How 5G could transform cellular business models

Professor Mischa Dohler was at the Johannesberg Summit May 10-12th. Below he gives his thoughts on how the Summit’s 5G discussions have moved over the past two years, and an outline of what he spoke about – including how 5G could change some current business models.

Johannesberg Castle played host to the Summit

5G was high on the list of topics at the annual summit at Johannesberg Castle, Stockholm earlier this May, as the royal gates were opened for wireless and mobile ICT professionals.

King’s College London professor, Mischa Dohler, was one of those present and he believes that all on the round table accepted the next-generation network will be revolutionary.

“5G will be a game changer”

‘We all seemed to agree that 5G will be a game changer ,’ he said. ‘That’s in the sense that it won’t be business as usual as we have seen in 2G-4G’.

‘Two years ago we all disputed what 5G will look like; last year, we all disputed what it should be able to deliver’, Dohler said. ‘This year, we discussed mainly how we are going to do it technically and what the applications look like going over that 5G network’.

In terms of applications, some over-the-top (OTT) and service companies were invited along, such as Netflix and Sony, to give their views. However, Dohler admits that he was surprised at how those companies seemed ‘pretty happy with currently available and planned 4G capabilities’.

But he does think that the industry ecosystem was more open to his more revolutionary ideas than it has been in the past.

‘I talked about taking a revolutionary approach to the cellular design by forgetting about the weaknesses of cellular and rather focussing full power on the strengths. The strengths being that 3GPP is the only community which was able to build a business model of a recurring monthly revenue fee from billing the wireless edges (IEEE nor anybody else managed to do this). 3GPP should leverage on this more broadly.’

3GPP should forget about user data provisioning but rather focus on becoming the control channel of any system needing control

‘Also, given most capacity improvements over past decades came from smaller cells, the current arrangement of the Core Network heavily holds back scalability. I thus suggested to thin or even remove the core network, whilst not killing the core functionalities of QoS provisioning; authentication/billing/etc; and mobility control.’

‘Furthermore, when you look at the capacity increase of Wifi and 3GPP over the years, Wifi is always 1-2 orders of magnitude higher than 3GPP – this is about the ratio of data versus control channels. I thus suggested that – long term – 3GPP should forget about user data provisioning but rather focus on becoming the control channel of any system needing control, be it IEEE Wifi, or mmWave, or anything else. It made a few people think but there are operators who agree with me!’

He also spoke about accelerating time to market by shortening standardisation cycles. ‘I proposed to break up 3GPP into several small streams, or make it even fluid (i.e. get rid of the “Gs”) so that each area can standardise on its own’, he said. ‘Furthermore, I overviewed ETSI’s “crowdsourcing standards” concept, a revolutionary approach introduced by the CTO of ETSI’.

Finally, he fired a warning to current operators, who he believes should be ‘very worried’ about new business models and two things in particular:

‘First, we are very close to ISPs becoming universal operators . For instance, Google Fi + Wifi Calling is pushing this. Since people spend most of their time indoors, most calls will happen there to a Wifi access point; the rest is covered by femto or through Virtual Mobile Network Operator deals. That would massively change the balance in the eco system because suddenly BT, Sky, TalkTalk will be in the equation!

“many critical industries around the world will refrain from using their equipment”

‘Secondly, I told the operators that until now they did the customer (consumer) acquisitions and thus could have several vendors compete against each other. That may change very quickly. Notably, 5G might be really about vertical industry outreach and providing capacity and MTC capabilities to a company like Skanska or Rolls-Royce.

‘Here, the customer (industry) acquisition is currently only done by vendors, such as Ericsson and Cisco. That puts them into a strong position long term as they will be able to have operators compete against each other to offer the best data plan. That will also heavily shift the game for Huawei since many critical industries around the world will refrain from using their equipment.’

‘We are in for an interesting dynamic over the coming years’.

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