Is Virtual Becoming Real?
5G offers improvements in reliability, ultra-low latency that decreases the time lag to transmit data, and device synchronization, which allows data to be transmitted without losing any information. The eventual explosion of more advanced IoT devices could be better supported by 5G networks. Factory robotics, security/delivery drones, and logistics networks, for instance, could be better facilitated with 5G services. Autonomous vehicle connections can be done on 5G, allowing for almost zero latency situational awareness.
In the factory of the future, 5G will allow devices on the factory floor to communicate with each other with security, latency, and reliable machine-to-machine communication. For IoT to work in assisting smart city initiatives there needs to be a sufficient telco network layer to perform the connectivity to the relevant platform and applications. Telecoms are thus the thread which connects all the pieces together. In addition to higher speeds, 5G also allows ultra-low latency (1 millisecond or just 10% of that of LTE) and the ability to host up to a million devices per square kilometer at the same time (10x more devices vs. LTE).
In a 2016 Citi GPS report Re-Birth of Telecom into a New Digital Industry we noted how over the past two decades, telecom companies have been busy building infrastructure that is critical to the communications sector and how these networks are now the backbone of our increasingly digital economy. In the report that follows, we look at the how the ramp-up in investment for the next-generation 5G network is starting but note the scale and the scope of this upcoming transition will be challenging, the opportunities may take time to develop, and the path to monetization is uncertain.
Virtualization — the process of separating software functions from the hardware in a network — is one approach being used by operators to unlock significant benefits in terms of agility, time to market, cost, development of applications, initially in their core networks. In addition, virtualization is the minimum requirement to deal with the complexity of the new 5G network architecture and the services that come with it.
One step further is virtualizing the Access network through Open-RAN, which is an initiative for designing and building radio network solutions using general-purpose, vendor-neutral hardware and software-defined technology. With 5G, this means operators wouldn’t have to replace all the technology in their network in order to upgrade them for 5G. Open RAN can help mobile network operators differentiate their services and, if equipment vendors open up the interface between the radio and the broadband unit, can also foster innovation by allowing multiple smaller developers to deploy their software on generic hardware, giving operators flexibility and a more agile network. Allowing mobile network operators more flexibility in the hardware and software of their network through Open Ran should help them to avoid being the ‘dumb pipe’ for the digital ecosystem and instead embark on a digital transformation.
Authors: Georgios Ierodiaconou,Mau Messina,Peter Lee,Arthur Pineda,Michael Rollins, CFA,