The race to 5G & the challenges facing operators
We can all agree that 5G is the future. It is estimated that by 2023, there will be more than 9.1 billion mobile subscriptions and 1.5 billion cellular IOT devices relying on mobile networks worldwide. In order to support this immense demand and the necessary speed of services, operators will continuously strive to improve capacity, quality and functionality of their networks at one end while looking at ubiquitous digital transformation initiatives to deliver innovative services and customer experience on the other end. In line with this pressing agenda, Ericsson is tirelessly working with partners and operators to address impending market realities. Chafic Traboulsi, Head of Networks for Ericsson Middle East and Africa discusses the story of 5G and their agenda for 2018.
HOW WOULD YOU DESCRIBE THE READINESS OF THE MEA OPERATORS IN TERMS OF 5G?
The MEA region is vast and each market has its own unique dynamics at play. With that said, one thing that can be vouched for is the core connectivity which will still drive the majority of operators’ income, and the future of connectivity will remain central to operators’ strategies moving forward. Operators in advanced markets will seek to drive the digitalization agenda and create new revenue streams. Operators in emerging markets will seek to increase competitiveness by building on capabilities and striving for more streamlined efficiencies by marking transitions to the cloud for infrastructure and OSS / BSS operations. Operators in optimizer markets will look towards network upgrades to expand and provide new and improved services to customers through the use of small cells, network densification, and enhanced fibre utilization to improve spectrum efficiency.
IN YOUR OPINION, WHICH USE CASES OF 5G WOULD BE MOST POPULAR IN THE MEA MARKET?
Cellular IOT connections in the Middle East and Africa are expected to grow from 35 million in 2017 to 159 million in 2023 – a CAGR of around 30 percent. As the world becomes more connected, industries are experiencing an Ict-driven transformation, creating new revenue opportunities for ICT players. Cumulative revenue in the Middle East and Africa is predicted to reach USD 242billion through 2026.
5G will be an important technology in growing industrial digitalization, particularly for use cases dependent on ultra-low latency and high reliability. This presents an opportunity for service providers that are ready to explore revenue streams addressing B2B2X industry players.
Even though IOT is still in its infancy throughout many parts of MEA, there are still examples of how it has helped improve livelihood of communities and
5G commercialization will entirely depend on market dynamics and maturities of the ecosystem in general. However, what is heartening to note is the fact we are not too far off from this reality Chafic Traboulsi, Head of Networks Ericsson MEA
industries in the region.
For instance, in Turkey, smart agriculture initiatives have been ongoing since 2011, and similar initiatives are now ongoing in parts of Africa. The Saudi Arabian market has been exploring remote monitoring of oil wells and making temporary networks available in cases of disasters. In South Africa, Narrowband IOT (NB-IOT) technology will serve the region’s diverse needs, opening up new revenue streams as a result of industrial digitalization and improving standards of living in relevant countries.
HOW MUCH WOULD YOUR COMPANY INVEST IN 5G THIS YEAR?
Investment in R&D is not a destination, but an ongoing journey. Technology Innovation and leadership has always been a priority for us at Ericsson, and this is something we believe will sustain us in a dynamic marketing environment. While we can’t divulge details, Ericsson has recently secured credit facilities worth $370 million – and these new funds, beyond strengthening and providing financial flexibility, will be used to support R&D activities to further develop 5G and other mobile innovations.
AS WE MOVE CLOSER TO THE 5G STANDARDS, WHICH ARE THE OBSTACLES YOU SEE ON THE WAY THAT WOULD NEED TO BE HANDLED IN ORDER TO LEVERAGE THE COMPLETE POTENTIAL OF 5G?
Rather than obstacles, one should focus on the opportunities associated with largescale 5G implementation. We are lucky, to say the least, to be actively involved in the transformation that is upon us. The challenge in the race to 5G is facing three simultaneous scenarios – multi-standard, multi-brand and multilayers. Driving synergies, integration and scalability in the face of these scenarios will continue to be a challenge that will require consistently innovative solutions and offerings.
The reality is that new types of connected devices, from electricity meters to cars to household appliances, will be supported by mobile networks. Future mobile broadband users will expect “unlimited performance” – up to multiple Gbps in some cases and hundred Mbps generally available – to the point that traffic volumes can be up to 1000 times greater than what we see today. The IOT and largescale introduction of communicating machines will put many diverse requirements on the network in terms of latency, battery consumption, device cost, and reliability.
HOW LONG WOULD THE WAIT BE FOR THE COMMERCIALISATION OF 5G? THE BIG QUESTION- WHEN IS 5G COMING FOR REAL?
We don’t speculate on this and to be honest, it would difficult to provide a concrete timeframe, as 5G commercialization will entirely depend on market dynamics and maturities of the ecosystem in general. However, what is heartening to note is the fact we are not too far off from this reality. According to Ericsson’s 5G Readiness Survey published in October 2017, 78% of respondents were involved in 5G trials in 2017 as compared to 32% in 2016. Furthermore, 28% of respondents expect to deploy 5G in 2018. The survey also revealed that operators have further developed their business strategies for 5G services, looking beyond the consumer segment to foresee opportunities in the enterprise and industrial segments as well.
The top three industry sectors that were highlighted by survey respondents were media and entertainment, automotive, and public transport; but many also ranked healthcare as well as energy and utilities among the most attractive sectors for 5G applications. A clear majority of respondents believe that Internet of Things will play an important role and that third-party collaboration will be essential in this context.