An ecosystem perspective of the challenges and potential of 5G deployment
December 22, 2021

An ecosystem perspective of the challenges and potential of 5G deployment

In recent years, 5G adoption has been viewed as a race, with the earliest adopters seen as the "winners" — of the biggest business opportunities and the first chances to sell the new technology to customers. But an array of 5G issues and challenges have caused deployment to play out a bit differently than anticipated. Rather than a marathon progressing deterministically toward a finish line, it's been more like a puzzle to be put together piece by piece. To know more about the past and present of 5G technology, read our latest article here

In addition to technological progress, the business and commercial landscape has expanded. New entrants are emerging. Existing players — from cellular service providers (CSPs), cloud network developers, and infrastructure vendors to manufacturers of antennas, chipsets, and modules — interact in new and interesting ways. As relationships between spectrum owners, service providers, and final customers begin to evolve, we present a few critical challenges organizations might face while establishing their 5G deployment strategy. We divide these issues into five broad challenges at an organizational level.   

Challenges of 5G Deployment

Value Chain Coordination: Multiple players across an ecosystem may have to cooperate in implementing a given use case. Many have never collaborated before, but they will need to work together on issues such as agreeing on technical standards. In mobility, for instance, vehicle-to-infrastructure and vehicle-to-vehicle warning systems involve public infrastructure providers, rival automotive manufacturers, connectivity providers, technology players, and equipment manufacturers. All must align on technical standards in the hardware for the system to work—but standards are still evolving, even in the most developed markets.

Use Case Fragmentation: The value at stake from enhanced connectivity is substantial when viewed cumulatively across the entire economy, but it requires aggregating many small pockets of potential across hundreds of use cases and domain participants. Connectivity use cases are not always core priorities for participants, especially those who are not as far along in their digital transformation journey. All of this can contribute to companies taking a “wait-and-see” approach or stalling in never-ending “pilot purgatory.” For example, retailers and manufacturers could benefit from advanced computer vision. Still, the value it could produce may not be significant enough for companies in these sectors to create strong demand for someone to deliver these services right away. In such cases, aggregators may be needed to create enough viable scale in demand. Collaboration with ecosystem partners, especially those who provide cross vertical services on the cloud, like Cloudi-Fi could be critical in developing crucial sectoral competence and market intelligence.

Misaligned Incentives: This is the familiar monetization question. The actor assuming the cost and risk of investment (and doing the heavy lifting of implementation) in a domain may not be the one who captures the ultimate financial gain. In healthcare, for instance, several connectivity-enabled use cases have the potential to increase efficiency and improve health outcomes. But while hospitals and health providers may be the ones to make such investments, train workers, and change their day-to-day operations, the financial benefits may accrue to health insurers. Similarly, consumer internet, media, and advertising companies have long profited from offering “over-the-top” services that run on networks built and maintained by connectivity providers. Still, the providers themselves have struggled to monetize this activity proportionally.

Data Complexity: Many use cases require data sharing across firm and industry boundaries. But standards to ensure privacy, security, ownership, and interoperability are still evolving. Protecting data is paramount for both companies and consumers to guard against ever-evolving risks. In addition, machine-to-machine transmissions (for example, between a hospital’s health informatics system and a patient’s home health monitor, or between equipment in a remote production plant and an operations hub) require interoperability between IoT systems.

Deployment Constraints: Some of the issues holding back progress include physical barriers slowing network enhancement and use case adoption. Connectivity providers and domain users alike may have an extensive legacy asset base that will be expensive to upgrade. Regulatory uncertainty also needs to be resolved around broad issues as well as domain-specific questions in areas such as mobility and healthcare. For connectivity providers, practical constraints like spectrum availability, access rights to public infrastructure, and power density limits are persistent challenges that often have to be overcome locally. Even among commercial customers such as retailers, manufacturers, or wholesalers, adopting connectivity-enabled use cases can be delayed by long capital investment cycles. Many firms have postponed asset upgrades in the past decade due to weak growth and an uncertain investment outlook.

A world of possibilities

In concrete terms, 5G improves existing mobile communications services for the general public, but most importantly, paves the way for new business applications. On paper, speed is multiplied by ten compared to 4G. The increased bandwidth can develop new augmented and virtual reality experiences. Beamforming and network slicing technologies specific to 5G will smart the network infrastructure. Rather than broadcasting a continuous, undistinguished signal over a large area, beamforming will direct the signal to a terminal when it is needed. In a sense, the connection will be on-demand, optimizing energy use and improving signal stability and strength. Factories, warehouses, and airports are already developing solutions adapted to their needs via private 5G networks while waiting to complete national coverage. Four generations have led up to 5G: every ten years or so, each of them multiplied the bandwidth by ten and made new applications possible. And the process won’t end with 5G: while it’s eagerly awaited, the operators are already working on 6G.