Tying 5G benefits to the service provider business strategy

1 min. read


Previous developments in mobile technologies have proved again and again that the time to turn new services into a profitable business for Service Providers have been greatly reduced. A successful 5G transition will provide similar opportunities. With 5G standardization in view on the horizon, Service Providers are already running 5G trials to develop the technology, trying to understand what it could mean to their business.

An important driver for Service Providers is to be positioned as a pioneer by being the first to go to market with a new 5G related service with proven financial benefits. This is why we’re seeing so many deployments across many verticals as 5G could potentially transform the way businesses work in nearly every sector.

Obviously, 5G brings about an unprecedented increase in performance, which enables many businesses to offer innovative and faster services. Turning this into a profitable business, however, turns out to be more difficult as there are not yet ant proven commercial deployments of a 5G-driven profitable business. However, delaying investments is considered equal to losing the early competitive advantage that will make it hard to catch up with again.

Exploring the Service Provider business case for 5G

Understanding what 5G can do for your business starts with performing an analysis of the potential ways that it can deliver new services. Increased speed, the growing number of connected devices and (extreme) low latency introduce the challenge to craft and develop new business cases. 5G’s network slicing is probably the biggest opportunity to model profitable business cases in key verticals for Service Providers.

The process of developing such a business case for Service Providers will be completely new. Many third-party analysts have considered the value of new services enabled by 5G technology for the entire ecosystem, including end-users in many different industries. Think about innovative services while at home, on the move and at work. The potential is huge.

Ultrabroadband through fixed wireless access

One of the first business cases that we could see is fixed wireless access to bring ultra-broadband to buildings that are usually hard to reach with fibre. 5G-to-the-home has the potential to open up the home broadband market to new entrants and deliver attractive returns in a relatively short time. In other business cases aimed at consumers, 5G will deliver exciting ‘infotainment’ services to passengers on public transport. It enables spectators to experience the action during sporting and entertainment events in new ways for example. Both cases offer a strong return on investment (ROI) for Service Providers and other involved parties.

In the enterprise market, 5G has the potential to be the real enabler for self-driving cars, to reduce road transport costs and traffic congestion through ‘truck platooning’. Furthermore, 5G can replace the fixed infrastructure for automated factories as it can deliver the demanding performance requirements in this industry. The flexibility of 5G can introduce more dynamic manufacturing systems which will contribute to their business cases.
Connected Health Care has a strong business case focus with 5G as it will introduce new capabilities that will help to reduce the pressure on current healthcare systems.

These are just a few of the early business cases that the industry is exploring for 5G. The Service Provider industry recognizes that this new development is not just about the technology nor is it about simply providing exciting new services. A Service Provider’s success will heavily depend on making investments at different stages that will result in a positive financial return and that will create completely new business opportunities.

Economic benefits are expected to follow directly when 5G is implemented and adopted as the underlying technologies will be rapidly developed. Standardization of 5G is not officially finalized yet but the industry has agreed on the key enabling technologies, architecture and deployment scenarios. This is an important enabler for infrastructure manufacturers and Service Providers to test different technologies within 5G networks to ratify the delivery of new expected services.

Tying 5G benefits to the service provider business strategy

It is obvious that the ‘early adopting’ Service Providers are beginning to plan for the 5G future, making decisions about how they will deploy and use the technology. And more importantly: how to lead in what are likely to be intensely competitive sectors and rapidly moving markets. Planning begins with the business cases that a Service Provider targets as part of its business strategy. This is a difficult task because there are no commercial deployments of 5G yet. The business information they need to recognize the trends, identify the opportunities and understand what 5G can do for their business is simply absent. Service Providers cannot afford to gamble in the upcoming 5G era. It must be very clear how business cases lead to additional revenues that can be secured with 5G; what investments will be required and how much time is needed for business cases to become truly profitable.

5G business deployment categories

The Service Provider industry researches the primary benefits and how to bring them to their customers. There are mainly 3 5G business deployment categories:

  1. 5G interactive experience: How 5G will create experiences for consumers at home and on public and private transportation systems.
  2. 5G live experience: How 5G will provide new live experiences to people attending large (digital) events, meeting very high demand at traffic hot spots.
  3. 5G industry experience: How 5G can become the standard of the fourth industrial revolution.

1. 5G interactive experience

5G presents an opportunity for Service Providers to offer broadband access to homes in areas where conventional fibre-to-the-home (FTTH) is difficult or expensive to deploy. Avoiding the need for time-consuming and high-cost civil works to lay fibre, 5G delivers faster time to market and opens up the home broadband market by enabling new entrants to compete against fixed-line CSPs. Think of new technologies like mmWave. This allows each single base station to serve dozens of households.
The business modelling here is based on an addressable market in the rural areas that often lack the high (mobile) broadband speed that is being offered in non-rural areas. The business case however depends on the number of households being served, the Capital Expenditure per site and what the revenue per household will be.

Without a doubt, 5G will enable Service Providers to create revenue by delivering entertainment services to subscribers ‘on the go’, especially to those travelling in urban areas. Services that a Service Provider may well be offering are e.g. high-quality dual-screen video streaming, augmented and virtual reality applications, online gaming and video calling or conferencing. A prerequisite for the best user experience is of course the network, which should be able to deliver services consistently across the area. Below is an example of a 5G interactive experience, in which the user selects which artists to watch simultaneously, thanks to 5G.

Additionally, it should deliver high quality and reliable performance simultaneously to many users that are on public transport, often travelling at a relatively high speed. High bandwidth services could also be provided to users who do not have a 5G device. This can be done by delivering the 5G signal to a vehicle and then distributing the bandwidth via Wi-Fi, for example, while on a train or in the subway. Such examples offer Service Providers a chance to implement early 5G deployments, winning new revenue ahead of the widespread expected availability and introduction of 5G devices.

2. 5G Live experience

5G promises to significantly boost the speed, coverage and responsiveness of wireless networks. It can run between 10 and 100 times faster than your typical cellular connection today, and even quicker than anything you can get with a physical fibre-optic cable going into your house. It will also boost how fast a device will connect to the network with speeds as quick as a millisecond to start your download or upload.

High capacity and low latency of 5G is very well-suited to deliver services that provide live 8K Ultra HD views of e.g. sports games during a major event, all simultaneously to thousands of spectators.

With such HotSpot services, visitors experience being at the heart of the action, for example with live streaming virtual reality. HTC recently showcased their 5G hotspot and smart hub for example, which will let up to 20 people access ultra-fast connectivity and live Virtual Reality at the same time. Below is an example of HTC Vive's wireless live 5G supported CloudVR entertainment system.

In such scenarios, users could be able to select from multiple 360-cameras to see what’s happening from any angle they want, in real-time, and clicking to see instant replays on-demand, or even enhancing their experience with real-time insights provided through Augmented Reality.

5G is able to support extremely low latency, improving the user experience and avoiding motion sickness when using Virtual Reality.

3. 5G Industry experience: Industry 4.0

For industrial usage, 5G seems to open a new era which is currently called ‘Industry 4.0’. One of the most important enablers of the ‘smart factory’ of the future will be vastly increased connectivity that will link machines, processes, robots and people together, creating more flexible and more dynamic production capabilities. About 90 percent of industrial connectivity today uses wired connections which provide the high performance and reliability needed for automation. The problem here is they lack flexibility, not being able to rapidly meet changing production demands for example. 5G is the first wireless technology with high throughput, low latency and extreme reliability that could replace wireline connectivity in the factory. Effectively, 5G is the full replacement for today’s wired networks. Wireless connectivity allows additional machines to be connected by simply equipping them with wireless sensors and actuators and if required, network capacity can be scaled to handle new traffic. However, there are 5G security and interoperability challenges to consider.


For Service Providers to be successful in the 5G era, early adoption and developing new ecosystems will likely be the best strategy to win. 5G will create many new opportunities for Service Providers to do business with nearly every vertical industry. Opposed to this is that Service Providers will face increased competition, not only from the usual suspect competitors but mainly from new entrants to the market. Because of its capabilities, 5G will attract companies that come from other (unexpected) industries which weren’t considered before by Service Providers.

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