pacific island nation to near cut off from the outside world. Reports are that services have been fully restored, but it remains a timely reminder of the critical importance of an industry in constant change, and likely, continued upheaval.