Cisco’s 3-Phase Plan for your 5G success
It is generally accepted that revenues for mobile service providers are trending flat to down. A recent ARPU report from Informa provides this picture in detail by country. Some mobile service providers have acquired content services as a way to boost this trend, but they admit that this too will eventually trend to flat again. What is needed is a new business model that goes beyond connectivity and bandwidth. There are a number of studies on digital transformation and 5G in particular that note the services for enterprise are strong growth opportunities between now the 2025 (and beyond). There is an in-depth 2016 report from the European Commission with a catchy title of “Identification and quantification of key socio-economic data to support strategic planning for the introduction of 5G in Europe” that projects a large growth in enterprise business for mobile service providers 5G network services between now and the 2025.
Figure-1: Operator revenue growth opportunity
For brevity, the report focused on only a few key business areas, but one can clearly see from the charts above that enterprise services makes up a very small amount of revenue for mobile service providers, but that it is projected to grow substantially in eight years’ time.
Another interesting study is a 2015 report by the GSMA on 5G opportunity. They discuss the technical requirements for 5G to deliver new services. You’re like familiar with many of these, like ultra-high reliability, ultra-low latency, etc. One thing that jumped out to me is a chart they used (see below) of a basket of “5G” services. They show that approximately 85% of these “5G” services can actually be delivered over existing radio technology if only the right 5G-ready network foundation was in place. This is really good news, because we all know that the most expensive parts of the mobile network is (a) spectrum and (b) radio. The rest of the network is a much smaller piece of overall expense. If you can actually deliver on a majority of 5G services without the expense of new radio (and hence gaining great value from your existing radio investment) that’s great news. Now you can be far more pragmatic with you planning.
Figure-2: 2015 GSMA Report on 5G Services
So, back to discussing the right network foundation. By “right network foundation”, we are talking about advanced automation and virtualized functionality. This includes network slicing over a distributed architecture that includes edge computing and the ability to place what resources are needed, where needed, and when needed. This is about the right time to pause and explain what 5G is from a Cisco point of view. Quite simply, the Cisco Open Network Architecture (ONA) forms an enablement platform for innovative services and applications. It is our unifying network fabric that simplifies this through advanced end-to-end automation.
So by now you are likely thinking, “OK Dan , that sounds nice and all, but how does a mobile service provider get from where they are today to this lovely Unified Enablement Platform and enterprise services nirvana? And how is this economically feasible?” I’m so glad that you asked. Cisco also takes a very pragmatic view of digital transformation and 5G. We believe it is advantageous to squeeze as much business potential out of any network investment as possible.
At Mobile World Congress 2017 in Barcelona, Cisco unveiled our 3-Phase Plan to your 5G success. The three phases are:
- Assess and build foundation
- Launch new 5G services
- Advance to 5G standards (once ratified)
Phase-1: Assess and Build
Cisco Services will work with the mobile service provider and create a complete 5G network assessment. This includes a present state model (of network and business) and a future state model (where you want to be and what they looks like). Once agreed upon, we transform the network into a 5G ready Unified Enablement Platform. This platform will leverage industry leading distributed virtualized network and service functions.
Phase-2: Deploy new 5G service (over existing radio)
Your network is now agile and operations simplified with advanced end-to-end automation and orchestration. You choose the service you wish to introduce, the orchestration creates the network slice and assembles the required building blocks to deliver the specific requirements and meet SLAs.
Phase-3: Advance to standard based 5G
Once 5G standards are actually ratified and standard-based technology is delivered, you already have the rest of your network in place and the rest can be added in a less disruptive manner. Additionally since you already have been delivering a majority of 5G services, you can have a more pragmatic approach to what and where you really need to add the 5G radios.
There are many benefits of the 3-Phase Plan beyond the most obvious – that you can sell 5G services well before 5G is ratified. The 5G ready Unified Enablement Platform is highly efficient and you can expect significant cost savings:
- Up to 52% TCO savings for IP Transport network using Cisco CloudScale programmable technologies and segment routing
- Up to 53% TCO by implementing the virtualized and distributed packet core (Ultra Services Platform)
- Over 70% operational efficiencies through our advanced automation and orchestration
- And you gain millisecond granularity through our telemetry and analytics
Cisco understands that transforming your business and network to take advantage of the digital transformation and 5G is difficult. But we have the expertise and leadership in IP infrastructure, Platforms and Automation. We are development leaders in our industry and we can help you deliver new 5G services today. And very importantly is that Cisco is uniquely positioned to help connected the service provider with enterprise customers and vertical opportunities. Like you we take a pragmatic view of this 5G transformation and can help the mobile service provider gain the most out of the digital transformation and 5G.
You can learn more about our 5G ready Unified Enablement Platform.