Aiming for 5G

Operators must think carefully about their 5G adoption strategies
5G, 5G deployment, BCG, Ericsson, Huawei, IDC, Middle East, Nokia Networks, Ovum, Telecoms

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The experts

Paul Black, director of telecoms and media, IDC Middle East, Turkey & Africa

Matthew Reed, practice leader, Middle East and Africa, Ovum

Pan En, vice president of solution sales and marketing, Huawei Middle East

Christian Bartosch, principal at Boston Consulting Group Middle East

Tarek Saadi, vice president and head of sales, Ericsson, Region Middle East

Noel Kirkaldy, head of vertical solutions business development, Middle East and Africa, Nokia Networks

CommsMEA: How should operators plan their network investments to embrace 5G?

Bartosch: In order to truly embrace 5G, operators need to significantly invest in massive RAN densification, in addition to beginning to deploy HetNet structures based on C-RAN and fibre based SDN. The industry outlook suggests that capital intensity will reach around 14% and stay at this level for several years, which highlights the importance of making these investments early if operators are to truly make waves in 5G.

Black: The ROI of 5G will depend on the business model and go-to-market strategy, not on the technology. It is necessary for telcos to explore new monetisation models, as the current business model of users paying telcos to provide connectivity and data must be changed. Whether this is done by networking slicing, allocating premium bandwidth, traffic prioritisation, consumption models, or machine models, now is the right time to start forming a strategy, while keeping prices attractive to end users. The investment may also require technology vendors, businesses and OTT to participate in funding 5G deployment, for example like shared infrastructure model.

Kirkaldy: Operators in the MEA region should continue to monetise and invest in mobile broadband services. In some parts of the region, we are already seeing the migration from 3G to LTE and to LTE-Advanced that will be the base for the eventual 5G deployments. The data traffic is increasing exponentially in many parts of MEA, and operators should accordingly start investing in the migration toward LTE-A and ultra-dense deployments including small cells.

Pan En: With the quick devolvement of Internet of Things (IoT) applications and more of the world’s population coming into the smart city era, mobile broadband will permeate all areas of the society. It is estimated that by 2020, 6.5 billion people worldwide will use mobile networks for data communications and that 100 billion additional ‘things’—such as vehicles, home appliances, and building sensors—will be connected via mobile networks. Operators will need a blueprint for this networked world.

Today’s vision for 5G technology will provide a platform for that connected world enabling new methods for innovation and collaboration while creating new business opportunities for operators. Along this journey, it will be important for operators to adopt an evolutionary business strategy that protects and maximises the potential of 4G investments and also cultivates market demand for 5G. Accelerating the standardisation of 5G, providing and verifying key technologies, exploring new industry value chains, and carefully planning commercial launches will all prove fundamental in order to embrace this future.

Saadi: Telecom operators are going through a major digital transformation; one that is reshaping virtually all sectors of the economy. With the advent of 5G, the speed and breadth of that transformation will only increase. 5G encompasses innovative network design in an evolutionary, rather than revolutionary, move that will efficiently support applications with widely-varying operational parameters.

While lower frequencies will remain the backbone for mobile-communication networks in the 5G era, providing ubiquitous wide-area connectivity, to further extend traffic capacity and to enable the transmission bandwidths needed to support very high data rates, 5G will extend the range of frequencies used for mobile communication, including spectrum in higher frequency bands above 10GHz. Such higher frequencies will serve as a complement, providing additional system capacity and very wide transmission bandwidths for extreme data rates in dense deployments.

Other key technology components of 5G wireless access include advanced multi-antenna transmission, lean design, user/control separation, flexible spectrum usage, complementary device-to-device communication, and backhaul/access integration. These capabilities will include the possibility to provide very high data rates everywhere, support for very low latency and ultra-high reliability, and the possibility of devices of very low cost and very low energy consumption.

LTE will continue to develop in a backwards-compatible way and will be an important part of the 5G wireless-access solution for frequency bands below 6GHz. In parallel, new radio-access technology will emerge, at least initially targeting new spectrum.

In contrast to earlier generations, 5G wireless access should not be seen as a specific radio-access technology. Rather, it is the overall wireless-access solution addressing the demands and requirements of mobile communication beyond 2020.

5G networks will be highly efficient and faster, while supporting more users, more devices, more services and new use cases – yet without impacting costs or the carbon footprint.

CommsMEA: How is the region doing when investing in 5G testing?

Kirkaldy: There is still a large proportion of subscribers in the region using voice and text based 2G technology that will take time to migrate to 3G and LTE technology. As we saw with the initial LTE deployments we can expect that the leading regional operators will make investments in 5G deployments in key strategic locations before larger scale deployments.

Reed: Several Middle East operators have linked up with vendors to test and develop 5G in the region, such as Etisalat with Huawei and Ericsson; Ooredoo with Ericsson; Du with Nokia Networks.

Pan En: Already 5G technology is expected to become critical infrastructure in a super-connected world, supporting 1,000-fold gains in network capacity and providing the necessary backbone for future Smart City projects in the Middle East. While the standardisation of 5G will begin in 2016, 5G technology has been a hot industry topic for quite some time.

Within the Middle East, there is already significant movement on the 5G front. Over the last year Huawei has partnered with leading operators to jointly showcase the future of 5G services to the public. We have also signed a memorandum of understanding to explore super-speed 5G services with one of the region’s leading telecommunication operators.

Saadi: 5G is an evolution rather than a revolution. It will enable the ‘Networked Society’ to be realised to its full potential.

Regionally, there has been a lot of activity in terms of 5G testing with regional operators collaborating with Ericsson to develop a joint understanding of 5G use cases, requirements and deployment scenarios.

Furthermore, operators in the region are partnering with international bodies such as the International Telecommunications Union to contribute to 5G study groups.

The aim is for 5G networks to be highly efficient, faster, support more users, more devices, more services, and new use cases without a corresponding impact on cost or carbon footprint. These are the requirements of this new generation of mobile communication.

CommsMEA: Analysts said that 3GPP specifications will be ready in 2018. What is your opinion?

Pan En: The major challenge with 5G today is determining how to achieve the vision of 10Gbps throughput, 1ms latency and capacity for 100 billion device connections. With extensive experience in 2G, 3G and 4G solutions and now with ambitious 5G research underway, we believe that the timetable set by 3GPP is a realistic one and that the market will be ready for commercial 5G deployment by 2020. Obviously this is still a work in progress as 3GPP will start working on 5G from March 2016 and will continue over the next 4-5 years.

Reed: The first 3GPP standard with some 5G features will be 3GPP Release 15 (R15), which is scheduled to be finalised in the third quarter of 2018. But R15 will only deal with a subset of 5G. If R15 is finalised on time in 3Q18, the first commercial launches based on it can be expected in 2020. The first full 5G standard will be 3GPP R16, which is scheduled to be finalised in December 2019, allowing commercial services to be launched from December 2020.

Bartosch: People should not assume that 3GPP specifications by 2018 means that there will be full 5G functionality in a single drop in 2018. Instead, we should expect there to be a sequence of several drops over the next few years which will slowly enable this technology to come to fruition.

Kirkaldy: We expect to see initial pre-standard trial 5G deployments for fixed wireless access in 2017 and then still pre-standard trial 5G deployments for mobile access in 2018, before we will see 3GPP standardised commercial deployments in 2020.

The race on the road to 5G is definitely on and we are collaborating, not only with entities within our own industry, but other organisations across the world to bring 5G technologies to the forefront in the near future.

5G networks, based on standards that will meet ITU IMT-2020 requirements, are expected to be deployed commercially in 2020. Pre-standard, pre-commercial networks are expected to be launched earlier in selected markets.

Our latest Mobility Report predicts that there will be 150 million 5G subscriptions globally by 2021. The same report also predicted the uptake of these technologies to be much faster than 4G.

CommsMEA: Which countries are leading the route towards 5G?

Bartosch: In the region, Qatar and UAE are ahead, partially because these markets are still very profitable and allow operators to invest into technology innovation.

Black: One of the leading countries in GCC is UAE. IDC sees increasing investments on high-speed broadband and coverage infrastructure, to accommodate the rise of media consumption and IoT use cases. For example, Etisalat and du claimed to have achieved wireless 5G radio ultra-high-speed communication of up to 10Gbps. This was an important milestone in high-speed broadband connectivity that highlighted the operators’ investments in utilising best-of-breed network and infrastructure to enhance QoS and customer experience.

Pan En: In my opinion, the technology’s development is being driven by a combination of bodies working across many different geographies.

The Middle East has played a prominent role in supporting 5G to date. Mobile penetration rates are already quite high. Many countries particularly in the Gulf have already invested in scalable 4G LTE infrastructure. Operators’ commitments to trialing 5G applications are also proving to be a testbed for other countries in the region and around the globe.

Looking further abroad in Europe for example, there are a number of major research projects led by the pan-European 5G Public Private Partnership (5G-PPP), which comprises Huawei as well as many other leaders in the telecoms sector. In China there is the Chinese government-led IMT-2020 (5G) Promotion Group, a network of Chinese research institutes and telecoms providers established in 2013 to facilitate international discussion on 5G. In Japan, we saw in 2015 the world’s first successful large-scale field trial of 5G new radio access technologies.

All these efforts are encouraging as the industry works towards commercial 5G by 2020.

Saadi: Globally, South Korea, Japan, China and the US are expected to have the fastest uptake of 5G subscriptions according to our Mobility Report.

The telecom sector, across the region, is extremely diversified in terms of ICT maturity levels. So we can look at 3 different levels, the advanced, optimizers and emerging markets. In the advanced market, such as the GCC market, LTE adoption has accelerated, LTE subscriptions are on the rise and are expected to triple by end of this year alone, and surpass 210 million by 2020, equating to around 20 percent of all mobile subscriptions.

Reed: Operators that have announced 5G trials include NTT DoCoMo, Verizon and SK Telecom. Some operators have said they plan to launch 5G before 2020, but while such services might be marketed as 5G they will in fact be 5G trials or 4G services described as 5G.

Kirkaldy: As there are major events in the UAE with Dubai Expo in 2020 and in Qatar with the FIFA World Cup in 2022, we are already seeing commitments being made for 5G deployments and readiness to support these events.

CommsMEA: Which enterprise sectors in the region will be the first ones using 5G?

Black: Users of 5G services will include retailers, transportation providers, and smart city committees; consequently, telcos should slice the network into various public/private service providers. This will allow a new level of network agility that can be used to configure on-demand network slices, delivered with the required QoS and customer experience of the use case or service. For example, in the coming years, transportation sector will see 5G application in autonomous cars that will be expected to drive in Sheikh Zayed Road, Dubai. These cars will require a massive amount of data to operate with an ultra-low latency network.

Bartosch: 5G will see significant adoption with companies playing in the IoT/M2M space such as logistics and transport, health care, media. In addition, governments will be likely to use the PMR type features for public safety and infrastructure management.

This is something we have already seen in markets such as the US with the FirstNet project, so we expect these industries to emulate that in this region.

5G in the Middle East

The Middle East appears to be relatively well-placed in terms of 5G deployment and “sits in the middle of investments in 5G” when compared to the rest of the world, according to Christian Bartosch, principal at Boston Consulting Group Middle East.

“Globally, the Middle East sits in the middle of investment in 5G. The region is behind Asia which is the market leader in network investment into 5G, as well as behind the US and several European markets,” he said. “However, we are also ahead of markets in Eastern Europe, South America and South East Asia.”

However, he added that companies in the region may need to make “more serious investments” in 5G in order to “prove itself as a leader in communications against competition from other markets”.

Benefits to industry

Many industries will reap huge benefits from 5G, according to the region’s telecoms vendors. Huawei’s Pan En said that increasing use of broadband applications for learning and working will “reinvent the concept” of schools and offices, while web-based commercial transactions will surpass traditional methods. “All industries have the potential to benefit from this transformation. We have already seen numerous entities within sectors such as energy, government, transportation, education, hospitality, and healthcare leverage mobile broadband to create new value chains and business models. 5G will open up more of those opportunities and start to connect these industry ecosystems in ways that we have never seen before,” he said.

Nokia Network’s Noel Kirkaldy added that existing LTE deployments in the region for mission-critical services help to give some idea of the potential benefits of 5G. “There are many other enterprise sectors such as health care, transportation and other utilities that require business critical solutions. All these lead toward the development of smart cities that we expect to embrace the full benefits of the 5G technology to become full-fledged smart cities,” he said.

The expert

Paul Black, director of telecoms and media, IDC Middle East, Turkey & Africa

Matthew Reed, practice leader, Middle East and Africa, Ovum

Pan En, vice president of solution sales and marketing, Huawei Middle East

Christian Bartosch, principal at Boston Consulting Group Middle East

Tarek Saadi, vice president and head of sales, Ericsson, Region Middle East

Noel Kirkaldy, head of vertical solutions business development, Middle East and Africa, Nokia Networks

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