5G and the new players around the corner — Part 1

When looking at the cellular network and its evolution since 2G we can see major changes along with the market trends like moving to IP and rise of over the top apps, however the architecture of the core network hasn’t change a lot. In fact, we can see a growth in amount of components which fulfil the demand but the core architecture remains the same.

Looking at 5G and its requirements it’s hard to believe and understand how the current 4G will fulfil the requirements set by 5G standard organization (like NGMN).

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In the illustration above you can see some of 5G use cases and it’s trivial to understand what 4G is unable to support this demand. A few reasons for that:

• 4G is centric by design
• 4G is monolithic by design
• The system is strong as its weakest link
• Limited capacity
• No tolerance to failure
• Cannot be scaled easily
• Bottlenecks tendency
• Traffic is based on Tunnel and gateways
• It was not designed for the cloud
• Downtime is not an option

So 5G architecture should be different and to support new business cases that the industry is talking about — like the connected cars and the devices we will have around us (IOT). In a contrast to what we have today, the support of IOT should be based on a massive scale without of capacity planning issues (to support exponential growth of sensors such as gas meters or google Nest), without of bandwidth issues (to support Netflix and YouTube) and without of latency issues (health care devices). As the adoption of these services will continue its growth the cellular business will start to bloom again.

However when looking at the cloud landscape, we can find some empty segments which can bring more new players in to the 5G market.

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On one side of the map we can see OTT that leverage mobility for their own business and on the other side we can see Telcos as OTT business enablers. Still Telcos continue to make huge investments in the enterprise cloud domain and they believe they have an advantage as the network owners. Still, their operational models have to change in order to close the gap.

It’s not a secret that Facebook and Google are looking at 5G as a growth engine to their businesses. Massive connectivity will have a huge impact on their existing businesses and provide new products. This is why 5G can make a revolution in the market and create a new kind of service provider, the “Super Carrier”.

What is a super carrier?

A super carrier is a combination of a traditional service provider which already has a footprint (RAN) and OTT provider with ability to adjust to newest industry trends and innovation strategies.

Since OTT will not deploy any RAN infrastructure, they will have to rent them from the service provider. Some of OTT already has partnership with major service providers and they are already selling Telco service. Google Fi project is a perfect example how google is controlling the monetization of the end user while T-Mobile and Sprint are just providing the infrastructure. Google Fi allows to the end user to buy a SIM from Google and benefit from a free mobility across the US and EU without extra pay for rooming, or dealing with mobility issues. It switches between networks and even WI-FI access points without manual interactions. Project Fi intelligently connects the end user with the best network at every location whether it’s Wi-Fi , 4G LTE or 3G networks and dynamically determines based on following factors which network is the best:

• Based on signal strength
• Based on signal to noise ratio
• Based on bandwidth availability
• Based on channel availability

Project Fi is a perfect example how and OTT use Telco as a dump pipe and creates new business models. But the big question is what will happened if the OTT will decide to build its own core network? What will happen than?

See you at the next post ….