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Six 5G trends worth noting in 2020

5G was the biggest communications buzzword of 2019. Every news outlet talked about it, major operators launched PoCs and even commercial services, and the possible use-cases being discussed and evaluated are endless. There is no question about it: 5G is expected to change the way we use technology. In what way, however, is not as clear. As we enter 2020 and the dust settles on the launch race, the real work of figuring out the business models and mass use cases begins. Let’s have a look at some major trends that will affect how the future of 5G pans out.

Trend 1: Governments and regulators are becoming involved

In this digital age, governments are starting to see networks as an economic infrastructure. A robust digital infrastructure is a basic public service akin to education or healthcare, and is a key enabler for a country’s economic health. But this fact alone does not explain the recent growth in government involvement in 5G. Governments and regulators are expanding their impact on how and by whom 5G is provided. We’re seeing government expanding its involvement in 5G in three categories:

  1. Spectrum allocation:
    Governments are actively freeing up spectrum in an attempt to make more spectrum available to 5G and spectrum auctions are being conducted worldwide. But what’s even more interesting, is that governments aren’t only targeting mobile operators; they are reserving slices of the 5G spectrum for industrial companies.
  2. Diversification of the players:
    One of the outcomes of reserving this spectrum for business is that they will be able to launch and run their own private mobile networks without involving telecom companies/operators. This has already happened in Germany, for example, where the government reserved a significant slice of the 5G spectrum for industrial giants, who eagerly jumped at the opportunity. This move shakes up the traditional cellular supply chain. It creates new opportunities for local system integrators, tower companies and more, as well as takes some power away from incumbent communications giants.
  3. Budget allocation:
    In previous generations, the flow of funds was mainly in one direction: governments allocated spectrum to mobile communications services, and filled its coffers through spectrum auctions. With 5G, that picture has changed. We are seeing significant funding allocated to subsidies for early 5G rollouts and to funding PoCs in a wide range of advanced technology use cases.

Why are governments doing this? To quote UK Digital Secretary Jeremy Wright: “5G is about more than mobile phone consumers having a fast and reliable connection anywhere in the country. It’s a vital piece of technology that can be used to improve the productivity and growth of our industrial sectors”.

5G, in combination with several other technologies that have reached a tipping point are a catalyst for innovation and the development of the technologies of tomorrow. AI, IoT, blockchain, and 5G are the cornerstones of industry 4.0, e-health, autonomous vehicles, and more. Government funding of 5G trials in these areas is designed to spur innovation and form a global “innovation race” of sorts. Economies with an early advantage may emerge with an economic advantage.

Trend 2: 5G will focus on enterprise, not consumers
When 4G came about, the huge spike in bandwidth changed the way consumers use the internet and consume media forever. As a direct result, the discussion around 5G use cases in early 2019 revolved around how 5G will affect consumers. While 5G may change consumers’ everyday lives eventually, the real value in 5G does not lie (only) in its increased bandwidth. The true revolution delivered by 5G is its open software nature – its easy deployability, flexibility, and reliability. No less important is the ability to manage it in a very targeted and tailored manner. 5G comes into its own in enterprise use cases such as private networks, robotics, AR, healthcare, industrial automation, automotive and more. In 2020, we can expect to see a lot more 5G activity in factory floors, enterprise private networks and the edge than in consumer services.

Trend 3: Cloud infrastructure players enter the stage
As the 5G market heats up and network and cloud infrastructure technologies grow closer, I expect to see more and more cloud players enter the 5G arena. This has already started to happen with Google, AWS, and Microsoft, who announced cloud edge partnerships with traditional operators, and with facebook, who took an independent approach with its Telecom Infra Project (TIP).

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As 5G enters the world of corporate IT, we’ll see more of these companies getting involved. For the time being, it is in partnership with internet providers, but who knows what the future may bring?

Trend 4: Shift in focus from developing new technologies to implementing them
2019 was the year that 5G came out of the labs and into the stark light of reality. For several years the industry has been focused on innovating and developing new technologies. In 2020, I expect innovative creativity to shift its focus to the implementation of not only 5G, but also AI, AR, and blockchain.
These technologies have matured more or less at the same time, and, put together, have the potential to create something new. With 5G out of the labs, the focus will shift to finding the ideal recipe that mixes these technologies just right to grow market share. As operators are shaken up by changes in the ecosystem and trying to solidify their position within their enterprise customers, they will seek new channels and new strategic directions to create new business.

Trend 5: On-Prem is changing
No matter how much people have talked about the marriage of wireless and wireline communications, they still remain separate within operators and enterprises alike. Until now, that is.
As 5G focuses on enterprises, it will need to integrate with other broadband connectivity solutions such as SD-WAN and Wi-Fi6. Couple that with the software nature of 5G and its easy (and extensive) configurability, and all of a sudden mobile networking becomes part of the IT domain. This change of ownership for wireless communications on the customer side, spells a much-needed change in how operators engage with them.

Trend 6: Disaggregation of the network
In 2020, we are going back to dealing with hundreds of different suppliers of network equipment vendors, with each one specializing in a very specific area. This trend of disaggregated supply chains started several years ago, and I expect to see it grow in 2020.
There are two levels of disaggregation:

  1. There are many vendors that sell communications and network equipment, but in the end, everything is acquired from a system integrator.
  2. Enterprise companies will source and implement the network on their own.

The trend towards disaggregation is the result of initiatives like Facebook’s Telecom Infra Project (TIP) and the O-RAN Alliance, as well as moves by governments as described above. In the end, supply chains or value chains now involve many small-scale providers, and power is shifting from the hands of giant equipment vendors and giant operators to the hands of enterprise customers and integrators.

5G has arrived, there is no question about it. However, we are still in its very early days, and the technology, use cases, and ecosystem are far from settled. One thing is clear – it will be interesting to see how 5G will disrupt both the industry and the telecom supply chain itself.

We at ASOCS are excited to be at the cutting edge of the 5G revolution, enabling new business models with our virtual RAN solution that fully supports the Open RAN initiative.

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