Ericsson just launched 5G commercial software for radio and core networks to enable operators to launch 5G from Q4. As part of the launch, Ericsson also announced evolving its Distributed Cloud offering. Can you please elaborate on that?
The new Distributed Cloud offering means that our solutions will go beyond NFV. The new Distributed Cloud offering also goes beyond Edge Computing. It combines the best capabilities of telecom and cloud for applications across multiple sites (central, distributed and edge), which are managed and orchestrated as one solution. As part of the Ericsson Distributed Cloud, we are introducing cloud infrastructure for edge computing. With fast deployable telecom-grade open software for remote upgrade and operation, Ericsson brings Software Defined Infrastructure (SDI) to the edge. To support efficient deployment of cloud native applications, we also expand the offering with support for containers in a distributed cloud infrastructure.
Can you please explain how will this benefit the mobile operators?
We have essential pieces in place which will enable operators who want to be early to turn on 5G. Operators can simply activate their 5G networks and take the first steps with commercial 5G capabilities and new applications leveraging advanced mobile broadband services. This will cater efficiently for growing data traffic and enable access to multimedia content, such as 4K/8K video streaming and VR/AR.
In addition, our customers have started their journeys towards Distributed Cloud. With NFV infrastructure, 5G core and network slicing, automated network operations (OSS), BSS, extended with edge cloud infrastructure, container cloud platform, and service enablement, our customers are preparing for 5G, capturing new revenues with new use cases and multi-sided business model.
Finally, with our installed radios from Ericsson Radio System that will support 5G NR, investments in ERS since 2015 will continue to bring operators value when the time is right to transition to 5G.
It will also simplify the investment decisions for our customers going forward as they will gain capacity benefits immediately and 5G capabilities in the future.
The combination of Ericsson’s new products and 5G support for radios already deployed in the field will give operators access to a very broad and flexible 5G portfolio. They will be able to move quickly into enhanced mobile broadband and address the new opportunities with industrial applications.
Which would be the main drivers that would push operators to adopt such new technologies?
Mobile data traffic is forecast to grow eight times through 2023, by which time 20% of the mobile data traffic will be carried by 5G networks. Continued strong consumer demand for mobile broadband services and uptake of traffic will mean that operators will have to deploy more capacity while maintaining profitability in the face of slowing revenue growth. The subsequent focus on efficiency and ROI will be helped with 5G gains in both performance and capacity.
With 5G NR, network slicing and distributed cloud, opportunities for addressing various industries open up revenue growth potential for operators. The potential revenue for operators addressing industry digitalisation with 5G, in 10 key industries, has an estimated value of $619 billion in 2026. We will see first operators launching their 5G commercial networks already this year.
What is the cost of 5G? Will it be cheaper/more expensive than 4G and if so why? What is the anticipated cost of rolling out 5G networks globally?
As with previous technologies, the production cost per bit is decreasing in the next generation. This is because 5G is more spectral efficient and can use wider carriers. Secondly, 5G will be more energy efficient because it has smarter scheduling techniques that switch on transmitting equipment only when needed. Thirdly, operational cost will be lower with 5G for comparable units today. This is because 5G is introduced with automation and analytics that reduce the need for human intervention in building, optimising, operating and troubleshooting networks.
If we look for example at enhanced mobile broadband, according to our new economic study, evolution to 5G will enable 10 times lower cost per gigabyte than current 4G. And we will guide our customers on how to achieve it.