Partner Content - F5.5G: key to new revenue streams for telcos, says Informa Tech VP

Jay Ian Birbeck

May 24, 2024

4 Min Read

As ETSI released the F5G Advanced and Beyond White Paper in 2022, and WBBA released the next-generation broadband development roadmap, the evolution from 1Gbps to 10Gbps has gradually become a consensus in the industry. Telecom companies worldwide are assessing what might compel them to invest in this next-generation network. Will operators be willing to invest in F5.5G?

Richard Mahony, vice president at Informa Tech, believes that the rollout of F5.5G will be driven by the dual forces of needing to handle the ongoing surge in data and the potential for new revenue opportunities that the technology theoretically presents.

"Clearly, we've got more high bandwidth services coming down the pipeline," Mahony told Light Reading in an interview, citing extended reality (XR) devices and AI as key drivers that "will not only require a great deal of bandwidth but will also need to be delivered with significant improvements in latency."

As XR and AI services become more prevalent, they will increasingly expose the inadequacies of current infrastructure, leading to slower speeds, increased latency, and a poorer user experience. Enhancing the quality of network connectivity will support the AI development as the foundation. "These applications will require latency improvements down to 3 to 4 milliseconds to provide a consistent user experience," explained Mahony. Only F5.5G networks will be able to cater to this.

However, some operators remain understandably wary of investing in F5.5G. And is upgrading merely to accommodate ever-increasing data demands essentially footing the bill for big tech?

Mahony acknowledges that, in isolation, the surge in network traffic is not a sufficient reason for many telecom companies to justify network upgrades.

Mahony views the true advantage of F5.5G as its potential to empower telcos to transform their service offerings, for instance, by delivering highly tailored services that cater to individual user needs.

"F5.5G will make it easier for operators to bundle content directly with devices, offering new types of media as part of their service packages," Mahony explained. "Many of these new media services will include new devices, and they can be included in the bundle. These new service and device bundles will drive new revenues."

This capability for customization is rooted deeply in F5.5G technology. With F5.5G and its key technologies such as FTTR, 50G PON, 100G metro WDM, 400G backbone WDM, etc., the network will provide high bandwidth, low latency, and high reliability connectivity with unprecedented control over service quality, down to managing individual sessions. This capability allows for tailored service propositions that adapt to user needs in real-time. AI can play a crucial role in this, optimizing network management to ensure stable connections and high-quality services, which opens up new avenues for revenue.

"If you can manage service quality, whether that's in terms of bandwidth or latency, or some other measure of reliability, you can begin to build out segment-specific propositions," Mahony elaborated.

"You might have a gaming package or a package to help remote workers. For example, you could offer VoIP services for calls, where you want a high degree of reliability on the voice and the video," Mahony explained. "And that can be provisioned as a permanent feature of a package, or it can be provisioned on an as-needed, on-demand basis."

Mahony also highlights the emerging opportunity of Fiber to the Room (FTTR), which enhances high-speed connectivity directly to users' rooms, becoming more viable as installation costs decrease. This, he noted, is also expected to drive significant revenue growth.

But still, there is question and doubt: will F5.5G actually be able to deliver on long-awaited new revenue opportunities for telcos?

Mahony thinks yes, and not just because of the F5.5G tech itself. Rather, he is optimistic about the market's readiness to embrace innovative service offerings from telcos, not least due to shifts in consumer behavior post-COVID. "The market is definitely ready for a proposition that goes beyond just speed," he stated. "It is now ready—and willing—to pay more for rock-solid access and to explore new payment methods."

Moreover, Mahony believes the need for F5.5G services will become increasingly apparent, notably in supporting burgeoning sectors like AI. "Fundamentally, you need this sort of high-performing network in order to realize the benefits of AI," he explained.

However, he cautioned that the success of F5.5G doesn't only depend on the technology but also on how well telcos can adjust their business models and communicate the value of these advanced services to consumers. "Unless the consumer understands the benefits, then the premium will never seem to be worth it," Mahony warned.

Telecos may be better equipped to navigate the challenges and seize the opportunities that F5.5G presents. If navigated successfully, F5.5G could signal a significant shift in how telecom services are structured and sold.

Mahony is hopeful. "We're going to see a lot of development, and it's definitely not all about speed any longer," he concluded.

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