The Vault

TelecomTV's 2018 5G Evolved and Defined Survey
White Paper / Oct 2018 / 5G

Originally conducted in the Spring of 2018, The TelecomTV 5G EVOLVED AND DEFINED survey highlights to what extent CSP/telco opinions depart from those of Network Equipment Providers (NEPs) and software vendors.  The results underline major findings found by splitting respondents into two groups to compare side-by-side. 

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1All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 2All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. WELCOME TO THE RESULTS OF TELECOMTV’S 2018 5G EVOLVED AND DEFINED SURVEY Sponsored by InterDigital We asked our readers and viewers to answer 16 quick questions on 5G and this is the result. One of the interesting things we thought might be highlighted by this 5G survey was to what extent CSP/telco opinions depart from those of Network Equipment Providers (NEPs) and software vendors (collectively referred to as ‘vendors’ in our narrative), both the operators’ traditional infrastructure suppliers and newcomer software and technology vendors. Our starting assumption, from various discussions and interviews, was that vendors are often more bullish about 5G than operators tend to be - and for fairly obvious reasons. Like lions waiting on the Masai Mara for wildebeest to pass by, vendors want operators to hurry up and get migrating - they’re hungry. On the other side, many CSP/telco executives are also highly bullish about the prospects for 5G, but in moments of candour they can be circumspect about some of the more extravagant claims being made for it. After all, they will be holding the can if they ‘build it and nobody comes’, to invert the old saying. For and against The prospects for 5G are contentious and, if anything, getting more so. For every report that champions the 5G effort, there’s one that casts doubt on the whole project in terms of its cost and complexity; on how willing users will be to buy faster, more reliable services, and so on. Operators themselves keep agitating for more ‘pro-mobile’ terms and conditions around investment, spectrum allocation and competition, often without apparent success. Given these factors there’s little wonder that the 5G ecosystem feels compelled to respond to setbacks with even more hype about 5G’s future prospects. It’s beyond the scope of this survey to attempt to determine how successful or otherwise 5G will be, and over what timescale. But what we can do is chart the sentiment amongst 5G stakeholders - our readers and viewers - as it stands at the moment and how it has evolved. The fact is that what we call 5G is very much an ecosystem - more so than in the previous generational iterations. Because of 5G’s openness and sheer breadth, it’s become a complex organism with many parts drawn from both IT and networking industries. Within this, we have consultants, analysts and researchers, academics, politicians, and standards bodies; system integrators, equipment and software vendors; service, content, cloud and application providers; network operators and much more, as well as end users. All are ‘feeding in’ to the collective effort on the assumption that 5G will, at some point, ‘feedback’ to make it all worthwhile. As this plays out, those in one part of the ecosystem need to know that the other parts at least share the same level of 5G enthusiasm. 3All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. Feeding opinion back to the ecosystem That’s why we think opinion surveys like this are an important component in the information mix. As well as charting opinions as they stand now, we’ll be making two sets of comparisons around the survey results. First, where the differences look interesting, we will compare the CSP/telco cohort of respondents against the collective scoring for that question, seeking to understand how opinions in the telco sector differ from the rest and, perhaps, why. Where the differences are instructive, we’ll compare this year’s scores to those of last year’s 5G survey, 5G Evolution: the Road to Utopia. To conclude our survey analysis and to highlight our major findings we have split respondents into two groups to compare them side-by-side: CSPs/telcos form one group and all the vendor categories - Independent software vendor; Systems integrator; Network equipment vendor - are added together to form the other. The objective will be to assess the differences between the two groups on five key questions. That data will illuminate our major findings and form the conclusions to this report. Note: in the interests of avoiding fussiness, we’ve rounded up or down the percentages used to the nearest integer, and in our analysis, where we’re referring to choices collectively made by the survey respondents, we’ll italicise them, e.g., Watching Developments. On with the show... 4All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. SURVEY RESULTS 01. WHAT TYPE OF ORGANIZATION DO YOU REPRESENT? Almost exactly a third of our respondents identified as Network operators/Service providers plus Service provider/ CSPs. Those who supplied them with hardware and software comprised 27% of our sample. Making a strong showing this time out were Research and Laboratory organisations, whose members supplied 14% of our respondents. 02. WHAT STAGE ARE YOU AT WITH REGARDS TO 5G-RELATED INFRASTRUCTURE AND TECHNOLOGY? The most popular answer here was Watching developments (42%); with Planning stage at 36% and Working with telcos on trials at 38%. At first sight, this looks like a rather lukewarm response, but many respondents may not be intimately involved in 5G infrastructure and technology right now. Those Not considering are only 6%. When it comes telco/CSP respondents, however, the planning figure leaps right up to 61%, with only around 6% Not considering 5G at this time. Last year the Planning stage had been reached by only 17% of all respondents. This implies what we might expect. With 5G NR non-standalone now on the near horizon, planning has become a serious activity. Things are definitely moving on. 0% Watching developments Planning stage Involved in standards development Producing “pre-standards” equipment for trials Working with telcos on trials Not considering at this time 5% 10% 25%15% 30%20% 35% 40% 45% 42 11 36 38 23 6 0% Association/Standards Body Network Operator/Service Provider Network Equipment Vendor Test Equipment Vendor Independent Software Vendor Service Provider/Telco/CSP Systems Integrator Research & Development, University, Gov’t Lab, Testbed/Pilot Deployment site Other (please specify) 5% 10% 15% 20% 25% 1 2 25 7 20 8 9 14 15 5All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 03. WHICH OF THE FOLLOWING ARE THE KEY BENEFITS OF 5G TO THE SERVICE PROVIDERS? As an early part of any 5G presentation will tell you, 5G is not your Dad’s mobile standard. It’s a whole new approach aimed at putting telcos back in the market for services and network applications. 5G will eventually enable telcos to sell assured business services which can be tailored to suit different ‘vertical’ industry segments. By doing so, they can avoid becoming mere commodity bit-pushers, the theory goes. So how far has this idea really taken root in the wider 5G ecosystem? Greater collaboration with verticals on business applications is chosen as one of three key benefits by 44% of our respondents and Faster deployment of new services gets support from 38%. But crunchy technical advantages seem to be prized more highly - Reduced latency is valued by 60% and Speed across the network by 38%. Enhanced wireless broadband gets high marks too. Obviously, better performing networks are a prerequisite for delivering high-value services to verticals, so sensing that most benefit comes from low latency, for instance, doesn’t necessarily imply a downgrade for vertical collaboration. However, our telco/CSP respondents are even less impressed by vertical market opportunities: for them, Speed (45%), Latency (58%) and Better wireless broadband (58%) get the most support. Collaboration with verticals only gets 39%. Meanwhile, Increased ARPU, surprisingly, got only 13%. Taken together, this implies that the importance of the oft-mentioned opportunity to tap verticals with new services (and to displace the OTTs) with 5G is being viewed with some skepticism by many in the 5G ecosystem, at least in the short term. 04. WHICH PARTS OF YOUR ORGANIZATION ARE THE MOST FOCUSED ON 5G? The overall score including network equipment vendors produces a healthy lead for R&D. The scoring for telco/ CSPs-only puts CTO/Planning way out ahead with 76%. R&D is on 48% and Operations and Products and Marketing have around 30% each. 0% Increased ARPU Increased speed across the network Reduced latency Enhanced wireless broadband Connection density Reduced costs Faster deployment of new services Greater collaboration with verticals on business applications Assistance with the transformation to a digital business 10% 20% 40%30% 50% 60% 70% 13 53 38 25 60 44 38 38 27 0% Products and Marketing Operations R&D CTO/Planning 10% 20% 30% 40% 70%50% 60% 34 21 62 51 PICKED BY % OF RESPONDENTS PICKED BY % OF RESPONDENTS 6All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 05. HOW IMPORTANT IS NFV TO 5G NETWORKS? A general awareness that NFV will play a crucial role in the implementation of what we’re now starting to call “full” 5G - that’s 5G driven at high frequencies and tackling new applications using network slicing in particular - seems to be taking hold. Nearly all respondents think it’s Important or Very Important, while 9% Don’t know. Telco/CSP respondents were even more certain: 82% think it’s Very important, 12% just Important and nobody thinks it Not important. This is a steady improvement over last year, where 53% plumped for Very Important, 29% said Important and 14% Didn’t know. Not dramatic, but heading in the right direction. 06. HOW IMPORTANT IS SDN? A very similar result to NFV and, again, a marked increase in importance when we look at telco/CSP respondents in isolation. A strong advance on last year’s answers, which were Very Important at 48%; Important at 36% and Don’t Know at 13%. 07. WHAT IS THE ROLE OF OPEN SOURCE IN THE TRANSFORMATION OF INFRASTRUCTURE TO SUPPORT 5G? Here opinions were more nuanced, with the highest score going to Important at 43% and Very Important scoring slightly less at 37%. Logic suggests that traditional Network Equipment Vendors might look on Open Source less fondly than other categories of respondent. When split out, telco/CSPs came down in favour of Very important (42%) and Important (33%); this could suggest that Open Source is increasingly accepted within telcos, whereas just 4 or 5 years ago it was often treated with suspicion and hostility. However, there doesn’t appear to be any major change from last year when 40% deemed it Very Important and 39% Important. Don’t know Not very important Important Very important 0% 10% 20% 30% 40% 70%50% 60% Don’t know Not very important Important Very important 0% 10% 20% 30% 40% 70%50% 60% 9 5 63 62 26 29 2 4 Don’t know Not very important Important Very important 0% 10% 20% 30% 40% 50% 11 37 43 9 7All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 08. WHAT FIVE 5G SERVICES ARE YOU FOCUSED ON DELIVERING FIRST? With this question, we asked respondents to independently name the services they were targeting - supplying answers on a pull-down has the disadvantage of limiting the possible responses because, after all, we might be missing some upcoming and important ones if we defined the range in advance. IoT was the top choice - way out ahead of all the others at 32% of all the answers. Next came Services at 16%; then Video and Broadband, both at 11%, Enhanced Mobile Broadband picked up 9% of mentions, Low latency 7%. The 4% categories were: Fixed wireless, eHealth and Manufacturing The 3% categories were: Testing, Automation and High-speed services The 2% categories were: Content, Devices, Virtual reality, Utilities and Backhaul In fact, there were no real surprises here, except perhaps Fixed wireless, which I would have thought could be more highly placed, and perhaps eHealth. 09. ARE YOUR INITIAL 5G OFFERINGS CONSUMER OR ENTERPRISE FOCUSED? More respondents opted for enterprise focus ahead of customer focus, but nearly half implied both were of equal importance in terms of initial offerings. Interestingly, telcos also came down heavily on both, but twice as many chose Consumer (24%) over Enterprise (12%). 10. DO YOU EXPECT 5G TO INCREASE YOUR ENTERPRISE REVENUES? The industry overall expects 5G to Increase enterprise revenue - emphatically so, by 39%. The telco contingent was slightly less certain - 36% thought Yes, but considerably more of them (45%) thought Probably. None of them Consumer and Enterprise focused Enterprise focused Consumer focused 0% 10% 20% 30% 40% 50% I don’t know Not at all Not much Probably Yes 0% 10%5% 20%15% 25% 30% 35% 40% 9 6 18 37 39 27 9 46 9 8All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 11. WHICH INDUSTRY SEGMENTS DO YOU THINK HAVE THE MOST POTENTIAL FOR CSPS TO TARGET WITH THE CAPABILITIES THAT 5G OFFERS? The Automotive market for services was the clear favourite for both last year and this. This year, our Telco voters were much more enthused by the Utility sector than were respondents overall. 48% of telco respondents made utilities their second choice after Automotive, while the total vote implied that utilities were less important than Manufacturing, Healthcare and Media/Gaming. 0% Retail Heavy Equipment / Construction Agriculture Transportation (other than automotive) Healthcare Media/Gaming Manufacturing Utilities Financial Services Public Safety Automotive 10% 20% 40%30% 50% 60% 70% 20 38 38 17 38 42 35 37 70 16 9 9All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 12. WHAT ARE THE MOST COMMON USE CASES IN EACH OF THESE VERTICALS? Automotive Utilities Healthcare Manufacturing Media/Gaming Self-driving cars Connected cars Car infotainment Insurance Vehicle tracking Navigation Vehicle safety Smart metering Smart grid Remote sensors (IoT) Remote measurement and control Augmented and Virtual Reality (AR/VR) Wearables Telemedicine Online patient data Remote surgery Remote patient monitoring Low latency image analysis Real-time tracking and monitoring Robotics IoT Factory automation/smart factories Real-time preventative maintenance Inventory management Fixed wireless Edge computing 4K video streaming Real-time gaming AR/VR Live broadcasting Prioritised network slicing Public Safety Transport (other than automotive) Agriculture Heavy Equipment/ Construction Retail Emergency services Enhanced mobile broadband Video surveillance Traffic monitoring and management Drones Face recognition AR Team collaboration Traffic management Integrated transport network Smart buses Rail connectivity Asset tracking Fleet management AR/VR Container management and logistics Smart farms Connected livestock Smart metering Smart crop management Food security Smart irrigation Drone inspection Farm equipment connectivity Security Automation Preventative maintenance Remote operations Route planning Smart mining Safety Logistics Just-in-time delivery Auto delivery AI-based fraud prevention Online shopping Personalised shopping experiences Supply chain optimisation Electronic payments AR/VR 10All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 13. HOW IMPORTANT WILL ENTERPRISE NETWORKS AND ADJACENT VERTICALS BE FOR 5G? 5G networks and underlying technology are formulated to be much more open than previous generations, both in terms of the networks themselves and, by extension, the business models that might be deployed with them. Many observers expect small and indoor cell technology, deployed and operated by enterprises or ‘neutral third-party’ operators, will be an important part of the mix. How important? Very important and Important, according to the vast majority of our respondents. Telcos were even more sure about Enterprises and Adjacent verticals, with 61% marking them Very important and 30% Important. 14. WHICH OF THE FOLLOWING TYPES OF ORGANIZATION ARE THE BEST PARTNERS FOR 5G IMPLEMENTATION? Traditional telecoms network equipment providers (NEPs) are not the pick of the industry as a whole for telco 5G assistance. When asked ‘Which of the following types of organisation are the best partners for 5G implementation?’, only 35% of our respondents plumped for NEPs, instead indicating that Integrators (41%) and IT Players (24%) will get most of the business. However, respondents within the telcos themselves have a slightly different view. They tie Existing NEPs and System integrators in first place at 39%; IT Players get the thumbs up with only 21%. It could be that NEPs, IT Players and Systems Integrators essentially cancel each other out by voting for themselves. Filtering out the telco vote returns a slightly different result but not all that divergent from the general score. With telcos only, NEPs get an uplift of around 5 points to 40%, at the expense of IT Players who experience a 4-point drop. Don’t know Not very important Important Very important 0% 10% 20% 30% 40% 50% 60% 6 51 39 4 System Integrators IT Players Existing NEPs 0% 10% 20% 40%30% 45%35%25%15%5% 41 35 24 11All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 15. WHICH OF THE FOLLOWING ARE THE MAJOR OBSTACLES TO 5G FACING YOUR ORGANIZATION? When it comes to the obstacles that our respondents thought most likely to thwart 5G success, 43% suspended judgement, claiming it was Too soon to know what the real benefits will be; 51% were worried by the Lack of a mature ecosystem; a Lack of use cases was mentioned by 30% of the respondents, and this was followed fairly closely by Lack of applications at 23%. 16. WHEN DO YOU THINK 5G WILL REALLY HAVE A BUSINESS IMPACT ON EACH OF THESE SECTORS? Strangely, for every sector listed here, the breakout year was deemed by our respondents to be 2020. The only slight outlier was Media/Gaming, which will start to really take off (according to 21% of our respondents) next year. 0% Lack of applications Lack of use cases Inappropriate IT infrastructure Concerns around data security and privacy Lack of a mature ecosystem Senior stakeholder buy-in/concerns Lack of budget/investment We have not been able to exploit all of the opportunity for the current generation mobile network 10% 20% 40%30% 50% 60% Too soon to know what the real benefits will be Automotive Utilities Public Safety Manufacturing Healthcare Financial Services Media/Gaming 2018 2019 2020 2021 2022 Beyond 23 25 51 18 16 43 30 7 31 12All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. MAJOR FINDINGS AND CONCLUSION WITH 5G, ARE WE SEEING VENDOR PUSH OR TELCO PULL? Specific results in our survey indicate that - at least at this stage in the migration towards 5G - telcos are more pushed than pulling. They are under pressure, not just from vendors and users, but also from governments and pressure groups urging the speedy adoption of 5G as a matter of national pride. In many cases, 5G is being presented as a ‘race’ to be won rather than a carefully choreographed technology upgrade to be negotiated. We detected interesting attitudinal differences between those identifying as vendors and those who identified as network operator/service providers on 5 questions in particular: 17. ARE YOUR INITIAL 5G OFFERINGS CONSUMER OR ENTERPRISE FOCUSED? Enterprise-focused offerings get a big thumbs up from vendors; telcos not so much. This difference is a sign that vendors are messaging hard on the value of tapping vertical industry segments (enterprise market included) with 5G and its advanced IoT and low latency services. Telcos on the other hand are looking at the immediate prize - a better consumer mobile broadband experience. 5 10 42 55 45 12 0% Consumer focused Consumer focused Enterprise focused Enterprise focused None of them Consumer and Enterprise focused None of them Consumer and Enterprise focused 10% 20% 40%30% 50% 60% CSPs Vendors 8 24 13All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 18. DO YOU EXPECT 5G TO INCREASE YOUR ENTERPRISE REVENUES? To reinforce the message above vendor respondents were emphatic that 5G would increase enterprise revenues while half of the telco respondents could only muster a ‘Probably’. Telcos were also twice as likely to respond with ‘Not at all’ to the question. 19. WHICH INDUSTRY SEGMENTS DO YOU THINK HAVE THE MOST POTENTIAL FOR CSPS TO TARGET WITH THE CAPABILITIES THAT 5G OFFERS? Automotive is the winner for both CSPs and vendors, but with CSPs markedly less enthusiastic. They prefer Utilities much more than vendors do. 3 5 7 7 8 7 34 45 Yes Yes Probably Probably Not at all I don’t know Not much Not at all I don’t know Not much 0% 10% 20% 40%30% 50% 60% 50 36 33 39 32 34 45 37 21 11 21 32 48 Automotive Automotive Utilities Utilities Manufacturing Healthcare Public Safety Financial services Financial services Media/Gaming Media/Gaming Transportation Transportation Agriculture Agriculture Heavy Equipment/construction Heavy Equipment/construction Retail Retail Public Safety Manufacturing Healthcare 0% 10% 20% 40%30% 50% 60% 82 67 36 21 39 36 12 12 15 42 34 70% 80% 90% CSPs Vendors CSPs Vendors 14All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. 20. HOW IMPORTANT IS NFV TO 5G NETWORKS? There’s a major disparity here on the importance of NFV to 5G. Bear in mind that traditional telco vendors are not necessarily the recipients of NFV revenue, and so may be slightly jaundiced against its importance. And it’s also true that in the early stages of 5G, NFV and network slicing will not be a requirement. However, telcos themselves don’t hold back. Over 80% of them rate it Very important, an overwhelming endorsement. Only 58% of vendors do the same. 21. WHAT IS THE ROLE OF OPEN SOURCE IN THE TRANSFORMATION OF INFRASTRUCTURE TO SUPPORT 5G? Open source is seen as ‘Very important’ by 42% of CSPs but just ‘Important’ (interpretation: ‘let’s not get too carried away’) by 55% of vendors. This is understandable. Some vendors are full-on open source enthusiasts, but many are still slightly reluctant adherents in that they understand that there’s an important, perhaps pivotal, place for open source solutions in the grand telco scheme of things. At the same time, they have invested in proprietary solutions for specific roles and functions and may argue that there are still many circumstances in which proprietary software and non-virtualized approaches will work best for telcos. Overstating the importance of open source software might be seen as halfway to declaring ‘proprietary bad; open source good’. Not something vendors want to endorse. 5 7 37 12 Very important Very important Important Important Don’t know Not very important Don’t know Not very important 58 82 0 0 0% 10% 20% 40%30% 50% 60% 70% 80% 90% 8 18 55 11 33 7 Very important Very important Important Important Don’t know Not very important Don’t know Not very important 26 42 0% 10% 20% 40%30% 50% 60% CSPs Vendors CSPs Vendors 15All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved. CONCLUSION The increasing hype around 5G is, in our experience, being driven by vendors and others, rather more than by CSPs/ telcos. And our survey lends support to this observation. That is not to say that telcos are highly circumspect about 5G, but right from the top downwards, and often in private or off the record, they tend to express caution about how quickly 5G will arrive and how ‘transformative’ it will be for the telco business when it does. Vendors are apt to do this too, but less so. In fact, telcos are pulled both ways. On the one hand, they understand that 5G hype is necessary to win the consumer market: consumers must be convinced to buy new, 5G-ready smartphones in droves to pull through any benefit from 5G infrastructure investment. But to get consumers to take a chance with a new technology in a timely fashion ultimately means playing every marketing card they and the smartphone vendors have. Hype is an important marketing card. On the other hand, telcos are reluctant to push network investment too far ahead of likely returns, many having been badly burned in the transition from 2G to 3G. As a result, they are usually keen to engineer 5G gradually, starting with 5G-ready, 4G RAN infrastructure and non- standalone New Radio (NR); investing where demand is greatest first, then transforming the network to ‘proper’ standalone 5G when the demand is urgent and new network applications, using techniques such as network slicing and edge computing, are introduced to make the effort worthwhile. One of the 5G unknowns, therefore, is how long the non-standalone phase will last before the market demands the roll-out of very high-speed services everywhere. Our main takeaway: be aware that telcos and vendors see the introduction of 5G in significantly different terms. All brands and products are the trademarks of their respective holder/s. Copyright Decisive Media Limited. All rights reserved.