#2 – 5G will be open for Business
So far, 5G has been made available to consumers in many parts of the world with, if not revolutionary, then at least substantially improved user experiences. 5G for the enterprise markets, on the other hand, has so far been an attractive but elusive promise that seems yet to materialize. However, we believe this will change in 2021, as all the pieces seem to finally fall into place: Standalone (SA) 5G which is necessary for delivering low-latency/high-reliability connectivity is ready, (local) 5G spectrum for dedicated networks is being made available by regulators in several countries, and dedicated network solutions for enterprise use cases are being launched by the telecom vendors, incumbents and newcomers alike. Together, these factors will enable many operators to launch new B2B services such as smart factories with remote operations and predictive maintenance, smart hospitals as well as 5G-powered TV production and broadcasting. Nevertheless, enterprises are looking for end-to-end digital service delivery solutions, not just network ones, and therefore operators and vendors must be aware that they won’t be able make this happen all by themselves. For enterprise 5G to really come to fruition, finding the right partners across the ecosystem will be vital.
So far, 5G deployments around the world have focused mostly on consumers and enhanced mobile broadband (eMBB) and have been non-standalone (NSA), i.e., LTE-anchored and without a 5G Core. In South Korea, there are now over 9 million 5G subscribers as of November 2020, consuming about 27 GB per subscription per month (roughly three times more than their 4G-only counterparts). In the US, the new T-Mobile is leading the national coverage effort. In Europe, many countries have started 5G rollouts, yet with so far relatively few subscribers in dense urban areas. On the B2B side, however, deployments have thus far been limited and it is only a few markets like South Korea where operators have been able to make waves with enterprise use cases as well through, e.g., smart factories.
In order to enable enterprise 5G use cases such as the ones mentioned above and make them attractive to potential enterprise clients, standalone (SA) 5G (i.e., without LTE dependencies) is often necessary. As opposed to NSA, it is SA that will enable enterprises to profit from, e.g., ultra-low latencies and dedicated network slices. T-Mobile US has become the first operator to launch a nationwide standalone network in 2020 and China Telecom has recently announced that it has followed suit. In 2021, SA is set to gain traction with several other operators such as AT&T, Telefónica Germany, Elisa Finland and NTT DoCoMo having announced launch plans.
Furthermore, 5G deployments (whether NSA or SA) require suitable spectrum being available. Spectrum auctions for dedicated 5G bands (700 MHz, 3.5 GHz, 26 GHz, 28 GHz) have at this point been held in many countries worldwide, yet such national licenses intended for macro-network deployments offer only limited advantages for enterprise use cases. Often, enterprise customers will require high reliability, ultra-low latency and/or want to have full control over their entire data flow end-to-end. Aside from network slicing, it is private networks that can make this possible. Several countries have indeed either already made spectrum available directly to industrial enterprises (with Germany being the prime example but also, e.g., France, the UK, the US, Japan and Chile) or reserved certain bandwidths for local deployments that are still to be awarded/auctioned (e.g., Sweden, Finland and Australia). Some examples of actual private 5G deployments are Lufthansa in partnership with Vodafone and Nokia in Germany in an aircraft hanger for remote inspection of engine parts, Ford in the UK to speed up battery production, as well as Fujitsu in Japan for video- and AI-based behavioral analysis and efficiency improvements at a manufacturing plant.
In terms of overall vendor support, SA solutions (i.e., across RAN and Core) are now available from the main vendors (e.g., T-Mobile is using network with equipment from Ericsson and Nokia). Furthermore, private network support is now also available, with, e.g., Nokia announcing the first commercial 5G SA private network solution in July 2020 and also ORAN vendors such as Mavenir now competing in this space with cloud-based “in-a-box” offerings that allow enterprise customers to run a private network entirely on-premise.
However, the enterprise market will require more than simply mature 5G connectivity. Enterprises are facing a complex landscape of connectivity technologies, where cellular solutions are just one of many possible options. Having been available and moderately mature for some time, wireless solutions still represented only 6% of new industrial nodes in 2018. In order to cater to the enterprise market effectively, datacenter and platform capabilities, analytics ecosystems, extensive enterprise customer channels, system integration as well as transformational know-how will all be required. As a matter of fact, no single player currently has the end-to-end capabilities to serve the industrial 5G market alone. Therefore, having 5G ready for Business is just the first step, and it is crucial for anyone aiming to capture this market to recognize the importance of the ecosystem early on and to develop new types of partnership models based on mutual value creation.
In sum, enterprise 5G is all set to take off in 2021, made possible by several critical enablers having matured as well as an emerging ecosystem of players that will collaborate in order to serve the plethora of business needs within the digitalizing B2B arena.