The GSMA is looking at "how society could benefit from 5G and is working on the business models", says Michele Zarri, Technical Director of the GSMA, speaking to ZTE Technologies about the GSMA's role in the 5G era at the 5G Summit held during MWC Shanghai 2017. He also talked about challenges facing 5G, future 5G developments and his vision for the industry. The GSMA is a trade body that represents the interests of mobile operators worldwide and organises a wide range of events around the world.
How has 5G changed what the GSMA was doing in the past?
5G creates a new type of ecosystem where not only would traditional mobile operators play a role but also new vertical industries would start to become users of mobile communications. So we move from primarily a business to consumer (B2C) market, which is about selling mobile broadband to people, to a business to business (B2B) market where on top of connectivity operators offer solutions to companies that use mobile technologies for their customers. So the operators, instead of directly talking to their customers, will talk to organizations who package mobile communications as part of their products. That's a shift from B2C to B2B creating new revenue opportunities.
Among the major organizations that are working on 5G, what role is the GSMA playing? What are its focus areas?
We have a very healthy relationship with all of the organizations that have shaped 5G in the past few years, starting from the 5G Forum, NGMN, and now to 3GPP who are the architect of 5G standards. As a trade association, we see our role, as facilitators of the growth of the ecosystem, that is, to help our members, operators, vendors, and vertical industries to benefit from the introduction of 5G. We see the GSMA playing a role in four areas: influencing the standards; ensuring there are no blocking points in deploying 5G from regulations; working on new business models and promoting 5G.
The GSMA is playing an increasingly important role in 5G.
What we give to our industry is a less technical approach because 3GPP does exceptionally well in this area; we focus on exploring how society could benefit from 5G and on the future business models so that the value generated is shared fairly in the ecosystem. We will continue driving connectivity and access to digital services for everyone, in other words, we are working to make the benefits of mobile technology available to as many people as possible. At the same time, we want to ensure that our members and associate members can build a profitable business out of 5G.
How does the GSMA balance between competition and collaboration?
We think that competition is essential and welcome it. Healthy competition leads to innovation and pushes everybody to improve. But at the same time, we think there are many areas where there are bigger benefits from sharing experience and constructive collaboration. For example, we've developed case studies that are released publicly so that people can learn from what other companies have done. We did this for services like VoLTE and RCS and are planning to do more of those, for example on infrastructure sharing and on the closure of legacy networks. One aim of these case studies is to reach an as large as possible section of our 750 operator members so that they do get information from us as a trusted neutral party.
What is the current state of the 5G ecosystem? What problems or challenges do you think it has?
The standards are coming soon and we will see pre-5G in Korea by next year. We expect China to become the dominant market in terms of the number of connections by 2025. It all seems to be going very well so far and things are falling into place. But there are also challenges the industry will face. For example, the deployment of 5G may be very expensive compared to the additional revenues it will produce initially. This is why the GSMA is trying to find ways that would simplify the realization of infrastructure sharing and making it less of a burden for operators to deploy 5G systems. That requires the support of the regulators and more collaboration between operators as we discussed before.
We also see the challenge of frequency allocation. We know that there are some bands and spectrum that seem good for global harmonization, but it is not good enough. We have to work at global level to ensure that frequencies are allocated in sufficient amounts including in spectrum below 1 GHz that can ensure cheaper and more effective deployment.
Despite the challenges, what are the promising achievements made?
We are conducting activities in the area of network economics and also working on new types of business models enabled by network slicing. We think those are the key ways to engage a wider community and to prepare for this shift from B2C to B2B we discussed before. We are gearing up to widen the traditional ecosystem involving vertical industries. We pin a lot of hope on network slicing also because it fits our DNA in enabling roaming and interoperability.
Could you tell us more on the 5G business models?
We are just at the beginning of this activity. What we are trying to do now is to understand what segments of the industry would require from mobile technology then what mobile operators could offer in terms of functionality and capability to meet those requirements. We are looking at the automotive and healthcare industries as well as the IoT ecosystem in general. We believe that the business models of the future will be a combination of traditional charging based on usage but will also take into consideration parts of the value chain that are currently not addressed by the operators. Data analytics could be one additional service, just like security as a service (SaaS). We will work with the whole ecosystem to ensure that the new business models are fit for purpose in the future.
What will be the most critical development in 5G in the next few years?
First of all, we hope that the promise of new radio will be delivered in terms of higher speeds and reduced latency. But we know that this is a long-term process and enhancements of the capabilities will be introduced over time. We think that the critical development will be in virtualization and the ability to do network slicing because this allows an operator to generate multiple types of networks from the same infrastructure and support multiple types of businesses associated with them. For us, virtualization and the new architecture that is designed around it is the major revolutionary aspect of 5G, which is otherwise more evolutionary.
What is the contribution of vendors like ZTE to the GSMA?
We strongly value the contribution of vendors. Especially in the last few months, we had a very fruitful collaboration with ZTE, starting with RCS, something we are working closely together to scale, but also on a number of other projects. Without the contribution of the associate members, the GSMA would not be able to deliver the same level of quality.
What's your expectation for vendors and operators in the future?
We really hope that while competing in the market they can use the GSMA as a place to work together to ensure that the 5G ecosystem is the best it can possibly be. We really welcome more participation and contribution towards our projects from our associate members. To facilitate it we are making sure that our projects are as open as possible.
The theme of MWC 2017 Shanghai is the "human element". What's your interpretation on that?
The human element is a reflection of the digitalization of society through mobile communications. Mobile communications have an impact on all of our lives, changing the way we conduct business, interact with each other and with the government. So besides the technology element, there's been an increase of a human element in mobile communications. That's what we explored at the event. We want to see what technology can do for humanity, not for just as a means of shifting data from A to B.
The GSMA plays an important role in achieving the UN's Sustainable Development Goals.
The Sustainable Development Goals (SDGs) are something we support and care about at the GSMA. The United Nations wants to achieve 17 specific goals by 2030 to end poverty, protect the planet and ensure prosperity for all. We think as a trade association representing the mobile community that we have a duty to ensure that our our technology contributes towards these goals. This is why, besides the conferences and the projects on 5G, we are investing a lot of our efforts into our Mobile for Development program to ensure that mobile technology helps to achieve the SDGs.
How do you help implement the SDGs?
We are looking at a number of opportunities, for instance, how we connect the unconnected, which is still unfortunately the majority. Also, how digital services can improve the quality of people's lives. So we are working in developing countries where there is a lower penetration of technology. We want to make sure that we put sustainable types of solutions in place. For example, we are looking at how mobile payment technologies enable people to get access to their money and make payments.
What mobile technologies are you most excited about?
As an engineer, it is hard not to be excited about 5G. New technologies and strategies like cloudification and softwarisation will bring a new wave of transformation. 5G is not just about the speed of the new radio and its super low latency; it's about creating a system that does so many different things for society.
What are you most looking forward to about the mobile industry?
I am looking forward to the industry being able to provide access to technology to as many people as possible. We have seen how access to the internet has changed and improved lives. I am looking forward to a future where telemedicine, e-education or e-government services or other internet based services are available to everyone. Ultimately I hope 5G will deliver on the promise of connecting everyone and everything to a better future.