Wanna play a game of 5G chicken?
The name "chicken" has its origins in a game in which two drivers drive towards each other on a collision course: one must swerve, or both may die in the crash. The driver who swerves will be called a "chicken".-- Wikipedia
5G Promises to Drive Another Bout of Telecom CAPEX, but Will It?
The demand for mobile data is spiraling as we all consume more and more services, especially video. Did you know that video now makes up more than 70% of the traffic traversing the network? This traffic explosion has put immense pressure on current networks. Perhaps this is one of the reasons that ~40% of services providers have already announced that they intend to roll out 5G networks.
In fact, 5G is held as a great opportunity for new revenues. For service providers, 5G holds the promise of new revenue streams from new services, more connected devices, and more traffic. And for telecom vendors, 5G means another investment cycle in infrastructure. After the last few years of relative drought, vendors are gearing up for ‘happy days’ again.
So you may rightly ask, what does the game chicken have to do with 5G? After all, everyone is on the same path, right? Well yes and no.
While 5G holds great potential, the jury is still out on the business case. In fact just today I read an article announcing that “IoT has no compelling need for 5G”. We all know that the ‘glory days’ of excessive spending are behind us, with ever decreasing flat rates and free wifi becoming increasingly more prevalent. In fact the growing competition will ensure that carriers continue to fight hard for every new acquisition and to reduce churn. So perhaps rolling out 5G countrywide is not the best strategy in the short term?
Bottom line? I believe carrier investment in 5G will be less excessive than telecom vendors hope. I also expect the fierce competition amongst telecom vendors to continue, meaning that pricing will be impacted. So I ask: who will ‘blink first’? The carriers or the vendors?
Uncertain ROI will drive carriers to more staggered spending in 5G
And rightly so, any other strategy would be suicide.
How then should carriers go about upgrading their networks to ensure continued success? ECI suggests a 3 step strategy:
- Quality of Service - Firstly, let’s agree that 5G is first and foremost about the services. Customers will pay more for better quality of services, if and when they are required. They will no doubt live just fine with ‘good enough’ in other areas as they are doing today.
But with more and more types of traffic, 5G networks operators will have to work harder to ensure that each type of service receives the quality of service it deserves (and its customers expect). That is why network slicing and quality monitoring are so important.
- Maximize Current Infrastructure – So money doesn’t grow on trees, and before you invest you obviously need to make sure that you are maximizing the utilization of your current infrastructure.
Managing a large, multi-vendor network is a funny thing, as the utilization rate is an ‘elusive character’. Turns out that gaining a clear understanding of your network’s utilization is extremely difficult, especially the traffic traveling between each node at specific times.
So how do you maximize something you’re not completely sure of? The simple answer is you can’t. You need to leverage tools which will not only help you understand your utilization rate, but will also help you plan your 5G implementation in a way that ensures you are investing where you need and not investing where you have extra capacity.
- Invest in Future-Proof Solutions – Yes, this is easier said than done, especially when you’ve become accustomed to vendors who come to you every few years with “oh, that is EoL (End of Life), we no longer support that.”
Solutions that are future-proof, have a clear evolution plan. It means that these solutions are both backwards (legacy) and forwards (SDN/NFV) compatible so that your services can easily traverse your multi-G (2G, 3G, LTE & LTE-A) network. If you don’t roll out 5G across your network on day one, you will need to ensure that these services will somehow flow seamlessly across your network generations.
ECI believes that the move to 5G should be staggered. This ensures you can assess and maximize ROI every step of the way. To learn more about ECI solutions for mobile backhaul, click here.