Standalone shaping up to be 5G's next big flop
If you have just bought an iPhone 12, commiserations. The biggest improvement on the iPhone 11 is a 30-gram weight reduction, which might just shave a millisecond or two off your morning run. Oh, it's squarer than its predecessor, too – all sharp right angles instead of curvy edges. If you run with your phone in an armband, those milliseconds are probably lost to poor aerodynamics.
Inconsequential they may be, but these are the main differences. They are certainly more noticeable than the iPhone 12's compatibility with 5G, one of its supposed selling points. Even the store assistants are downplaying the network technology as "not widely available." Indoors, you're likelier to be on Wi-Fi, anyway. Outdoors, if you wiggle your ears, keep your arm outstretched and stand on one leg, you might just catch a 5G signal in some town centers.
It wouldn't be worth the effort, though. The only app that performs much better on 5G is a speed test. In the absence of a killer application, the industry is all aflutter about a souped-up version of 5G called standalone. Non-standalone, the variant any Brits with a 5G service are using, needs a 4G crutch to move from A to B. Standalone canters along without props.
This is all thanks to new core technology that UK operators are now introducing, mainly in partnership with Ericsson. The industry loves the 5G core because it comes with a long list of juicy buzzwords and jargon, including "cloud-native," "microservices," "latency" and "network slicing," all of which and more feature in this Ericsson blog.
But it's a difficult pitch to the market. The whole idea about network slicing is that it would allow an operator to run many different types of service over the same physical infrastructure. It benefits the provider, not the customer, and no one outside telecom would ask for a network slicing service. Organizations simply want guarantees on bandwidth, reliability – perhaps even latency. If these can be delivered more profitably with network slicing, good for the provider. But don't expect customers to whoop like an Olympian who just won gold.
As for latency, the premise is that standalone 5G would slash important milliseconds off this signalling delay. Latency sounds more marketable than network slicing, and a sub-10-millisecond service might be needed for robotics and other advanced applications. But fiber and Wi-Fi would suffice for residential gaming, and there is no other service with major appeal crying out for low latency today.
What form might this eventually take? Forget self-driving cars and remote surgery, the hackneyed examples, unless you have suicidal tendencies. Kaan Terzioglu, the CEO of VEON, envisages a Star Trek-style universal translator, allowing monoglots from different countries to chat as if they spoke the same language. It is probably three to five years away, he concedes. Until then, he prefers to focus on 4G rollout in his emerging markets.
Regardless, latency may be hard to "monetize," in business parlance. Most operators seem to be teaming up with public cloud giants here, which means splitting revenues with those companies or paying them a fee. One risk is that partnerships diminish the telco role. Research conducted by Beyond by BearingPoint and Omdia (a sister company to Light Reading) shows that so-called hyperscalers have "accelerated their push into network activities" during the pandemic, even as that has "exposed some limitations of CSPs [communications service providers] when it comes to capabilities to create new agreements at speed."
Clearly, there has been no sales boom for operators that have already launched a low-latency service in tandem with a public cloud. Verizon, which joined forces with AWS in late 2019, reported a respectable 3.7% year-on-year increase in revenues at its business unit for the recent second quarter, to about $7.8 billion. At AWS, yet to report second-quarter results, sales shot up nearly a third in the first three months of the year, to $13.5 billion.
No telcos required
Defenders of the 5G faith say the technology must be assessed holistically, not based on its component parts. Building a connected, wireless, robotized and highly automated factory minus the economics and guarantees that come with standalone 5G would be mission impossible, many would argue.
The point is reasonable, but that does not mean standalone will be lucrative for mainstream telcos. Some organizations do not even want telcos involved. Instead, they have bought their own spectrum licenses and plan to build and operate private 5G networks. According to the Beyond by BearingPoint and Omdia research, only 16% of enterprise projects are CSP-led, while a fifth of businesses plan a do-it-yourself approach. Nokia, one of the world's largest 5G vendors, caters to enterprise customers through telcos as well as directly. On a like-for-like basis, its enterprise sales were up 18% in the first quarter.
Regulators are another potential threat to operators. The European Union has taken a dim view of telcos that prioritize any Internet services, regarding this as an affront to "net neutrality" principles of Internet openness and non-discrimination. A loophole allows telcos to offer "specialized services" if these do not interfere with basic Internet access. But Telenor Magyarorszag, a Hungarian operator, was admonished in late 2020 simply for ditching the usage caps attached to some applications and retaining them for others. Rules might stymie network slicing depending on how they are interpreted.
None of this destroys the business case for investing in standalone technology. In the US, T-Mobile's 5G service became more widely available after it switched on its standalone service, according to research carried out by OpenSignal. With non-standalone, the operator had to maintain a connection with 4G, which it provides over mid-band spectrum. Standalone meant it could make full use of its low-band frequencies, far better for coverage (if not speed).
Unfortunately, due to a lack of smartphones that support standalone carrier aggregation, T-Mobile has not been able to run 5G services on low- and mid-band spectrum simultaneously. Coverage has been good. Connection speeds have not.
Forthcoming devices will address that problem. But if various network efficiencies and marginal performance improvements turn out to be standalone's main benefits, it will rank alongside non-standalone as another major telco disappointment. "5G standalone will allow us to launch new services not even contemplated today," said Howard Watson, the chief technology officer of the UK's BT, during a recent press conference. The time for contemplation is long overdue.
- Ericsson 5G deal with O2 cements its core dominance in UK
- Ericsson bags 5G 'core' deal with Vodafone UK
- BT's 5G rollout is slow-going, but it seems ahead of its rivals
- Vodafone trumpets launch of standalone 5G in Germany
- Toward a common 4G/5G core network
— Iain Morris, International Editor, Light Reading