The idea of the innovator’s dilemma comes from Harvard professor Clayton Christensen who argues that successful companies can do everything right but still lose market leadership when unexpected competitors emerge, disrupt, and take over markets. As an antidote, he advises that leading companies engage in disruptive innovation, a concept that is at the heart of how the modern telecom industry reinvents itself.
Mobile wireless technologies have gone through systematic generational refreshes over the last three decades. The next such refresh, called 5G for fifth generation, isn’t just an incremental upgrade from 4G, but represents a significant leap forward. 5G promises to improve efficiency, enhance security, cut latency times, increase network capacity, and accelerate current data connections by 10, or even 100 times. And for the first time, 5G brings wireline technologies into greater prominence and convergence with wireless infrastructure, enabling telecom carriers to extract efficiency from their full network.
At this year’s Consumer Electronics Show, Samsung’s Tim Baxter said, “5G will put fiber into your pocket,” and Verizon CTO Hans Vestberg claimed that 5G “will transform industries and societies.”
So, When Can I Get It?
2017 was a proof-of-concept year for 5G. Both Verizon and AT&T have announced plans to begin 5G delivery to a limited number of customers in select cities in late 2018 or early 2019. In 2019, Qualcomm is scheduled to deliver its first 5G-compatible smartphone chipsets. Vodafone and Huawei recently demonstrated the “first 5G voice call.” 5G phones, consumer apps, and other devices are expected to emerge in tandem. Major industry leaders like Intel are building 5G showcases, e.g., at the 2018 Olympic Winter Games in PyeongChang.
“5G will be a transformative technology,” says Shekar Ayyar, general manager of VMware’s telco NFV group and executive vice president of strategy and corporate development. “It reminds me of the early days of the Internet because the potential for innovation and improvement in cost efficiency is vast.”
Working out the Kinks
5G is tantalizing for both consumers and businesses because of its potential to meaningfully increase bandwidth, speed, and scale. However, before the benefits of 5G can be widely exploited, service providers need to invest in virtualized and cloud-based infrastructure. 5G requires both a software-driven architecture and what is known as network functions virtualization, or NFV, to be successful.
NFV is a new approach that decouples network functions—core ones such as IP Multimedia systems (IMS), Evolved Packet Core (EPC), as well as functions like firewalling, intrusion detection, and domain name service (DNS)—from proprietary hardware appliances and enables them to run in software. More than an infrastructure upgrade, this telecom transformation represents a new approach to delivering agile services and enables the ability to have these services move between clouds.
“There’s an enormous opportunity for telcos as 5G emerges to become next generation cloud leaders” says Ayyar. “Over the past decade, new companies have built businesses leveraging the underlying telecommunications infrastructure to their benefit while the communications service providers (CSPs) have had to content themselves with providing the pipes and plumbing. The big opportunity and challenge for CSPs is to leverage the benefits of 5G with new business models to reassert their influence in the cloud economy.”
For example, one key aspect of 5G networks—known as network slicing—is the ability to divide and scale the network on an as-a-service and “on demand” basis. This requires an advanced, software-defined infrastructure to execute. In addition, network slicing requires coordination between operators who must share available spectrum globally. This represents an increased level of industry coordination that still needs to be sorted out.
In summary, 2018 looks to be a year for the telecom industry to sort network collaboration issues, align on common standards, extend existing pilot deployments, and invest in infrastructure virtualization with an eye toward an immediate 5G future.
What Will Change?
5G promises massive change because it creates a larger, more efficient network that offers new possibilities for developers.
“What will definitely improve is the user experience for multiplayer video games or virtual and augmented reality apps,” says Ayyar. “Today, these are very compute-intensive tasks that basically require you to strap a mainframe to your back. 5G increases the amount of bandwidth transmitted over wireless, allowing virtual and augmented reality apps to run with little or no latency. With 5G, those computing tasks can be divided up and executed more efficiently on the network using micro-data centers, network slicing, and access to network resources in the form of virtual functions.”
The collaborative nature of 5G may also prompt more partnering across the ecosystem and alter the competitive landscape of the industry. Hybrid environments that leverage the best of both worlds, coupling hyperscale public cloud infrastructures like those from Amazon Web Services or IBM, and the NFV enhanced clouds from Telecom companies, could become the basis for new marketplaces for consumer and enterprise applications and tools.
“I’m confident that when 5G deployments are ready, we’ll have numerous applications we haven’t even thought of today,” says Ayyar.