The arrival of 5G looks set to disrupt both the services and vendor sectors of the mobile industry, according to industry experts in London.

Joanne Taaffe

September 23, 2014

3 Min Read
5G Threatens Mobile Sector Disruption

LONDON -- The 5G Huddle -- What 5G looks like depends a lot on where you're standing.

But whatever it ends up looking like -- and speakers and delegates at this week's 5G Huddle in London remain unsure -- it has the potential to upset both the operator and equipment supplier ecosystem.

"Flattening the core and the radio access network allows smaller companies to offer services," says Mischa Dohler, head of the Centre for Telecommunications Research in the Department of Informatics, Kings College, London -- and it's not good news for mobile operators. "Now there is competition in a space that wasn't very competitive," adds Dohler.

He argues the "tectonic shift will [come from those] who will be the final service client," with a shift from a B2C ecosystem to a B2B ecosystem. "Service opportunities will not be the consumer, but will come from other industries," contends Dohler, who has (it should be noted) founded a B2B M2M company.

However, other delegates agree. Mobile operators "certainly have challenges from new entrants," according to Nigel Jeffries, chairman at the Wireless World Research Forum (WWRF). Jeffries believes there are many "opportunities for [mobile operators] to move into new business areas such as Internet of Things [IoT]," although he acknowledges that some industries, such as the automobile sector, are already busy carving out a business from specialized IoT services.

For mobile operators the promise of new services revenues remains uncertain, while network traffic continues to grow. As a result, operators are looking to cut equipment costs by introducing virtualization and commoditized hardware, and that puts the squeeze on suppliers.

"It is quite a challenge. Virtualization [means] selling software in generic boxes. It's more than a new RAN [radio access network], as you mix together more macro cells and break down the traditional hierarchy," says Jeffries.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

As a result, today's large telco suppliers need to be prepared to sacrifice revenues from integrated hardware and software to survive.

"The ecosystem will evolve. The TEM [telecom equipment manufacturer] will still exist, but it has to walk the path to make sure it is soft and agile enough," according to Chih-Lin I, CMCC Chief Scientist, Wireless Technologies, China Mobile Research Institute (CMRI).

Chih-Lin I foresees operators using largely off-the-shelf servers as a platform for hosting applications and basestations on the same computing platform. "If you have 10,000 basestations intelligently located in one [place] and the site is left with the radio head that you can dynamically configure, it will transform [the telecom equipment sector] and bring in lots of IT players. Our partners included Intel and at one point included IBM. I wouldn't be surprised if Cisco is in soon," she says.

But traditional telecom network suppliers are still in the running. "Huawei and Alcatel-Lucent still know the whole system the best, and that expertise is hard to reproduce. It's better that we all evolve together. If we [as operators] don't evolve, we won't be competitive and we won't survive," concludes Chih-Lin I.

— Joanne Taaffe, special to Light Reading

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About the Author(s)

Joanne Taaffe

Joanne has been covering the global telecoms industry since 1999, when she joined Communication Week International in London. Joanne went on to become Deputy Editor of Total Telecom Magazine in Paris. Now back in the UK, Joanne continues to write about all things telecoms, but also makes time to contribute to a French military history magazine, "Guerres & Histoire."

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