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Author: Anudha Sawarkar

Instead of waiting for 5G Services, Monetize now on the TCO savings from an Integrated Mobile Core

by Anudha Sawarkar Anudha Sawarkar No Comments

The arrival of 5G can feel a bit like Waiting for Godot sometimes. Is it here already? Is it coming soon? Did it ever really exist at all?

Of course, 5G is real, as are the promises of new mobile experiences and the increased revenue opportunities they represent. But it may be years before mobile service providers see any of that revenue, according to industry analysts. One popular report conducted by Intel and Ovum pegs the tipping point for 5G revenue at 2025, more than five years away. So does this mean service providers that are already touting 5G capabilities aren’t making any money on 5G yet? Not necessarily.

It’s true that revenues from services such as virtual reality and self-driving cars are still down the road. Whether 5G network transformation drives 5G services, or vice versa, remains a chicken-egg conundrum that seems to be divided along geographical lines. In areas such as North America and Europe, many service providers have already begun their 5G transformations. In other regions, such as the Middle East and Africa, service providers have adopted more of a wait-and-see approach.

A new report from ACG Research and Affirmed suggests that service providers waiting for 5G services are missing a big opportunity to save money and generate new services revenue right now. Titled “The Integrated Cloud Core Advantage: A TCO Analysis,” the report finds that service providers can save millions of dollars—as much as 71.6 percent of their network’s total cost-of-ownership—by moving to an integrated 4G/5G mobile core solution. The report also reveals TCO reduction strategies that service providers can take to dramatically reduce the time it takes to create, deploy and decommission new consumer and enterprise services. Reducing from months to days with an integrated mobile core platform can open up new opportunities for innovation and revenue over the next five years.

In the report, ACG outlines what service providers can do today to monetize their 5G transformation:

  • Lower network costs through virtualization and common off-the-shelf hardware components;
  • Increase scalability and server performance, up to 125 Gbps today with the ability to support 400 Gbps in a few years;
  • Handle traffic more efficiently by reducing the number of packet “touches” to one;
  • Automate manual processes such as service provisioning.

Achieving those goals with a standalone mobile core platform—even one that uses “best of breed” components—is virtually impossible, and one of the main reasons why many service providers have not realized significant savings from their virtualization efforts to date. ACG suggests the problem doesn’t lie in virtualization itself, but in the inherent complexity of multivendor systems. ACG found that service providers could realize significant savings of up to 81% in capital expenses (CapEx) and over 94% in Operational expenses (OpEx) by moving to the Affirmed integrated mobile core model.

The important caveat here is that moving to the Affirmed mobile core platform is also a move to 5G, because the Affirmed components morph seamlessly from a 4G to 5G architecture by design. In other words, you don’t need to wait for 5G revenues to arrive to build your 5G network. You can build it today using Affirmed’s platform, pay for that transformation by reducing network costs and rapidly creating new services, and be in a perfect position to capitalize on “big” 5G opportunities such as IoT applications and virtual reality when they arrive, because these capabilities to support services like network slicing, mobile edge computing are already part of the Affirmed platform today.

So, what are you waiting for? To learn how Affirmed can power your revenue growth to 2025 (and beyond), download the free TCO report.

5G Services: Profitable for Business

by Anudha Sawarkar Anudha Sawarkar No Comments

4G opened up a whole new world to consumers. Seemingly overnight, a vast ecosystem of mobile applications appeared that allowed consumers to do everything from watch movies on their tablets to make bank deposits from their smartphone. But 4G didn’t have a substantial an impact on enterprises beyond the need to mobile-enable their existing services.

The Difference Between 4G and 5G

5G, however, will have an enormous impact on enterprises. What 4G has been to consumers, 5G will be for enterprises: it will change the way they interact with the world around them. And, for service providers, 5G opens up a new world of opportunities to partner with enterprises.

Perhaps nothing illustrates the difference between 4G and 5G more clearly than the projected markets that service providers will serve in the future. The chart below on the left shows where service provider revenue comes from today; not surprisingly, consumer-centric services drive the lion’s share of revenue. But on the right, we see where revenue sources are expected to be in 2025. That’s not a mistake: the vast majority of service provider revenue in the next five years will come from enterprises, not consumers.

5G Targeted Services

5G: More about vertically targeted services

Enterprise customers have historically been the most profitable for service providers, yet it remains a small portion of the overall market. 5G changes all that because, for the first time, service providers are offering enterprises more than connectivity; they’re offering innovation that allows enterprises to not only do things more efficiently, but do different kinds of things, from smart factories to drone deliveries.

Why 5G will be Profitable for Service Providers

Right now, 5G is a wide-open field of opportunity. We’re only beginning to see how the ubiquitous mobile broadband, IoT interoperability and low-latency communications enabled by 5G will drive business innovation, but the early applications are already generating excitement: self-driving vehicles, remote real-time medical care, smart factories, smart cities, augmented reality, and the list goes on. In these scenarios, service providers aren’t simply providing the underlying network infrastructure; they’re critical partners in the service delivery as well, adding analytics, intelligence and assurance to 5G services that will differentiate them in the market.

No wonder service providers are excited about 5G. But they’re not the only ones. Over-the-top (OTT) competitors, from Amazon to as-yet-unknown start-ups, will figure prominently in the 5G mix, and mobile service providers will need to figure out ways to out-serve and out-innovate them. That competitive advantage could come in the form of unique network intelligence that allows enterprises to customize their 5G services, or by providing a better service experience through technologies such as Wi-Fi data roaming.

One thing is clear: service providers need to begin mobilizing their business model around 5G enterprise opportunities today. For example, we’re beginning to see tier one operators restructure their organizations around these opportunities. In the past, tier ones might have divided their business units between consumer, enterprise and, maybe, IoT. Today, it’s not unusual to see service providers structured by vertical industries—healthcare, banking, manufacturing, transportation, etc.—with new business initiatives built specifically around those industry opportunities. This gets to the heart of 5G’s transformative potential, because this isn’t simply a change in the way that the network is architected, but a change in the way a service provider’s business is architected.

What enterprise services will drive your revenue in the future? It’s a question you need to ask yourselves today, because it’s a certainty your competitors already are.