The incremental move from the current generation of wireless networks to the prosaically named ‘fifth generation’ (5G) has continued unabated throughout 2019.
As a matter of fact, in some places — notably right here in certain areas of the US, as well as China and the EU — it's already started coming online; primarily in the form of small-scale trials restricted to specific geographical areas.
Promising myriad benefits that include superior connection speeds, enhanced reach, network slicing, big data, greater energy efficiency, a long-term reduction in maintenance costs, and the introduction of numerous cutting-edge technologies, 5G represents a marked improvement over its predecessor.
From a commercial perspective, transitioning from 4G to 5G is easier said than done. Extracting maximum value from 5G infrastructure will also prove challenging in the early days, necessitating a greater demand for reliable telecom expense management (TEM) services than ever before.
Benefits of 5G
We'll start by looking at the three most hyped 5G benefits. These are certainly considerations for those who wish to become early adopters of the new technology.
1. Increased Service Quality
First and foremost, 5G is set to drastically improve network speeds and stability, while lowering latency.
Core networks have been gradually evolving from circuit and packet switching toward more converged structures (IP Multimedia Subsystems, for instance). Supported by Network Functional Visualization and Software Defined Networking, this has enabled network providers to increase capacity at lower unit cost, reducing overarching operating and capital expenses, without sacrificing the configurability or agility of their services. In layman’s terms, this means we’re closer than ever before to instant connectivity.
Increased speeds allow enterprises to deliver core services in a fraction of the time than is currently possible, improving customer satisfaction and, consequently, the cost-effectiveness of their service or product offering. Reduced latency will feed into this, uncovering new levels of network responsiveness that ensures data transfer is more reliable.
Online retailers stand to gain the most from this change. A faster, more responsive shopping experience makes it easier for customer to spend their hard-earned money on ta given site, generating additional profits that can then be reinvested into the organization’s telecom infrastructure.
Similarly, SaaS vendors will be able to respond to customer enquiries in a fraction of the time, thanks to the superior bandwidth offered by 5G networks. They’ll even be able to take more advanced approaches to troubleshooting, such as real-time video calling.
Taken altogether, these advances have the potential to enable organizations to deliver superior customer experiences to their clients.
2. Connection Density
Lightning fast networks and global reach are all well and good, but if supply fails to meet demand, our precious smartphones become nothing more than expensive paperweights.
Even in the 4G era, it’s not uncommon to see mobile networks struggle with the complexities of the connected world. Try sending a text message on New Year’s Eve or making a quick phone call while watching your home team play in a packed stadium.
Fortunately, connection density, i.e. the maximum number of connected devices a mobile network can support simultaneously, will be up to a hundred times better in 5G wireless networks. What’s more, this won’t come at the expense of speed or latency — even in heavily populated areas.
As far as business owners are concerned, this will improve end user experience and employee productivity. It will make it easier to identify and eliminate waste from their telecom budget, including the additional infrastructure and services that, in the pre-5G era, would be required to address analogous capacity issues.
An increase in connection density also has implications for the internet of things (IoT). From driverless cars that (theoretically) make our roads safer, to robotic surgeons that support our overstretched healthcare systems by performing potentially lifesaving operations, the number of connected devices is set to increase dramatically with the arrival of 5G.
For many organizations, managing this influx of newly connected devices may pose additional challenges that will necessitate better TEM services. More circuits means more complexity.
3. New Business Insights
Gartner estimates that, by 2020, there will be over 20 billion devices installed worldwide that fall under the umbrella of the ‘Internet of Things’ (IoT).
The sheer quantity (not to mention the superior quality) of the data collected, processed, and transferred via this unimaginably vast network will give enterprises even deeper insights into their telecom estate.
Identifying the resources and services that are contributing genuine value to an organization’s wider strategic goals will be noticeably simpler. It will also expedite the process of identifying overcharges, billing errors, and anything else that costs money to set right.
Organizations can also expect to receive a more personalized service from the carriers themselves. Who, by leveraging the same insights, will have access to the data they need to deliver more contextual services to their client base: placing a greater emphasis on connection density in busy urban areas, for instance, or focusing on installing fixed-wireless infrastructure in remote, rural areas.
The Realities of Implementation
At its core, telecom expense management is all about streamlining costs within an organization’s telecom budget.
That’s why we’ve emphasized the long-term implications of 5G. These range from direct benefits facilitated by a faster, more responsive network and expanded coverage, to more indirect benefits.
However, anyone thinking of transitioning to 5G infrastructure during the early stages should be aware that the initial outlay will be considerable.
1. The Cost of Switching
Before they can enjoy the benefits of improved connection speeds, network stability, and connection density, consumers will have to make the switch from 4G to 5G.
This might not be much of a problem for individuals, but for organizations whose estate is comprised of a vast fleet of mobile devices, the cost of making this change will be significant.
Although price points for 5G plans haven't been finalized at time of writing, some carriers have started to give us a reasonable indication of what to expect in terms of contract rates. For instance, Verizon's 5G service plan costs $10 more than its unlimited 4G equivalent. As uSwitch points out, this isn't entirely unexpected, given that average monthly network charges experienced a sudden and noticeable increase as 4G began to replace the previous generation of mobile networks.
The best TEM vendors are adept at helping their clients find the best deals and minimize the impact line rentals. In a world where everything costs more as standard, knowing how to navigate the options and strike the best deals will be more important than ever.
2. Infrastructure
Changing contract rates aren't the only consideration. Before it becomes mainstream, operators will need to invest substantial sums of money in basic infrastructure — even if they adopt an iterative approach that builds on existing 4G network infrastructure (enhancing current LTE features, for example) to minimize the short-term expenses.
Nevertheless, the arrival of new infrastructure is inevitable. Fiber optic broadband is already upon us. While, in the not too distant future, we can expect to see ‘small cell’ transmitters replacing the larger towers that support 4G networks — to cope with new demands on capacity and overcome propagation limitations inherent in the high-frequency spectrum.
This is a rather pressing issue, given that McKinsey estimates the US will begin to experience capacity issues at approximately 50% of sites by 2020.
Carriers will also have to set aside money in order to tackle any teething problems that occur during the switchover from 4G to 5G — expenses that will, via a noticeable increase in network rates, be passed onto the consumers who rely on their services.
Those who assume that 5G will herald an immediate tenfold increase in profits and cost-cutting measures should temper their enthusiasm accordingly.
At the user level, staff and customers need to have devices that are able to make use of 5G. Widespread adoption of 5G-ready devices is in its infancy, with the price of such devices still very high. Adopting 5G today is will be like having built a website in 1989 – sure you got there first, but who's there to buy from you?
Get Ready to Be 5G Ready
Despite the advantages promised by next gen networks, those whose operational requirements fall well within the capabilities of 4G would be well advised to hold off on any large-scale transitions for the time being — waiting until such times as the basic infrastructure is firmly in place and the benefits to be gained from 5G are readily available.
5G is a hot topic right now, but that shouldn't make it a call to arms to abandon current long-term IT projects in favor of new technology.
According to latest estimates by Ericsson, 5G technology won’t really take off until 2021/2022. Ericsson puts global 5G smartphone subscriptions at 12 million currently and at 84 million by the end of the year. That's faster than general cloud historical adoption, but even by 2025, it's unlikely that 5G will exceed 80% adoption worldwide.
Just like the cloud, getting your enterprise to full 5G capacity is a journey. This technology has huge potential, but we won't see its benefits for a while just yet. Today, enterprises should continue delivering he best possible service with today's technology.
Topics: TEM
