Overview and Background

The fifth generation of mobile networks technology (5G) is expected to have a significant impact on businesses as well as on the wider society in the coming years. The technology will transform the mobile and connected society in an unimaginable way. It is understandable that the technology will provide tremendous improvements and growth in the connectivity and traffic volume. However, use cases that will leverage this improvement and deliver innovative use cases to the society are far more critical.

Technology providers / vendors, governments and telecom regulatory bodies have shown keen interest in 5G. Telcos are, however, still grappling with the business case of 5G implementation: they haven’t been able to fully exploit and monetise their 4G implementations yet. In the GCC, the telecom market has always been controlled to favour local operators, which is why traditional telecom revenues have remained reasonably intact. However, increased cost pressures, market competition, and the push to diversify and grow revenue are driving operators to innovate and identify new revenue streams. 5G is certainly one such avenue that can open doors to numerous new opportunities. However, the magnitude of investment needed for 5G implementation vs. the visibility on its revenue potential is resulting in apprehension over 5G investments.

5G certainly opens up a new world of opportunities for operators, who definitely need a stronger ecosystem to build proper solutions to leverage 5G technology. Fixed Wireless Access is expected to be the first 5G commercial use case – possibly the only one that can be commercialised in the near future. Other cases like autonomous cars, emergency communication, factory cell automation, remote diagnostics, high-speed train, large outdoor events, connecting the geographically dispersed devices, VR and AR, and maintenance are still expected to be validated post the announcement of 3GPP release 16.

5G from a Telco Perspective

While we agree on regional Telcos’ apprehensions over investing in 5G, the technology no doubt offers tremendous opportunities, and it is only a matter of having a clear and focused 5G monetisation strategy, along with a vision and drive to develop innovative use cases. The critical component is the right technology partner that can support the implementation of 5G technology, provide end-to-end (i.e. from network infrastructure to terminals) perspective, and help in developing use cases. The technology partner should have a strong ecosystem across the wireless access, transport, cloud, network applications, and management layers and most importantly help the operator in addressing requirements across end-user segments such as consumers, government, wholesalers and enterprises.

In countries like the UAE, the KSA, and Qatar, the national agenda of governments coupled with scheduled global events (EXPO, FIFA world cup etc.) will push Telcos to invest in 5G, resulting in significant and inevitable pressure. Hence, having a proper plan and a strategic partner on board will only help in this technological and business shift.

Outlook

5G is here, offering tremendous growth and innovation opportunities. Not only should Telcos embrace the change, but vendors should also support operators through this transformation. Most of the network equipment vendors have signed MoUs with multiple operators across the globe, as well as in the region, and Huawei is no exception. From the devices perspective, the availability of 5G compliant devices is set to ramp up in the coming years. However, vendors like Huawei have recently and proactively announced their first 5G chipset, as well as the first 5G C-band CPE as part of their products portfolio. This certainly helps Huawei to stay ahead of the competition and feature as one of the vendors providing a diversified and complete suite of solutions across segments, namely handsets for consumers, chipsets for terminals, wholesale and telecom capability with the 5G technology, and a variety of solutions for corporate and government set-ups.

Authored by: Saurabh Verma, Associate Director, Digital Transformation Practice, Frost & Sullivan

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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