5G improves network determinism and supports digital transformation

  [[326206]]

Operators see enterprise and industrial Internet as growth engines

In the previous article "Digital Transformation Demand Creates New Space in the Core Network Market", Yang Guang, Director of Wireless Operator Strategy at Strategy Analytics, mentioned that China Mobile sees enterprise and industry Internet as the hope for growth in the 5G era. If we look at China Mobile's financial situation over the past three years, we can understand this choice.

In the past three years, China Mobile's enterprise business has achieved double-digit growth, while its consumer business has grown slowly and even declined in two years. In fact, mobile operators around the world have the same experience. According to Strategy Analytics' Global Wireless Operator Performance Benchmarking database, the highest growth rate of global mobile operators' business revenue in the past five years was only 1.1%. Operators are eager to find a new growth engine. At present, the enterprise and industrial Internet are the hope for this new engine.

SLA becomes the stepping stone for operators to enter vertical markets

Unlike 3G and 4G, 5G can not only provide "best effort" mobile broadband services, but also support ultra-reliable and ultra-low latency communication (URLLC) services. The URLLC feature, together with edge computing and network slicing technology, enables operators to guarantee end-to-end service level agreements (SLAs) on wireless networks. SLA management capabilities can enable operators to support certain mission-critical applications that traditional wireless networks cannot support.

Remote control of container cranes at port terminals is one such case. According to the "5G Smart Port White Paper" jointly released by Huawei, Shanghai Zhenhua Heavy Industries, China Mobile and Vodafone, in order to achieve remote control of container cranes at the terminal, the reliability of the control signal transmission link should be as high as 99.999%, and the waiting time should be less than 30ms. 3G, 4G or other traditional wireless technologies are difficult to meet such high requirements for reliability and latency. On the other hand, although wired technology can meet the reliability and latency requirements, it cannot provide the flexibility required for crane operation. 5G NR, edge computing and network slicing can meet the requirements of reliability, latency and operational flexibility at the same time, and is the only solution in the current communications market that can meet such mission-critical applications.

Compared with the traditional "best effort" service, the network SLA capability and deployment flexibility provided by URLLC can create greater business opportunities for operators. Let's continue with the port as an example. In addition to remote control of container cranes at the terminal, there are many other applications in the port that require wireless connectivity, such as employee communication, PTT and dispatch communication, cargo tracking and management, equipment and facility status monitoring, video surveillance, ship-to-shore communication, and remote control applications that do not require such high reliability and low latency. In general, port operations have a huge demand for wireless communications. Traditionally, port operators deploy dedicated communication systems and operate them themselves. Now, the SLA capability of 5G networks can serve as a stepping stone for telecom operators to enter the port communication market. By serving applications that require ultra-high reliability and ultra-low latency, telecom operators can enter the huge port communication market and increase the stickiness of corporate customers.

The COVID-19 pandemic may further increase the demand for URLLC applications. With the support of 5G capabilities, robots and AGVs (automatic guided vehicles) have been widely used in occasions such as delivering medicines, measuring body temperature, and checking isolated patients. It can be expected that after the epidemic gradually stabilizes, related vertical industries such as healthcare, emergency rescue, transportation and logistics will accelerate their digital transformation. This may bring more market opportunities for telecom operators.

Accelerating digital transformation with 5G deterministic networks

5G is the first mobile communication system that can perform end-to-end SLA management. Improved network determinism is essential for mission-critical applications, namely 5G deterministic networks. At the same time, compared with wired solutions, wireless technology can provide greater deployment flexibility for vertical industry users. Therefore, 5G deterministic networks have been warmly welcomed by vertical industries. Regulators in Germany and Japan have allocated dedicated spectrum for private 5G networks to support enterprise digital transformation. Telecom operators and vertical industry companies are actively exploring corresponding business models and deployment solutions to give full play to 5G capabilities and support vertical industry applications.

The scenarios of vertical applications are very diverse, and there is no solution that works for all situations. The exploration of business models and deployment solutions is of great value to the continuous expansion of 5G applications in vertical industry markets. Strategy Analytics summarized the possible deployment models in the report "Where is the 5G Enterprise Opportunity for Telecom Operators?" As the industrial interconnection applications based on 5G technology continue to grow, we expect more deployment practices to emerge in the near future.

We should also note that software and applications are important components of a healthy ecosystem. The telecommunications industry should actively promote the SLA guarantee capabilities of 5G systems to industry application developers and encourage developers to use this capability to improve industry applications.

As Phil Kendall, Executive Director of Carrier Strategies at Strategy Analytics, points out in his blog post “Should Carriers Delay 5G Deployment Plans Until 2021?”, the COVID-19 pandemic “is prompting many enterprises to accelerate their digital transformation plans, and 5G can play an important role in creating positive outcomes from the current crisis.” We expect to see growing demand for flexible and deterministic network infrastructure across vertical industries. 5G deterministic networks can be an accelerator in the digital transformation process.