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| 8 | Industry Voices—Sharma: Anticipating 5G`s impact for years to come | --- | |
| FierceWireless: Wireless | 2019-12-13 01:00 | ????0? | |
| At our recently concluded senior executive summit, Mobile Future Forward, we completed an end-to-end world’s first live surgery demo (you can read about it here and watch the actual demo here.) Last year, we opened the conference with our favorite robot, Pepper (another industry first.) The purpose of these demos is to illustrate the potential roadmap for the industry and what’s to come. Clearly a lot of work needs to be done before such experiences will become mainstream, but there is no doubt that there is a tremendous amount of research and product work going on to make these innovations possible. 5G is one of the key building blocks in these experiences. Of course, 5G is not needed in every possible scenario, but 5G will be a critical fabric necessary for building many of the new applications and services that are not possible today.5G arrives at an interesting point in the industry’s evolution. For the first time, the network upgrade cycle is taking place amidst declining or flat service revenue growth for the operators. In the U.S., the service revenues declined for three straight years before returning to modest growth recently. The story is the same for other mature markets. Even operators in developing markets are facing challenges. It is time to rethink the operator operating model. There is a path to revenue growth and EBITDA expansion, but it is complicated, as it requires new business models, infusion of software-driven network management, investment in vertical expertise, and rethinking the business from the ground-up.There are a number of variables that go into the economics, revenues, and EBITDA equation. While the industry is figuring out new revenue areas from 5G, the management teams must be prudent about how they plan their Capex/Opex while maximizing EBITDA. They must articulate a compelling narrative that tells their story of investment and rewards. CEOs must lay out the vision and roadmap for the company in both quantitative and qualitative terms. The 5G ecosystem will be very different from the previous four generations, and as such the degree of uncertainty will increase. To manage expectations, the technology and financial teams must work more closely together than they have in the past. The financial teams must have a clear understanding of how a dollar in network investment is related to the revenue and EBITDA output. One must develop a framework that clearly connects these dots. Operators who manage this profitability journey effectively by taking advantage of advanced software tools will be rewarded by the financial markets.The single biggest network management challenge that the operators face is that of the managing of the video traffic. While new sources of traffic will emerge in the next few years, the single biggest source of network congestion is still likely to be video that will itself undergo significant evolution from SD to HD to VR to holograms. Traditional optimization techniques are just not adequate. 5G is also not an adequate response to the problem. We have to learn to apply AI to manage the traffic in real-time. Furthermore, new types of traffic streams will tax the network. We built the most accurate cellular data traffic model early on that predicted how the next ten years of growth might look like. The 5G data growth model is much more complex and unpredictable as the number of variables are likely to growth exponentially. We need new ways to address this traffic dilemma. This encapsulates traffic management at the RAN, Edge data centers, core, and the cloud. New elements of the network that help orchestrate and optimize the traffic are needed that learn and apply intelligence in real-time. Operators should be more open to working with startups who are often nimbler and more innovative in addressing these opportunities. There is a straight line from the use of software for automation and network management to reduction of capex and Opex. CFOs should take notice and actively work with their CTO office to plan the 5G roadmap.Chetan Sharma is CEO of Chetan Sharma Consulting, an 18-year young management consulting firm and is an advisor to CXOs and boards of companies in the wireless industry. Over his 25 years in the industry, he has worked with operators on all five continents and has the rare distinction of advising management teams for each of the top 9 global mobile operators. Chetan has written 15 books on various wireless topics and his research work has helped shape many strategic decisions and dialogue in the industry. He is curator of industry’s premier brainstorming summit Mobile Future Forward. More information at www.chetansharma.com. You can follow his musings at @chetansharma -- ???????? | |||
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