Introduction of 5G
With the introduction of 5G, there will be a number of changes or upgrades in the product or service offerings of the communications industry for consumers. Most services will soon be provided through platforms, as most communications service providers have plans to shift to the platform model to monetize 5G services effectively. The services will be classified into three categories, namely, enhanced mobile broadband, massive machine-type communications, and ultra-reliable and low-latency communications, with these categories spanning enhanced consumer applications relating to improved indoor and outdoor broadband, augmented reality, virtual reality, ultra HD video, Internet of Things (IoT), remote monitoring, smart homes, telehealth, and remote patient monitoring. Consumer proposition launches will start from fixed wireless access and progress to consumer IoT, and mHealth and mPayments will be monetized by telecommunications companies. Finally, there will be a shift of power from content creators to content distributors.
PROVISION OF CONSUMER SERVICES THROUGH PLATFORMS
TM Forum, a global industry association that advances the digital transformation of the communications sector, expects that with the introduction of 5G, consumer services in the communications industry will mostly be provided through platforms. Based on its survey of 61 telecommunications professionals from 52 organizations around the world, most communications service providers and suppliers agree that the trend is to think beyond connectivity and view networks as platforms on which real-world applications can be built. To prepare for the introduction of 5G, communications service providers (e.g., mobile operators, fixed operators, and cable operators) and suppliers (e.g., systems integrators and hardware suppliers) are turning to the flexibility that multi-tenant platforms offer. They believe that these platforms and network slicing will enable the effective management and monetization of 5G services with varying network requirements.
With a platform strategy, communications service providers and suppliers can offer a broad range of 5G consumer services relating to ultra HD video, connected cars, improved mobile broadband coverage, fixed wireless coverage, tactile internet, digital health, and remote control of devices such as drones. According to communications service providers, the 5G consumer applications most suited to the platform business model are ultra HD video (39%), connected cars (27%), improved mobile broadband coverage (27%), fixed wireless coverage (27%), and tactile internet (21%). For suppliers, on the other hand, the most suitable 5G consumer applications are connected cars (65%), ultra HD video (38%), digital health (35%), improved mobile broadband coverage (31%), and fixed wireless coverage (19%). There are several other suitable 5G applications, including smart cities, smart grids, and factory automation, but organizations, not consumers, are often the target of these services.
SDX Central notes that while 5G offers consumers benefits in the form of much faster Internet speeds, it largely serves as an enabler for enterprises in certain industry verticals.
CLASSIFICATION OF CONSUMER SERVICES INTO THREE CATEGORIES
According to the International Telecommunications Union, "the high speeds and low latency promised by 5G will propel societies into a new age of smart cities and the Internet of Things (IoT)." 5G networks have numerous potential use cases, and these use cases can be categorized into enhanced mobile broadband (eMBB), massive machine-type communications (mMTC), and ultra-reliable and low-latency communications (URLLC). Examples of 5G consumer applications in the eMBB category include improved indoor and outdoor broadband, augmented reality, virtual reality, and ultra HD video, while examples of 5G consumer applications in the mMTC category include the IoT, remote monitoring, and smart homes. Examples of 5G consumer applications in the URLLC category, on the other hand, include autonomous vehicles, telehealth, and remote patient monitoring. At the intersection of these categories are voice-assisted technologies.
Gartner's survey reveals that the most common use cases of 5G will likely be IoT communications and video. Fifty-nine percent of the organizations polled expect 5G will be used for IoT communications, while 53% expect 5G will be used for video. Analysys Mason, on the other hand, reports that the introduction of 5G will result in a lift in the consumer service revenue of communications service providers, as revenues from the improved mobile broadband service, consumer IoT, and augmented and virtual reality are likely to grow.
PROGRESSION OF LAUNCHES FROM FIXED WIRELESS ACCESS TO CONSUMER IOT
Based on a report by Ovum Consulting, 5G consumer proposition launches are likely to progress from fixed wireless access in 2019 to consumer IoT in 2021-2022. Pricing for fixed wireless access and mobile hotspots, which are expected to be launched in 2019, will likely involve speed-based tiers similar to current fixed broadband plans for fixed wireless access and mobile-like pricing for mobile hotspots. Meanwhile, pricing for portable devices, personal computers, and tablets, which are expected to be launched in 2019-2020, will likely involve service bundles. Smartphones will likely be launched in 2019-2020, with pricing involving content bundling and subscriptions. Consumer IoT is likely the last to be launched, and the launch may be sometime in 2021-2022.
MONETIZATION OF MHEALTH AND MPAYMENTS BY TELECOMMUNICATIONS PROVIDERS
Deloitte recently reported the likelihood of telecommunications companies monetizing mHealth and mPayments. Operators in the telecommunications industry have the opportunity to take advantage of the rising number of subscribers using health-related wearables by offering services tailored to these subscribers. The operators can also provide integration services for mobile payment methods and customer identity management. One study projected that this mPayments strategy can enable telecommunications providers to grow their mobile payments revenue to four times its current size.
SHIFT OF POWER FROM CONTENT CREATORS TO CONTENT DISTRIBUTORS
The introduction of 5G will tilt the power back to content distribution, according to an article published by Forbes. Content creators and owners have so far enjoyed favorable profits and margins because of low distribution costs, but now that 5G is being introduced, a power shift is expected to take place. 5G service providers will soon be in the best position to distribute content, and content creators will have to adjust. It is also expected that cable broadband providers will partner with or be acquired by 5G network providers, as these 5G network providers will have "plenty of market power." 5G is projected to bring audiences and content closer through immersive and tactile interactive experiences and through fundamental changes in video, gaming, virtual reality, and augmented reality content.