Move on from just connectivity to earn revenue from 5G, says panel

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Mobile operators will have to offer more than connectivity if they are to make money from 5G.

Speakers at Capacity Europe’s panel on 5G monetisation say they will have to expand their offers – at a time when it is harder to generate returns, thanks to Covid-19.

Neil McRae, BT’s chief architect, made the case most forcefully, saying that the introduction of open radio access networks (open RANs) would save 15% on that part of the system, “not big enough to make a difference”.

But operators “are geniuses at deploying stuff”, he told the conference in a virtual session. That means they should offer their skills in device management, to institutions such as hospitals, and in routing.

Not data routing, meant McRae, but routing vehicles, and BT is already working with a local authority close to its Adastral Park research centre, he said. “We’ve cut 20% off the fuel bill,” thanks to the use of 5G antennas in council vehicles to enable routes to be planned.

“We’re smart at routing, and we’re able to sell something that largely hasn’t cost us any money to develop. This is massive from a carbon point of view,” said McRae.

John Simpson, head of product and partner management at Vodafone Carrier Services, said the group was working with a hospital in Düsseldorf on 5G enablement, to offer “rapid, real-time access to the data with high-power computing”. Simpson said: “Co-creation is absolutely key” to generating new revenue streams: not just medicine but also in areas such as logistics.

Patrick George, EVP for product and business development at iBasis, said that latency was “super key” to use of 5G in telemedicine. “I don’t have a magic answer [to 5G monetisation], but the thinking process, I am on it.”

McRae followed this with the observation that operators are “not making enough from the infrastructure to justify ourselves as a business”. Returns are “very low”, he warned.

Partnerships are the way: “We can’t do all of this ourselves. We have to create solutions that help enterprises.” BT is working with the Northern Irish port of Belfast to use 5G network edge computing with artificial intelligence to boost the loading and unloading productivity of container ships, he added.

Nan Chen, with dual roles in MEF – the former Metro Ethernet Forum – and in Ericsson, said: “From a MEF perspective, we see 5G as an access technology for delivering all services. Now you have access that hopefully will be ubiquitous.”

And, with his Ericsson hat on, he said the vendor is working on a start-up project to help the industry capitalise on 5G. We work with all carriers.”

Simpson warned that 5G will bring new business models, and will not replicate 4G. Vodafone is working with manufacturing plants, and wants to enable companies to predict when “something goes wrong”. The company is also wanting to work with its enterprise customers’ own end customers, “so Vodafone can plug into the value chain”.

This panel takes place during Capacity Europe, on Wed 20 October 12:00-12:45