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October 16, 2020
A handful of service providers across the globe have begun taking some very small, tentative steps toward a potentially major new source of revenues: charging money for lower latency.
Here are a few examples:
And Verizon is highlighting some of the initial users – including startups Zixi and YBVR – of its 5G edge computing service with Amazon Web Services (AWS).
To be clear, the business models around these kinds of offerings remain highly ambiguous. For example, YBVR's Sebastian Amengual told Light Reading his company hasn't yet discussed business models with Verizon. And POST in Luxembourg is offering its Blacknut-powered cloud gaming service for free to its 5G subscribers for a year.
Further, most such offerings don't yet have a strong connection to 5G – a technology often touted as a leading driver for the kinds of edge computing network designs that enable low-latency services. "It is proximity to the edge that is the killer app, not yet 5G," wrote Omdia analyst Chris Nicoll in response to questions from Light Reading. (Omdia and Light Reading are both owned by Informa.)
"Applications such as cloud gaming and 4K content delivery are being enabled by a strong edge cloud focus, rather than utilizing the low-latency communication capabilities of 5G," he added.
Indeed, most 5G providers have been focusing on deploying new 5G-capable radios in their networks rather than the distributed computing functions that would support low-latency connections. After all, the 5G transmission standard supports blazing-fast data speeds, but it's only applicable between users and cell towers. The remainder of the network – the route between a tower and a cloud computing service – must also be shortened (typically through an edge computing network design) to reduce a user's actual latency measurements.
Nonetheless, the fact that some operators such as Cox and Verizon have begun dabbling in the sale of low-latency services could address the "chicken-and-egg" conundrum that has so far stifled the space. After all, developers and others can't begin designing and selling low-latency services until operators actually begin to make those kinds of functions available.
Editorial Director, 5G & Mobile Strategies, Light Reading
Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.
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