In 2019, the telecommunication companies are fine-tuning 5G technologies before its launch. These companies are now looking towards creating business models and making investments into the technology so that they could monetize 5G and other opportunities.
5G or the 5th generation mobile network is an evolution of the existing 4G network. The need for the 5G network came into the picture with an increase in data as well as connectivity requirements in the society. 5G was designed to meet the increasing data requirement, IoT with multiple connected devices and support future innovation. Before completely switching into 5G technology, it would be used along with the existing 4G technology to offer a continuous connection. The 5G and 4G networks, along with central and local servers, would help in delivering faster web-based content to the users.
The biggest advantage of the 5G network is that it not only provides faster connection but also reduces the latency time to respond through the wireless network.
The three biggest advantage of using a 5G network is that it has the potential to connect billions of devices without human intervention. The network would have ultra-reliable low latency communications and would provide faster communication and data speed along with the greater potential to connect the world.
By the time the 5G network is made available to the customers, there would be a significant source of revenue both from the fixed broadband network and B2B fronts. Apart from these, these telecommunication service providers would be able to generate revenues via smart cities, connected homes as well as IoT.
In this regard, the major challenges that these companies might face would be in rearranging the business and the revenue models which would enable a number of new services to be provided by these companies keeping in mind the key objective of streamlining the processes to match the expected growth of workload in the future.
Emerging Trends in The Telecom Industry In 2019:
- Adoption of Cloud: The telecommunication companies are now taking advantage of the cloud in order to virtualize the network, acquaint with innovation and simultaneously grab IoT opportunities. This could be attained when these telecommunication companies would start investing in the cloud platform and begin offering new services to their clients.
- Blockchain: The advantage of Blockchain is known to most of the telecommunication companies and its adoption would influence the core management system and services. It would help in gaining efficiency and at the same time, help in revenue growth. Through the adoption of blockchain, these telecom companies would be able to reduce fraudulent activities on the network and can open up new revenue sources by providing eSIM ‘identity-as-a-service’ type services.
- 5G Adoption: Sectors like healthcare, energy, agriculture, manufacturing are all poised to grab the opportunity from 5G networks. The increasing need and demand for the 5G network would help these telecom companies to enter into a partnership with the companies belonging to other sectors.
- The adoption of the 5G network is a source of a wide range of opportunities starting from machine to machine service to remote healthcare and services related to the transfer of innovative videos.
There is no doubt that the 5G network, accompanied by its features, is capable of replacing fixed-line broadband services in Australia. However, it is possible only with a huge amount of investments. Sources say that the rollout of 5G technology requires approximately $2.7 trillion investment by 2020. The amount is based on the estimated investment required to upgrade infrastructure. A significant amount would be spent on IoT integration and IoT hardware implementation as well as IoT services.
In case the customer’s requirement is mitigated with the existing network, it would be quite difficult for the companies to justify the huge investment into the 5G network. With time and requirement for the 5G network, there would be 5G rollout. However, in the current scenario, why would there be a need to replace the existing technology with the new technology if all the requirements are fulfilled.
Recently on 30 August 2019, NBN Co lowered the number of customers which it expected to sign up for the broadband network based on the weaker demand for the network. NBN also highlighted in its recent corporate plan that it had reduced its expected activation rates by half a million households. By activation rate, it means the rate at which the families select to switch from ADSL network to fibre broadband network. This has resulted in Telstra reviewing its guidance. It is because, in most of the cases, Telstra owns the legacy copper network. The most likely scenario will be that the company loses its wholesale customers in the event that these households switch to the NBN.
Many customers in Australia, as a result of migration, are switching towards mobile alternatives. The mobile 4G technology applies bands of radio spectrum that do not support traffic which the NBN’s underground fibre optic cables are capable of doing.
Once the 5G technology comes into the picture, it would support more traffic at a much greater speed, which is comparable to that of fixed broadband service. The users of 5G technology would be able to reduce the time of downloading a file, which would get a much better experience. But there would be a need for small cell antennae close to each other as the range would decline as compared to the 4G network. The small cell antennae would be placed closed to each other to avoid any dropouts.
Also, the introduction of 5G network would require the complete replacement for the fixed-line broadband. In most of the big cities across the world, 5G is being set specifically where there is a need for a large amount of data during a specific time frame and in a particular part of the city.
Many telecommunication companies in Australia are taking up fixed wireless broadband using the 4G and 5G spectrum as a substitute for NBN. NBN is also required to pay Telstra Corporation Limited (ASX: TLS) for the loss of its customers to the network.
In Australia, the fixed-line network experiences more than 90% internet traffic and would require a huge investment in the near future as a major portion of its network uses Telstra’s old copper lines, while there is a need for its replacement with the fiber-optic cable.
5G Network in Australia
5G services have been made available in selected regions of Australia. The customers of Telstra can access the 5G network via 5G smart phones. The company has also entered into a partnership with various leading 5G smartphone manufacturers of the world. This would enable the customer to access various 5G networks before any other mobile operator in Australia. Telstra’s 5G rollout was aimed with the purpose of bringing technology in the regions where it matters the most.
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