Will 5G investment create new service providers?

5G network testing
Investment in 5G technology will create new service players who will be disrupting the current service provider landscape, said Strategy Analytics.

Some of the existing telecom service providers, who will be investing heavily in 5G technology, include Verizon Wireless, AT&T, China Mobile, among others.

“5G will enable new services, new business models and new type of service providers, such as digital virtual network operators (DVNOs) – an evolution of the mobile virtual network operator (MVNO),” said Susan Welsh de Grimaldo, director Wireless Operator Strategies at Strategy Analytics.

Digital virtual network operators (DVNOs) will be able to leverage ‘network slicing’ from 5G network operators’ platforms to spin up new network slices – using self-provisioning –  to offer specific services for targeted verticals and/or consumers, bundling access and performance requirements with managed services for each specific segment of users, said Strategy Analytics.

5G in the US

Incidentally, FCC has approved guidelines for 5G spectrum in the US, paving the way for the rapid deployment of the technology.

Intel Chief Executive Officer Brian Krzanich said: “Consumers and businesses are going to start benefiting from 5G much faster than generally expected, and the FCC’s bipartisan decision today is crucial to accelerating this phenomenon.”

Telecoms are keen on 5G because 5G will be exponentially faster and better than current wireless broadband. 5G will offer more consumer choice for home broadband. 5G can connect many more devices to accommodate the explosion of the Internet of Everything.

“Verizon is looking forward to continuing to lead the way to this future by deploying commercial 5G service next year and unleashing the benefits of high frequency spectrum,” said Verizon Wireless, welcoming the FCC decision on 5G guidelines.

FCC Chairman Tom Wheeler said: “We are seeing the industry gearing up to seize this opportunity. AT&T, Sprint, T-Mobile and Verizon are all moving forward with plans to test and develop 5G technologies.”

ALSO READ: FCC announces 5G spectrum in frequencies above 24 GHz

“Last month, Sprint demonstrated 5G connectivity offering speeds up to 4 Gbps at the Copa America soccer tournament in Philadelphia. Verizon recently announced the completion of its 5G radio specification, which provides guidelines to test and validate 5G technical components,” said Tom Wheeler.

5G to take off in a big way

These new players will compete with traditional telecom service providers to offer new “as a service” business models and network slicing for dynamic on-demand, service specific network provisioning to address the needs of particular use cases and services, said Strategy Analytics.

There is a race to adopt 5G mobile technology. South Korea and Japan plan to deploy 5G service by the time they host the Olympics, in 2018 and 2020, respectively.

The European Commission, South Korea, China and Japan are all working on 5G research efforts. In the U.S., Verizon, Sprint and AT&T have begun testing that will lay the groundwork for 5G, and Verizon announced that it plans to begin limited commercial deployments of 5G in 2017.

T-Mobile has said it will also start testing 5G this year. In Japan, NTT Docomo is experimenting with the use of mmW spectrum to achieve high transmission speeds, while in the U.K., the University of Surrey, along with multiple corporate partners, has opened a 5G Innovation Centre.

In China, the Academy of Telecommunications Research has launched a three-year program of 5G experimentation.

According to Cisco’s Visual Networking Index, mobile data traffic has increased 4,000-fold over the past ten years and nearly 400-million-fold over the past 15 years.

The additional spectrum space will increase speeds from the current average of 10 to 20 Megabits per second to 100 Mbps to 1 Gigabit, drastically boosting download speeds for streaming high definition 4K video and enabling new tech like VR.

TIA CEO Scott Belcher said: “The U.S. is in a stronger position to innovate and accelerate towards 5G. The FCC’s plan frees a significant amount of new spectrum for mobile use, and does so without attaching strings or taking a wait-and-see approach.”


5G technology is part of a 10 year service and network evolution from 4G to 5G. The development and deployment of 5G enables new services, new business models and new players—and will occur alongside further developments and investments in 4G /4.5G and Wi-Fi.

IoT to get a boost

The immediate result of the rapid deployment of 5G will be the growth in IoT networks for large enterprise. But there are challenges in the growth of IoT.

ABI Research says the market for non-cellular (non-3GPP) M2M Low Power Wide Area (LPWA) technologies, such as LoRa and SIGFOX, holds the potential for healthy growth. But with no set standard among proprietary vendors, growth will be conservative until vendors address the challenges to widespread adoption, which include opening up the vendor ecosystem and developing a feasible revenue model for public networks.

Addressing such challenges is critical for growth, as proprietary LPWA technologies face fierce competition from cellular LPWA standards such as NB-IoT, EC-GSM-IoT, and eMTC that have strong backing from an open and robust cellular vendor ecosystem. Non-3GPP LPWA technologies providers include Semtech Corporation, SIGFOX, Ingenu, Sensus, Microchip, Silicon Labs, and Kerlink.

“While network operators typically favor non-cellular LPWA technologies for their low deployment and maintenance costs, the lack of standards among proprietary vendors is a drawback to wider adoption of these technologies,” said Adarsh Krishnan, senior analyst at ABI Research.

5G will be a reality in the next 2-3 years in the U.S. Telecom operators and regulators in the Asia Pacific region will be waiting for some more time to finalize spectrum and investment.

Baburajan K and Vina Krishnan
[email protected]