The original telco central offices of the past had legacy mainframe-like telephone switches with legacy voice features, which was ideal in the 1980’s and 1990’s but are archaic today. With VoIP over LTE in the cloud, these local offices can be re-architected into 5G nano-datacenters that provide very low latency fixed and mobile access and distributed edge computing that will enable new and innovative hyper-converged IT/CT applications and services that foster new business models and network monetization opportunities for operators.
We are at the cusp of a revolution in the telecommunications industry with a number of factors that could shake its foundations. With all the hype that surrounds 5G and its promise of gigabit broadband, massive machine connectivity and millisecond latency, the implications and possibilities presented by shared spectrum, network-slicing and emerging platforms that will mesh public and private networks across licensed and unlicensed spectrum into a new converged IT/CT infrastructure are often overlooked. We cannot think of the network as we did in the past.
The 5G Future: Open & Decentralized Management & Orchestration of Shared Resources
No longer will consumers and enterprises be locked into long contracts, leasing plans for devices, or shackled with boat anchors like legacy hardware SIMs or carrier-specific service provisions. With the inevitable adoption of eSIM and the emergence of Federated Identity Management allowing users to seamlessly transition across carrier networks and geographies, we will see operators come under pressure to participate in and support a new, democratized, multi-band, heterogenous mesh of dynamically and automatically provisioned network and compute resources. Of course, all of this has to happen on-demand,… and it will, like it or not.
Unlicensed & Open Spectrum, Technologies & Standards Create New Opportunities & Threats
Emerging wireless technologies standards and protocols such as CBRS, MulteFire, DAS will enable enterprises and consumer cooperatives to build private networks on unlicensed spectrum to support a wide range of applications without the need for a traditional carrier. With unlicensed spectrum for LTE and eventual 5G, the fair sharing of spectrum will be fostered by LBT (Listen Before Talk) and policy enforcement by regulatory bodies such as the FCC, which will bring about the democratization of spectrum access, use and eventually the connectivity services and applications that run on unlicensed bands.
We are already seeing the industry and competitive landscape changing with a growing number of new players entering the field. Web 3.0 players such as Google, Facebook and others are exploring new ways of bringing gigabit broadband to homes and businesses as we have seen with Google Fiber, which has trialed mmWave-based P2P and P2M solutions for wireless fiber to the home. A growing number of MSOs and existing Wi-Fi players are also poised to enter the race to capitalize on new 5G service opportunities as several already have such as Charter Communications.
The Hyper-Converged Network Will Bring About The 5G Hybrid Cloud
The virtualization of the network and 5G go hand-in-hand and will result in an elastic cloud of network and communciations services that will transcend public, private, licensed and unlicensed spectrum boundaries into what we call the 5G Hybrid Cloud.
The 5G Hybrid Cloud will foster the decentralized monitoring and control of hyper-converged compute, storage and network resources for distributed business and consumer applications. Workloads will move dynamically between the multiple clouds – megaplexes, telco nano-datacenters, and CPE clouds at the home/office – while maintaining high quality of experience and ensuring privacy and security.
The decentralized aspects of the 5G Hybrid Cloud will present carriers and non-carriers with new areas of service and business model innovation that will dramatically change how we view the communications industry going forward as well as the economics. Hyper-converged services and software-defined network functions will allow innovative carriers, MSOs, MVNOs and Web 3.0 players to create new service offerings and new ways of monetizing increasingly-shareable network services and assets from the megaplex to the router in the home or in the shop.
Speaking of decentralized network services, Blockchain has the potential to enable new platforms that can broker shared network resources across the 5G Hybrid Cloud in what could look very much like a public network of PCRF (Policy, Charging and Rules Function) platforms. Smart Contracts could be used to automatically execute transactions and enforce policies between resource owners participating in the 5G Hybrid Cloud. Utility tokens can be used to create a new economic model that supports the shared and decentralized 5G Hybrid Cloud economy whose participants will range from the likes of AT&T to the individual consumer who shares and monetizes their bandwidth and capacity during their off-peak hours.
The Power of Sharing
In a mobile world all we want is service continuity and quality. Customers want to be connected wherever they go on the device of their choosing at any particular moment and place. As further decentralization of network and communications services occurs, the closer we get to a democratized world of shared network and communications services that are locally provisioned.
As the 5G Hybrid Cloud comes into play, players in the communications industry need to acknowledge that business will not be business or industry as usual. 5G will bring about an ecosystem of technical and business innovation as it will support shared resources leveraging multi-tenancy and virtualized network resource slicing models. New architectures based on Mobile Edge Computing, Cloud-RAN (Radio Access Network) radio access network and local CDN services will emerge that deliver new on-demand and “turbo” experiences.
New 5G managed service offerings can include:
- Policy-based control and charging: Turbo HD, Video AR/VR for bandwidth and latency on demand as Net Neutrality is relaxed,
- Cloud-based managed CDN services for streaming gaming and multimedia, and Unified Communications as a Service,
- New network service monetization techniques – targeted ads, Turbo buttons, video and games on-demand, or mission critical network reliability for remote care and medical monitoring,
- IoT: connectivity (LTE, WiFi and fixed networks) with resiliency and security as a service,
- Experience Continuity: seamless handoffs of video and interactive content across venues, networks and connectivity modes,
- Encryption and privacy key management: DRM with subscriber authentication and payment for ultraHD video, along with privacy-as-a-service.
The winners in this new world will be those old and new players that mobilize capabilities in support of the market objectives of optimizing the utilization of assets and delivering high-quality shared services to the customer. Shared services will be a significant factor in closing the current gap in experience continuity and driving the reinvention of the telecommunications industry that is the 5G Hybrid Cloud.
Imagine a new 5G Hybrid Cloud marketplace:
- An open and autonomous exchange for trading Internet connectivity, caching/storage resources, datacenter CPU and application resources using a new intra-network micropayment medium of value and resource exchange.
- Participants (resource owners) may opt to allow trusted and authenticated partners to purchase or share resources within new sharing economy business models supported by new, omni-convergent real-time billing systems beyond prepaid, postpaid, subscription services of today.
- New monetization models and functions supported such as context-based ad revenue sharing, IoT revenue sharing, and demand-based billing across applications, networks, venues, and across devices.
Realizing The 5G Hybrid Cloud Dream
Before we can benefit from the promise of 5G Hybrid Cloud, there are a number of key technologies and standards across multiple spectrum bands that need to take root and mature to drive the democratizing dynamic of a shared 5G economy:
- Support for sub 1 GHz IoT, TV white space spectrum, which solves the in-building penetration issue of mmWave, for not only voice/video/data but IoT services: LoRA, NB-IoT, LP-WAN, etc.
- Citizens Broadband Radio Service (CBRS) spectrum, which provides long range capabilities and unique spectrum sharing for carrier-agnostic deployments.
- Support for 5GHz LTE‐U (LTE-Unlicensed) over WiFi with Multefire, which solves co-existence challenges with LBT (Listen Before Talk) protocol.
- Support for high frequency wireless over unlicensed bands that provide Gbps+ speeds such as WiGiG and mmWave that can enable new public and private fixed wireless local loop solutions.
A robust, efficiently managed 5G infrastructure will allow these and many more impacts to accrue in the near future, leading to multi-faceted societal change. All stakeholders – healthcare institutions, educators, broadband players, governments, media/ entertainment businesses, and consumers – face a number of barriers to further adoption and utilization of these technologies. However, organic efforts that have been nurtured and encouraged by governments like the FCC in the US or Ofcom in the UK have begun to show that these obstacles can be overcome. In light of these promising trends, policymakers should continue to finely attune their involvement and focus first and foremost on implementing mechanisms to spur further adoption and utilization of broadband across the 5G Hybrid Cloud continuum for societal benefit and improvement.
Implications for Business Leaders
Carriers, MSOs and MVNOs need to start thinking outside of the box as the challenges posed by private networks over unlicensed spectrum bands are inevitable and will decentralize and consequently democratize the network. Carriers should start looking at strategies to address these imminent threats and determine the value opportunities and their role in the emerging 5G Hybrid Cloud ecosystem. Consider new sources of revenue that go beyond ads and subscriptions but focus more on sharing of resources while differentiating on service quality and continuity.
Government leaders should understand the new economics and opportunities that the 5G Hybrid Cloud will offer in terms of the roll out and realization of the 5G promise for their Smart City and Smart Government initiatives. This will entail revisiting your digital strategy, technology investments, solution architectures, digital invention programs and vendor relationships with a 5G Hybrid Cloud lens.
System integrators and IT service providers should think beyond cloud computing and consider how their enterprise customers can benefit from private cloud and private networks as part of their digital transformation and reinvention. Understand the evolving economics and the opportunities that the 5G Hybrid Cloud provides to accelerate digital initiatives such as IoT and Industrie 4.0 efforts.
Enterprise business leaders should begin understanding what the 5G Hybrid Cloud can enable in terms of new business capabilities, product and service enablement (e.g. AR/VR, telemedicine, connected car and autonomous driving), and business models.
If you are interested in getting additional insight on the topic of 5G evolution and strategies for your enterprise and the possibilities 5G presents for your digital future, contact us for an inquiry session with our neXt Curve analysts and consultants.
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by Akshay Sharma
Research & Advisory Fellow, neXt Curve
Managing Director, neXt Curve
September 14, 2018
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