Service Providers Look to Enterprises for 5G ROI
Finding and solving customer challenges that 4G can't address will matter more than sheer performance in making 5G profitable, wireless industry executives said at the Big 5G Event this week in Denver.
"If we are at this conference a few years from now and all 5G is, for consumers, is faster Internet, we will have missed the boat," said Nicki Palmer, Verizon's senior vice president of technology and product development. She spoke on a panel Tuesday morning exploring how to make 5G generate a return on investment.
Verizon will be charging a $10-per-month premium for consumer plans that include 5G, which Palmer called "a low barrier to entry." AT&T has floated the idea of charging for higher speed tiers, a concept that Igor Glubochansky AVP of mobility product management, cited on the panel. But panelists said customized enterprise services offer a greater potential for revenue from 5G. These may include wireless control of robots on factory floors and augmented reality for uses like guiding surgeons and firefighters.
Palmer cited a technology that startup Medivis, which has worked with Verizon, is developing. It would guide doctors in surgery by projecting dynamic 3D visualizations of the patient's organs as the surgery is carried out. This combines the high data rates and low latency of 5G, she said. Another startup, Qwake, has an application to show firefighters where things should be in a smoke-filled building.
5G opens up new opportunities for wireless in industry, AT&T's Glubochansky said. It allows for not just management control of devices but operational control. Enterprises so far have mostly used wired networks to link connected machinery in factories. Indoor 5G will make wireless competitive there through both lower latency and edge computing that can keep the data on-site for the security manufacturers demand, he said.
Some enterprise applications that 5G will make possible are ones that operators haven't even anticipated, said Craig Sparks, CIO of CSpire, a regional US wired and wireless operator. For example, some industries may need an IoT device that sits for years monitoring infrastructure, then detects an event that requires it to deliver data at 10Mbps. The service and orchestration capabilities to make that happen don't exist today, but they may as 5G reaches its potential. These types of customized applications are a far better opportunity for revenue than the potential to charge consumers for more speed, he said.
Verizon expects 5G revenue to begin this year, become meaningful next year and in 2021 to affect the company's bottom line, Palmer said. Building out the network and adding more capabilities will take time but should pay off.
"We're happy with the pace. We're going to go just as fast as we can," she said. "The more we solve those pain points... it'll build on itself."
Why this matters
Mobile operators recognize that 5G could transform industries, and they see that potential as key to their own evolution from providers of consumer mobile broadband to partners in creating customized services to enterprises. While 3G brought simple services like mobile e-mail, and 4G made mobile video possible, 5G ultimately could change businesses and industries more than the consumer experience. It must do that in order to pay back the massive investments being made in the technology.