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.