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A momentous shift ahead

A projection showing the growing expenditure on private 5G to the point od surpassing the capital value of investment by Telecom Operators. Image credit: ABI Research

According to a market research published by ABI Research presented at their on line 5G Technology Summit on July 14-16 (you can watch the recording here) there will be a growing spending on private 5G networks (those serving factories, malls,…) in the coming year to the point that the yearly spending on private 5G will exceed the spending on public 5G (that is the one of telecom Operators). It will tke time, ABI expect the shift to be completed by 2036 and that is a long long time away i this fast paced world.

Actually it is so far away in time that one could be tempted to disregard it.

However I find this a very interesting foresight, worth of some thinking for its broad implications, even if it may turn out to be wrong. The fact is that such a forecast would have been inconceivable only 5 years ago. 5G is a telecom system and it is all about Telcos Operators, isn’t it? Well, not actually|

5G standards include for the first time some very interesting, and disruptive, features in terms of resource control. They are leveraging on NFV -Network Function Virtualisation- and SDN -Software Defined Network- to support Network Slicing, that is the possibility to allocate, dynamically a set of network resources based on the specific need of a service at that particular time basically creating an on demand network for that connection. Most crucially, this “slicing” can be created under the control and orchestration of the edge (of the service, hypothetically both from the use point, like the app on the smartphone, and from the delivery point, the Cloud hosting the service).

Clearly this is just one possibility, the other is that the Telco Operator keeps the full control and “slice” the network by allocating resources of its own will (and this is what is likely to happen in the first stage but I am convinced the edge approach will take the upper hand, eventually).

We are already seeing companies like Siemens acquiring spectrum rights. Their interest is in the exploitation of two main characteristics of 5G: low latency at the edges and high users density. These two characteristics are of crucial importance in an industrial setting where robots require real time, low latency, interactions and there are plenty of sensors around to be managed concurrently (high users density). In addition, an industry plant is basically using the edge, it does not need (but sporadically) long distance communications. The capability of 5G to be a self standing system in the edge makes it a very interesting local infrastructure (watch the clip).

The evolution and massive adoption of private 5G will decrease equipement price in a virtuous spiral that will accelerate adoption. We can expect that in the next decade there will be plenty of independent -private- 5G edges, of course connected to the public network. Their “contractual power” will -likewise- growing pushing more and more the public network to the role of a dumb pipe, a commodity.

In the next decade 6G will also start its voyage. At that time terminals (smartphones, robot, drones, cars) will be much more powerful and basically they will no longer be “terminals”, rather virtual network nodes that will make use of network resources as well as making available their resources to the network. 6G will be about the possibility to exploit AI and massive distributed processing power (that also stands for possibility to mange broader spectrum frequencies) to create networks on demand. This is the real shift of paradigm, the control moving from Telcos to services with the possibility for service providers and users to create their on demand network in a blink of an eye.

5G is a transition system paving the way to a business revolution and a new asset/architecture for connectivity: big pipes in fibre and Low Orbit Satellites (possibly CubeSats) and an intelligent multi players edge.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the New Initiative Committee and co-chairs the Digital Reality Initiative. He is a member of the IEEE in 2050 Ad Hoc Committee. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.