In April 2019, South Korea became the first country to adopt 5G networks on a large scale, marking the beginning of what promises to be a period of radical change in the telecoms industry. For the operators, the 5G era opens a range of opportunities, both in delivering the ultra-low latency that retail customers increasingly expect, and in the enormous capacity and bandwidth that business customers require to push boundaries in IoT, enterprise networking and critical communications.
However, being able to offer 5G capabilities alone is not enough to safeguard an operator’s market position through the next wave of connectivity. For all the potential 5G use cases that it presents, the business models that worked in the 4G era will continually be challenged by fiercer competition and tighter margins. To grasp the 5G opportunity, telecoms companies will need to develop and deploy new capabilities, leveraging a far greater depth of network insights in order to differentiate their customer offering with innovative services that translate into new revenue opportunities.
The age of connected everything
Any major technological innovation inevitably attracts popular attention, especially one that has significant implications for mainstream users. What’s ground-breaking about 5G isn’t so much the technology itself, as the capabilities it enables. Once rolled out fully, 5G will empower even more pervasive use of connected devices in both personal and professional environments. It will also enable the emergence of a new set of enterprise technologies, spanning from widespread platform consumption and edge services through to artificial intelligence and smart assistants, all of which will benefit from more robust connectivity with lower latency.
5G therefore isn’t just about a faster network – it’s about integrating an entire ecosystem of technologies to meet the service needs of the ‘connected everything’ age. Delivering this hyper-connectivity will require a new set of tools to connect devices and applications to the telecom network and facilitate the rapid deployment of new services. As digital transformation becomes increasingly central to business strategy, the appetite for high-density connectivity is strong, making 5G a viable competitor to Over-the-Top (OTT) services in enterprise and industrial applications. This is reinforced by IDC research that shows 65% of network operators in Europe have reported interest from enterprise customers in 5G services.
Staking a claim on an emerging market
For telecom companies, the question is far broader than if and when they make 5G available to their customers. Rather, it’s about what role they’ll play in this new, hyper-connected economy. Operators are obviously keen to capitalise on positive sentiment around the technology, but a ‘me too’ market strategy seldom produces a competitive edge. For 5G to become a solid value proposition, each operator must think carefully about how it can be used to offer a differentiated service that fits with its enterprise customers’ wider objectives. These customers are typically looking to the next five to 10 years. They are seeking to build the solid technological foundation now that will support the availability, robustness and scale of connectivity they’ll need tomorrow.
Many of these customers have spent recent years grappling with the challenges of reinventing their IT infrastructure and operations, and have the scars to prove it. In a 5G world, the case for change becomes more pronounced as the inadequacies of businesses’ inflexible and capex-heavy legacy infrastructure become more apparent. The advent of 5G presents an opportunity to strengthen their transformation strategy with a digital platform that offers the resilience, low latency and agility to continually roll new services out for their customers.
Differentiation through open source
For its business customers to be able to build next-generation platforms, the telecom operator itself must be set up for rapid delivery and constant innovation. This is unlikely to come from telecom operators that rely on fixed-function hardware and legacy approaches to software development for their foundational infrastructure. Without flexibility built in, the operator risks being left behind by more nimble competitors.
It’s in this regard that open source has become an attractive proposition. By embracing open infrastructure, composed of open source software, non-proprietary hardware and multi-vendor collaboration, operators can create a fully virtualised infrastructure capable of delivering critical services. Using the open source functionality of an OpenStack cloud, operators can reorient their service delivery to become programmable, software-defined networks running a suite of virtualised network functions. With an open source network operators can bring the same speed of innovation to both the standard components of its service and to those which sets it apart from its competitors.
It’s this focus on interoperability, collaboration and rapid deployment that has driven Canonical’s partnership with BT. As the world’s longest-running telecoms operator, the company is well aware that history alone isn’t sufficient to maintain its position in the next era. BT’s focus is on reinventing its operating model in order to deliver a seamless service experience and fuel network innovation.
Like other operators, BT is therefore leaning on open source, using OpenStack to build the key components of its 5G core. This includes the integration of Network Function Virtualisation (NFV) as a means for building a more resilient and scalable network and unifying fixed, mobile and Wi-Fi technologies to provide one seamless and responsive experience for its customers.
Blurring the boundaries
We are entering a new era of information and communications technology where software and hardware are becoming deeply intertwined. As 5G becomes ubiquitous, this distinction will continue to fade. Telecoms operators therefore need to be looking at how they can embrace a software-centric approach through NFV in order to build the cloud-native, automated 5G networks of tomorrow and redefine how their services are architected, maintained, and operated.
Replacing slow and expensive hardware and infrastructure with the openness and scalability of virtualised networks holds the key to faster market growth and lower operational costs. In turn, this will support 5G as a viable offering and competitive differentiator in a new era of connectivity.