By 2034, 5G is expected to create US$13.2 trillion ($17.8 trillion) in global economic value. To capture a piece of that pie, 19% of telcos worldwide have deployed 5G standalone networks, according to GSMA Intelligence (GSMAi)’s Network Transformation Survey 2023.
Those networks are built on end-to-end 5G equipment and promise to address the limitations of a 4G core and deliver new capabilities, such as network slicing, ultra-low-latency communication, and massive machine-type communications.
“5G is at about 20% global penetration rate now and there are a lot of reasons for that. The device ecosystem has gotten itself in order, network expansion markets have been quite quick, there’s a lot of price competitiveness to help uptake, and many new [5G] applications are being developed,” says Tim Hatt, GSMAi’s head of research and consulting, at Mobile World Congress (MWC) Barcelona 2024.
He continues: “The challenge [for telcos when it comes to 5G] is not just about adding subscribers to the network but getting it to generate revenue growth. When we talk about monetising 5G, we refer to the ability to add premiums to existing tariffs or to offer new services that haven’t been sold before.”
Support enterprise IoT’s growth
5G-Advanced (or 5.5G) can help telcos make money from their investment in 5G infrastructure/ standalone networks. By bringing in new wireless technology innovations, 5G-Advanced strengthens the 5G foundation to offer faster speed, more coverage and better power efficiency, among others. This gives telcos opportunities to enable enhanced functionality and use cases for enterprises.
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For instance, 5G-Advanced enables telcos to offer enterprise customers low-cost Internet of Things (IoT). Tapping into the enterprise IoT market is key for telcos as GSMAi foresees enterprise IoT connections to reach 38.5 billion by the end of the decade, up from 10.7 billion today.
At the same MWC, Ritchie Peng, president of 5G and LTE TDD Product Line at Huawei, shares that 5G is driving the growth of IoT technologies, namely reduced capability (RedCap) and passive IoT.
RedCap can create billions of medium- and high-speed connections. Meanwhile, passive IoT combines cellular communications and passive tagging to enable long-distance coverage with low-cost terminals. It is expected to facilitate the connection of tens of billions of passive IoT devices.
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5G-Advanced will further support the development of these IoT technologies and the numerous connected devices in an organisation. This is exemplified in the case of China Unicom and Huawei helping China’s Exquisite Automotive Systems (EA) deploy a commercial 5G-Advanced flexible production line in Great Wall Motor’s (GWM) factory. EA is a subsidiary of GWM and is responsible for the development of intelligent equipment and the design and integration of automated production lines for GWM and other auto companies.
GWM previously relied on wired networks for serial connection and control of terminal equipment in its car roof production line. Wire abrasions in some of its equipment, such as robot arms and slide units, often result in production interruptions that cause an average of about 60 hours of downtime a year.
By switching to 5G-Advanced networks and equipment, GWM can better support flexible manufacturing and high-end core manufacturing processes that require high response speeds. 5G-Advanced networks also boosted the factory’s efficiency by integrating multiple functions, such as data collection and industrial control functions.
“Powered by 5G-Advanced, industrial applications are moving from auxiliary production to core production systems. We are seeing more typical 5G-Advanced applications appear in key scenarios, further driving the manufacturing industry to go digital,” says Fan Ji’an, China Unicom’s chief big data scientist.
He adds that his company is working with industry partners to build a 5G-powered industrial Internet that will help enterprises across sectors address pain points during their digital transformation journey.
Offer 5G multicast services
Telcos are also keen to provide multicast services, where data is transmitted from one source to many users or destinations simultaneously over a network. The same GSMAi report reveals that 67% of telcos cited 5G multicast services as their top use case for 5G-Advanced.
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The value of 5G-Advanced was demonstrated during the 2023 Asian Games in Hangzhou. China Telecom Zhejiang worked with ZTE Corp to deploy a reconfigurable intelligent surface into its 5G network. This enabled the Asian Games Village to achieve 10 Gbps network coverage even in former blind spots, such as underground garages and allowed the 5G-Advanced network to support multiple simultaneous 8K video live broadcasts and streaming.
Additionally, fans could watch badminton matches during the Asian Games in detail. The 5G-Advanced network was used to connect twenty 4K high-definition cameras around the badminton courts and a virtual reality camera next to the net to provide the referee’s perspective. Any moment of the match could therefore be frozen and played back in 360 degrees, allowing referees to make more accurate judgment calls and fans to see more details of the game.
Commercialise network APIs
Apart from selling connectivity services, telcos can expose their network capabilities via application programming interfaces (APIs) to generate revenue and maximise returns on their 5G network investments.
By exposing network APIs, telcos’ internal teams can build new services for end users while using them for network monitoring and management to improve operational efficiencies. The move also enables telcos to work with external developers to innovate. GSMAi notes that over the coming year, telcos will work more closely with cloud/technology providers to facilitate access to telco network capabilities, which could lead to monetisation opportunities.
To ensure telcos can benefit from network API exposure, GSMA launched an open-source framework called GSMA Open Gateway in February 2023. It ensures consistent, interoperable access to mobile networks through the standards-based CAMARA repository, a Linux Foundation project that aims to define, develop, and test APIs.
Currently, 47 mobile operator groups — representing 239 mobile networks and 65% of global connections — have committed to exposing their network APIs via CAMARA. This includes Telkomsel, Indosat Ooredoo Hutchison, XL Axiata, and Smartfren. These Indonesian telcos will be rolling out three API services to help local businesses accelerate the growth of digital services to end users by improving cybersecurity and customer experience.
The first is Number Verify, which streamlines mobile number verification for users to address issues like SMS delivery failures or user technology challenges. As for SIM Swap, it will detect recent changes in SIM cards associated with a phone number, which is crucial for preventing account takeovers, especially during financial transactions. Finally, Device Location enables organisations to confirm a device’s specific location.
This enhances fraud detection and accuracy for services like delivery apps while thwarting GPS manipulation and fraudulent activities.
Tap on autonomous networks
GSMAi predicts that by 2030, there will be 5.5 billion 5G connections and global mobile data traffic per connection will reach 47.9 GB. To capitalise on this opportunity, telcos need to improve the efficiency of their networks and find ways to support a huge number of connected devices cost-effectively.
Autonomous networks can help manage the complexity of the telco network while chipping away at rising operations and maintenance (O&M) costs. This is because they can self-configure, self-monitor, self-optimise, and self-heal.
As proposed by the global industry association TM Forum in 2019, there are six autonomous network levels of maturity. They are:
- Level 0 Manual management. The system only delivers assisted monitoring capabilities, so all dynamic tasks have to be executed manually.
- Level 1 Assisted management. The system executes a certain prefigured repetitive sub-task to increase efficiency.
- Level 2 Partial autonomous network. The system enables closed-loop O&M based on an artificial intelligence (AI) model for certain units in certain environments.
- Level 3 Conditional autonomous network. Building on L2 capabilities, the system can sense real-time environmental changes, and, in certain network domains, optimise and adjust its operation to the external environment to enable intent-based closed-loop management.
- Level 4 Highly autonomous network. Building on L3 capabilities, the system can operate in a more complicated cross-domain environment, conduct analysis and make decisions based on predictive or active closed-loop management of service and customer-experience-driven networks.
- Level 5 Fully autonomous network. The system possesses closed-loop automation capabilities across multiple services, multiple domains, and the entire life cycle. This is the goal for telco network evolution.
Currently, 84% of telcos are either at level 1 or level 2 autonomy, according to the Autonomous Telco Networks Survey by Capgemini Research Institute. Nearly two-thirds (61%) aspire to reach level 3 autonomy by 2028.
Yang Chaobin, Huawei’s board member and president of ICT Products and Solutions, believes telcos need to upgrade from level 3 to level 4 to accelerate value creation.
“[Level 4 autonomy] will reshape interaction models to change how O&M is performed, reshape the system capabilities that improve O&M efficiency, reshape the service processes that improve operations efficiency, and reshape integration models to shorten service time to market,” he states in his keynote at MWC Barcelona 2024.
Telco foundation models, he adds, are key to enabling the upgrade to level 4 autonomy. He exemplified this using the Huawei Telecom Foundation Model, which is built on the third generation of the company’s Pangu AI large training model.
He says: “[Our telco foundation model] offers two types of applications: Role-based copilots and scenario-based agents. It will help telcos empower employees and improve user satisfaction, which will, in turn, improve network productivity.”
For instance, China Mobile’s IP network O&M in Guangdong province has piloted Huawei’s Net Master offering which uses the telco foundation model. Net Master comes with both the copilot and agent functions to help field engineers and O&M engineers in the network operations centre work more efficiently. With Net Master, 90% of faults can be automatically diagnosed, and the fault locating time is shortened from hours to minutes.
While 5G seems to have mostly focused on consumers, 5G-Advanced revenue opportunities for telcos mainly lie in enterprise use cases.
“The 5G-Advanced value proposition has to be talked about less as a technology and more as a solution to a [business] problem. [By having a mindset change and positioning themselves as] IT consultants, telcos [will be better poised to] monetise new opportunities, especially as generative AI comes through,” concludes GSMAi’s Hatt.
