5G? 6G? Hypes, geopolitics and business
Updated: May 28, 2020
As I have been saying for some years already, partly for fun - partly seriously: “Every odd G is not really needed”, maybe we need to wait for 6G? In any case, I will be enjoying my retirement if and when that happens …
As someone who has been engaged in practically every G, it could be said that, although 1G (analogue) covered a clear customer need, it was fragmented and only covered limited parts of the world – so 2G, the first digital G was definitively needed – as it achieved almost global reach and scale – since, after some years of 2G also the US operators accepted the commercial reality and benefits of a global standard, offering global scale and interoperability. The Chinese, however, kept their own separate standard until they had built up their own national industry – and today Huawei is one of the world leading telco suppliers!
Having been engaged in the early days of 3G, I remember that “3G should do everything 2G did – only better”. 3G eventually did not do much better – as it only provided a very limited mobile internet. 4G, on the other hand, provided the first real mobile internet – so 4G was clearly needed. When we now are facing 5G, we see a similar situation to 3G. 5G is going to “do everything 4G does, just better – plus a whole lot more!” The only problem is that very few know or understand the “whole lot more”, i.e. the business models for all the potential 5G use cases, which to a large extent are based on B2B or B2B2C models and how to work with the vertical sectors. Not all these use cases will scale – and operators will in many cases need to partner with players that can provide solutions for them. These players may or may not need the operators – and will certainly grab important parts of the value created.
With every new G, and in particular with 5G, the ecosystem is opened up for new entrants, be it additional operators in a market, private 5G networks owned by large companies in the vertical industries, new MVNO’s, OTT players, IT companies, platform providers or system integrators - or even device manufacturers seeing a chance to extend their scope into the ecosystem. New technology also opens up for new players capitalizing on their IPR.
Backtracking 1½ decade, the Next Generation Mobile Network (NGMN) Alliance was started by a set of mobile operator CTOs, mostly from the classical incumbent / dominant operators on the world scene at the time, and a few mobile equipment vendors. This was at a time when operators had spent too much money on 3G - and when 4G was already in good development within 3GPP – and the CTO gang wanted to take control over their further network development. After some years, NGMN published their 5G White Paper early 2015 – and, like for 3G, 5G was going “to do everything 4G does, just better – plus a whole lot more!”
The whole lot more of 5G is really about digitalization of industries (and society) – and requires industries in every vertical sector to figure out how to do digital transformation and how to use 5G for it (if relevant). On the operator side, if they shall have any revenue boost out of 5G, then they have to figure out how to work with verticals to cover their needs (which they might not even know yet) – and ideally get the solutions to scale. Otherwise every solution will need some form of custom build – and could end up being expensive to provide and/or purchase. The foreseen solution to this for operators is of course “network slicing”, i.e. a way to make custom tailored packages from a standard network solution. Network slicing thus requires a very flexible support system to manage the network, its many configurations and every business model towards the verticals or business customers – and, as history has shown, while the actual 5G network may be available, this support system might take a while before it is there. In any case, we can foresee that this is a whole new space for new entrants (in the IT space) to get a part of the 5G value creation.
In the meantime, quite a few operators are pushing ahead with 5G networks and handset makers are coming along with 5G handsets – and consumers will get 5G handsets with “even more speed” (i.e. more of the same) than 4G (see also my earlier article on 5G handsets). Building a 5G network is another mobile network on top of previous G networks, hopefully with a certain amount of reuse, however, 5G will require a lot of Capex whichever way it goes. If the dreams of some politicians come true, i.e. with all urban areas and major roads covered with 5G (or even nation-wide coverage) with extreme bandwidths and ultra-low latency, possibly using mmWave spectrum, then it will certainly be expensive. It will probably be more of a nightmare – and hopefully we will wake up.
What seems to be new this time around (i.e. compared to earlier Gs) is the political awareness and “dreams” around 5G. Coupled with an increasingly tense geo-political situation, with politicians wanting their country or region to “be leading on 5G”, this has generated a huge attention around 5G. In the EU, it has been an ambition for a while to “take back the lead on 5G” (as we lost out on 4G) – and thus the EU created their 5G Action Plan in 2016. Even worse is the latest from Japan that wants to do the same for 6G (“as they lost out on 5G” - (a little early to say?). The only problem is that they plan this for 2030, i.e. ten years from now – and 5G is not even a reality yet! This is also coupled with similar ambitions in China – while Europe and the US keep battling over 5G for the moment – and the US is battling everyone (over technology leadership).
Of course, it is well-known that a new G comes every ten years (at least so far). Simply put: 1G came in the early 80s, 2G came in the early 90s, 3G in the 00s, 4G in the 10s – and 5G in the 20s. When that is said, the “real” 5G will probably not come for another 3-5 years (meaning digitalized verticals) – and 5G is much more than what previous Gs ever were.
You could say that the visions for 3G and also 5G were very much CTO- or technology-led with unclear or totally missing service requirements, except that everything was going to be “better”. For 5G the situation is somewhat different, however, as the telco CTOs have slipped out of their controlled telco environment. With 5G everything is internet based, the SA architecture is a Service Based Architecture – and everything is opened up – which again means that development and innovation are opened up towards the whole world. This has a lot of potential, but also quite a few changes to the world of telcos. If we look at how the internet is maintained today, it is all based on a “stable” platform – with incremental development on top.
This leaves me with the potential conclusion: Could 5G be the last G? Could we see a future with a “5G core network” as a “stable core”, with similar incremental development and innovation on top? I can potentially foresee a new RAN, but it is not given that it will be a 3GPP-based one – or there could be several. Therefore, I am inclined to say: 5G is the last G! There will be no 6G! This seems like a likely logical conclusion. However, we also know that a G means new business for many people. It is necessary for equipment manufacturers to have something new to sell. Regulators need to sell new spectrum – and researchers need something to research on – and politicians need stories for their legacy (as long as they are compatible within their election periods). On top of this, every G opens up for a number of new entrants in the market – so the push for a “6G” will probably be strong. Time will show. As an engineer, I do enjoy new technology. However, with a business mindset, I would question the business sense in much of this. Someone will probably make money from a new G – but it is not clear it will be people pushing it in the first place. Maybe there will be something called “6G” eventually, but it will have very few similarities with what we today consider a mobile network? Who knows ...
As I started off saying. It is amazing to see how the G-hype has spread across the world these days – not only for 5G, but even for 6G! From my perspective I would suggest the following:
Forget about 6G (for now)! It might never happen (at least, it will not be relevant in my time). We all need to work hard to realize the true benefits of 5G, however, which is about digitalization of society and its industries. This is not a simple task. It will be costly for network operators to build the infrastructure. To compensate for this, vertical industry players might even build their own private 5G networks – and they will need to get a return on their investments somehow. They might also want someone to operate their networks – which might not be the telcos. It could equally be telco suppliers doing managed services based on their existing scale in that space.
For the classical telco suppliers, 5G might be disruptive too. Operators are always looking for cheaper networks and more flexibility for development and innovation on them. With 5G being much more of an internet-based network, disaggregation between software and hardware is a means to achieve that. Several MNOs and MVNOs have been exploring software-based solutions for this (obviously welcome for new players) – and various IT / software companies are also positioning themselves in that space. In addition to the more disruptive experiments, there are also several industry initiatives. In any case, although the existing scale of classical telco suppliers may be to their benefit, including large IPR portfolios, it is not given that the classical telco vendors are those that will benefit from 5G in the end. It could also not be the standard telcos that provide the services, maybe “software telcos”?
If at all relevant in terms of digital transformation, industries need to figure out what they can use 5G for, what their requirements are – and how and if they want to engage with operators. They could just as well engage with other players in the ecosystem, be it telco vendors, OTT players, IT companies, platform providers or system integrators – companies that may be able to provide relevant solutions for them – or even aggregate or abstract network slices from operators.
What 5G eventually will turn out to be is still up for grabs. In the most limited case, it will only be another and “faster 4G” for consumers and handsets. I hope not! What is interesting, however, is how we can achieve the true vision of 5G – and who will eventually make money from it. Everyone has a lot of work to do. It will be an exciting time going forward 😊