Industry verticals can see the benefit of 5G — but trust is still an issue

logo_en

Last week in Brussels, Real Wireless helped deliver the second and final workshop of the “5G Socioeconomic” study for the European Commission.

The event saw attendees from four vertical sectors — automotive, healthcare, transport and utilities — each with their own needs and priorities for 5G. For example, automotive and transport were looking to reduce accidents and traffic congestion, utilities to reduce energy costs and healthcare needed to improve access and care provision.

During the workshop, participants were tasked with validating 5G for their own sector. They needed to identify the top three 5G capabilities from a list of nine which are part of the capabilities developed by the Next Generation Mobile Networks Alliance (NGMN) for their own industry. For each, participants captured the economic value, social value and other values — in each case identifying if the value was high, medium or low. Prioritising the capabilities helped those involved realise which were of most value to each sector.

Participants were also tasked with discussing the value of 5G in four key environments; smart homes, smart workplaces, smart cities and non-urban environments. Participants identified the economic, social, environmental and other impacts and value in each environment and subsequently mapped the results to each of the 5G capabilities.

The results — scalability is key
Understandably, the capabilities and requirements varied between sectors. So where healthcare saw the need for a “dynamic increase of network capacity on the fly”, those in utilities did not see that as a key capability.

However, almost all vertical sectors had at least one common capability requirement, such as the ability to deliver a scalable Internet of Things or sensor solution.

The ‘trust and control’ barrier
Before 5G can become a real success, however, concerns were raised around trust. With 5G, industries and businesses will be running their “virtualised” networks over third-party infrastructure. So, many were understandably concerned by the lack of control they would have over that network. Who would be liable for any costs incurred by network outages? And how would operators address concerns around security?

To address these trust issues, verticals argue that network operators will have to relinquish control of their 5G network slice or solution. If we get to a stage where there is harmonised spectrum and stable, reasonable, coherent regulation and policies, industries will buy into 5G, manufacturers will want to produce hardware, there will be economies of scale and no need for more physical networks (verticals that need a network can become MVNOs over 5G).

These findings clearly highlight that industries are willing to embrace 5G, but there are still certain aspects that need careful consideration before each widely adopts it. Based on this feedback, the project team will later write up into its second workshop report. Watch this space…

Are UK mobile phone users paying too little?

17470913285_bbda8cf99a_kDuring the launch of its new iD MVNO service, Dixons Carphone suggested that UK customers overall overpay on their mobile bills by more than £5bn each year. If you look at Ofcom’s figures, which state that the UK has around than 83.1m mobile subscriptions, then you can assume that this £5bn figure equates to an additional £60 per year for each person who owns a phone.

While that news will undoubtedly raise the collective eyebrows of mobile phone users, we would argument that if users paid more, the mobile industry would be able to offer substantially more benefits in return.

Users will undoubtedly object to paying more for what they already consider to be pricy smartphone contracts. But when considering the fact that UK mobile operators receive four times less average revenue per user than Japan, two and half times less than the US and one and a third less than the rest of Western Europe, maybe UK users are still paying less than they really should?

The lower average revenue per person generated by UK consumers translates almost directly into a lower spend on networks by mobile operators in the UK compared with other countries. A 2013 report in to Europe’s telecoms infrastructure found a 34% difference in investment per head between Europe (£111,000) and the US (£167,000). What’s more, the report found that European investment is declining at a rate of 4% per annum. The lower spend shouldn’t be surprising — the money to invest has to come from somewhere, after all.

Without the money to invest, operators cannot roll out their networks to deliver the coverage and capacity we need. Since poor coverage costs UK businesses over £30m a week as employees waste time hunting for mobile phone reception, the need to eradicate black spots has never been more pressing.

Without the money to invest, mobile operators are cutting costs by sharing networks, resulting in little differentiation between competing operators — something that could reduce competition out of the market in the long term. We used to have unrivalled levels of competition with five operators, but that number is soon likely to reduce to three.

The challenge for mobile operators is to persuade customers to use their voice and data services more to generate additional revenue for investment. The benefit to users of mobile is around 8–10 times that to the operators — a great investment in anyone’s money.

MNOs need a change of culture rather than technology

3235380837_933c1c96dc_bOf the many issues that operators are currently seeking to address, one of the main ones they face is resolving problems relating to capacity — but some might argue the solution to this already exists, hiding in plain sight.

Offloading some of the mobile traffic to Wi-Fi networks has been a key strategy of some mobile operators in recent years. Wi-Fi accounted for an enormous 75%–90% of all mobile data consumed in leading LTE markets. The reasons for this are threefold. First, it’s frequently made available free at the point of use for users; secondly, support for the technology is included as standard in almost every mobile device on the market today; and thirdly the operators do not have to pay for the unlicensed spectrum used by Wi-Fi.

Although some operators deploy their own dedicated Wi-Fi networks, they are still not comfortable with sending voice over Wi-Fi. Carrier-grade Wi-Fi has been something the industry has discussed at great length, but as of yet has failed to turn into a reality on a large scale. This is because the best-effort Wi-Fi networks are not controlled from the carrier’s core network and the Wi-Fi access points (APs) often do not support any form of traffic management or prioritisation. As a result, the operators are unable to monitor or address performance issues such as congestion, as it would in the wireless or wireline access network. This means the provider cannot guarantee QoS (quality of service) and control things such as speed, latency, connectivity and prioritisation.

Despite what operators might believe about mobile users, they’re in fact quite used to the fact that when something is free it’s often not as good as the paid alternative. This is the same with Wi-Fi and mobile networks, and they need to adjust their thinking to suit this.

For example, I am a heavy Skype user and, especially when I travel to Africa, I always make sure I find a hotel that offers Wi-Fi. Sometimes there is a severe delay, and I have to live with frequent call drops — but this is a free service, I’m hardly going to complain about it.

Millions of other Skype users may also experience the same issues when using the service on free Wi-Fi networks, but again also accept that they get what they pay for and love the experience all the same.

Perhaps operators need to therefore acknowledge and accept this fact: users are happy to accept a lower QoS when using free Wi-Fi.

Now, I’m not advocating operators suddenly shift their entire business model to focus on freely available Wi-Fi networks. The industry knows all too well that when you augment a technology to do something it was not designed to do, it can become incredibly inefficient in the long term. This is why LTE networks were designed from the ground up to be fit for purpose.

Instead, operators could educate their users regarding the implications of using VoWi-Fi. Choice is crucial — let the user choose between quality, price and convenience. They will be much happier with the outcome and this gives operators more room to focus on improving the QoS of their own networks, as well as tackling capacity issues.

Operators could think outside of the box and take hold of this opportunity, rather than continuing to struggle until new technology appears to fix their issues. Otherwise they risk losing out to a new breed of MVNO, like Google.

Users are (somewhat) intelligent and, although their expectations are rising, they are already familiar with the limitations of technology like free Wi-Fi.

Nobody would use Skype in their hotel room if this wasn’t the case.