[Column] Murat Sahinoglu: The million dollar question about 5G
Experts are all eyeing 5G to open up monetisation opportunities for communication service providers (CSPs) beyond their traditional markets. However, the million dollars question on everyone’s mind is how to capture these opportunities?
Standing above previous generations, 5G will give operators the opportunity to evolve their position in the value chain, playing three distinct roles: “Network Developer,” “Service Enabler,” and “Service Creator.”
These roles allow operators to provide increasing value from 5G network infrastructure, they can provide tailored connectivity solutions through a 5G digital platform for business customers to build their own processes and offers including “massive IoT,” and enable new digital services to collaborate on use cases beyond just communications.
At Ericsson, we believe that by setting the right goals for digital Business Support Systems (BSS), service providers can define new business models to monetize 5G.
As the first company that has launched live commercial 5G networks on four continents and the provider of core solutions that are supporting 2.5 billion subscribers from 2G to 5G, our team at Ericsson has been involved hands on with 5G technology evolution 5G and evaluating use cases of today and tomorrow.
If we look at new stakeholder groups that need to be considered in the 5G/IoT business context, we have four groups:
— Enterprises and industry verticals that require solutions beyond telecoms
— New types of suppliers such as IoT device providers and suppliers of eSIM (embedded SIM) and related technologies
— Platform providers that specialize in specific IoT or edge clusters or groups of use cases such as massive and broadband IoT platforms, industrial IoT platforms and content data networks
— Integrators that specialize in specific verticals such as asset management, mission-critical services or automotive that combine capabilities from multiple stakeholders to address consumer needs.
Looking at the traditional network developer role, a service provider acts solely as a cellular connectivity provider by offering solutions such as radio, core network and communication services while models are consumer focused.
In the service enabler role, the service provider extends its services by incorporating additional capabilities such as cloud/edge and IoT enablement and shifts focus to business customers and industry verticals. The service provider becomes a service enabler for 5G and the IoT, acting as a supplier of connectivity and platform services.
This enables them to establish digital value systems with opportunity to deliver new services all the way up to full IoT solutions, taking on the roles of integrator, distributor or co-seller.
In the service enabler role, the service provider extends its services by incorporating additional capabilities such as cloud/edge and IoT enablement and shifts focus to business customers and industry verticals, acting as a supplier of connectivity and platform services.
To be able to take the role of service enabler, the BSS must be transformed into a system that is able to monetize IoT/5G platforms and edge deployments, which requires significant changes in both the functional and non-functional space, requiring business support systems with further functional extensions.
The stakeholder ecosystem of service creator is significantly more complex, as the customer base broadens to include verticals and the CSP starts offering full solutions beyond telecoms. As a result, BSS for service creators must include extensive and flexible partner relationship management, requiring new monetization models for charging and billing.
For example, multiparty charging, revenue sharing and profit sharing all require extended billing and reconciliation functionality. Concisely, scalability alone is not enough to handle massive amount of devices.
Looking at it from a step-by-step perspective, value chain evolution of BSS capabilities begins with “5G-enabled BSS”—supporting 5G standards and features like virtualization (NFV) and network slicing, while maintaining all of the end-to-end business capabilities. This is also the time to begin the containerization of some subsystems to provide flexibility for scaling.
The next step in BSS is “B2B, IoT, and Edge”— handling devices at IoT scale while supporting new revenue models and billing-on-behalf. This step is focused on supporting enterprise customers.
The final step is “Full IoT Ecosystem,” in which IoT and Edge partners are customers, suppliers, or both at the same time.
Use-case demands the capability to very quickly define, deploy, and adapt new offerings to capture new business opportunities when it comes to 5G. This means BSS will have to provide partners with tools that can request network capabilities, present configuration options, determine prices, and orchestrate the order—all in real time and without human intervention in a step-by-step approach.
In the recent MIT Technology Review Insights report, senior IT and network executives at telecommunications operators worldwide, including the Middle East and Africa have been asked to evaluate how they are preparing for the opportunities and challenges of 5G, and particularly how business model shifts will impact IT, network operations, and business support systems.
To conclude based on our work with operators globally as a provider of both 5G and BSS, a solid recommendation can be a 5G-evolved BSS for a smooth collaboration between connectivity providers, service creators, partners, suppliers and others that results in the efficient creation of attractive and cost-effective services.