5G Advanced represents an opportunity for the mobile operator industry, and their wider ecosystem of partners to grow more value from their investments in 5G technologies.
The new capabilities, alongside the maturing market for existing 5G services offer new chances for new revenue channels, across a variety of scenarios. 5G Advanced is expected to power explosive growth in 5G mobile subscription adoption as well as mobile data usage. According to GlobalData’s Global Mobile Broadband forecast, 5G data traffic is expected to grow by an average of 39% every year between 2023 and 2028, to reach nearly 200 Exabyte per month, or nearly 34 GB of usage per month per 5G subscriber. Adoption will be up as well with global 5G adoption expected to reach 84% by 2028. This increase will be driven by a myriad of upcoming use cases support by 5G Advance networks.
Differentiated network services for enhanced user experience
With advances in 5G network architectures across RAN and core, operators can offer enhanced mobile broadband speeds, lower latencies and create virtually separate mobile networks on top of shared infrastructure through end-to-end network slicing. For the consumer market, this means the ability to offer differentiated network services in support of improved consumer experiences. For example, there is opportunity to position 5G networks to support improved gaming experience for the fast-growing gaming market, particularly around cloud gaming.
GlobalData expects global cloud gaming revenues to reach US$30bn by the year 2030, up from only US$1bn in 2020, offering operators a chance to become an integral part of a greenfield value chain. Cloud gaming services stream content to end user devices, which send inputs back to the cloud gaming servers.
For a a good user experience, networks with both high bandwidth and low latency are required, making it a great use case for a 5G network with deterministic performance parameters built it. Forward thinking operators are already developing partnerships with cloud gaming providers to improve 5G revenues. Nvidia’s GeForceNow has made partnerships with 5G network providers like Japan’s SoftBank, South Korea’s LGU+, Australia’s Pentanet, Malaysia’s Yes and KSA’s Zain.
Gaming
Gaming is just one area in which operators can provide differentiated user experiences with 5G. AR and VR content also have similar network performance demands to cloud and high-performance gaming. LGU+ in South Korea positions its 5G network as the best way to support its subscription-based U+ Dive which provides exclusive VR and AR content to users.
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By GlobalDataBeyond content, there are other areas to explore, Singtel for example offers consumers a “5G Security as a Service” (SecaaS) to consumers. This pairs a virtual network slice with security services from partner Palo Alto Networks.
The enhanced speed and latency are also making 5G a viable option for premium home broadband. 5G is increasingly being used as an access technology for fixed broadband (FWA). While currently many operators position it as a value option compared to high speed fiber, 5G Advance’s increased downlink and uplink speeds and lower latency can enable the technology to be positioned as a premium service. GlobalData expects FWA to be the fastest growing fixed broadband technology over the next 5 years, as operators roll out 5G FWA. Operators like Zain are already seeing rapid take up of their 5G FWA service in KSA.
5G Networks as a platform for third party services
With 5G Advanced 5G networks are set to become cloud-based platforms, with network functions available as virtual services. This allows 5G network function to be exposed via APIs to a broad community of developers, allowing for 5G networks to be a piece of value chain in a much broader range of applications. Currently he Linux Foundation’s CAMARA, which receives telecoms coordination via the GSMA’s Open Gateway Initiative is developing a set of open APIs to help telcos monetize their 5G networks, through services like device location, signal strength, carrier billing, call control, and guaranteed quality of service via network slicing. This opens the opportunity for B2B2X business models for operators. Application developers can enhance end user experience by building in deterministic latency for their apps through an API call. While this is an emerging area, players like Ericsson, Nokia and Huawei are already working with their operator customers across North America, Europe and Asia, to explore how APIs can be a route to monetization of 5G services.
While there are many possibilities for deterministic networks, operators still need the foundations in place to support these new services. This includes ensuring use of 5G SA architectures, which use 5G NR in the RAN, delivered by 5G cloud native core to enable end to end network slicing. Beyond architectures, networks will require sufficient spectrum to support high bandwidth requirements. 5G networks will also need to become more open to enable new business models. Telco networks of the past of operated as walled garden domains, separate from broader IT.
The Open Gateway Initiative will help, but operators need to advocate to developers the benefits of developing applications using 5G resources. Further, operators will need to actively seek partnerships with ecosystem to develop go to market propositions based on 5G services, as consumers do not want to be sold a technology enhancement, they are looking for experiences and quality of life improvements.
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