With 5G launches starting across the globe in 2019, the road to 5G is becoming clearer. There had been over 80 live commercial 5G networks globally by the end of H1 2020. It can be seen that 5G enables new services such as 4K/8K videos, cloud games, and VR services, and more importantly, expands into vertical industries to facilitate digital transformation and upgrade of many industries. Besides opportunities, 5G also brings new challenges. For operators, how to develop 5G in the future is both a practical issue and a long-term strategy. Leveraging its rich experience in ICT industry and deep understanding of 5G, ZTE proposes to operators an road to their mid- and long-term 5G development, which covers three aspects: network foundation building, industry empowerment and operation transformation.
Road of Building a Cost-Effective Network
To build a 5G network, operators will face great challenges in investment due to larger site scales and higher single-site equipment costs. The coexistence of 2G/3G/4G/5G networks and differentiated 2B and 2C services aggravate the network construction difficulty and O&M complexity. From a mid- and long-term perspective, operators could build a highly cost-effective 5G network by making a top-level network design, high-performance network planning and low TCO network planning.
Top-Level Network Design
5G spectrum planning is the top priority in top-level network design, which needs to consider industry maturity, license price and networking performance. ZTE recommends the strategy of hierarchical networking across low-, mid-, and high-band spectrum (sub-1 GHz+C-band+mmWave). In terms of network architecture, NSA is the cautious investment choice by some operators in the initial phase of 5G deployments whereas SA is the target network architecture. If conditions are allowed, operators can go straight to SA 5G for TCO savings and faster expansion into vertical industries. The pace of deployment is also important in the top-level network design. Operators can follow a phased approach based on an assessment of the future service requirements to balance between investment control and the need for service expansion.
High-Performance Network Planning
As the most critical technology of 5G, Massive MIMO is a decisive factor in realizing a high-performance network. The performance of Massive MIMO depends on core chips, key components and key algorithms. As the leading vendor, ZTE has put 7 nm chips into commercial use, and will launch 5 nm chips in the coming two years. Key components including power amplifier, filter and antenna are moving towards miniaturization, new materials and new processes. Thanks to innovations in algorithms, some new technologies like automatic antenna pattern control (AAPC), 1+X SSB have become available.
The insufficiency of 5G uplink capability is a common concern in the industry. Both consumer services and industrial applications need higher uplink rates in 5G era. Currently, some technology solutions have been released to address it, for example, ZTE's FDD assisted supper TDD (FAST) that uses time-frequency dual aggregation to improve uplink coverage and data rate.
Dynamic spectrum sharing (DSS) is a focus for operators as it improves spectrum efficiency and enables faster 5G rollouts. The normal DSS solution based on 4G+5G dual-mode can't support 2G or 3G voice services. ZTE's SuperDSS solution realizes 2G+4G+5G or 3G+4G+5G dynamic spectrum sharing.
Low TCO Network Planning
In the 5G era, service scenarios are more diversified and differentiated, and thus serialized products are used for different coverage scenarios to achieve the optimal price/performance ratio. Operators can deploy serialized products targeting dense urban areas, suburban and rural areas, indoor and outdoor hotspots and even special coverage scenarios such as high-speed rail and aviation. Moreover, the coexistence of 2G/3G/4G/5G results in an increasingly complicated site. Operators can simplify sites and reduce installation and operational costs through employing dual-band or tri-band UBR, full-mode BBU, all-in-one cabinet, and A+P antenna system.
For an energy-efficient 5G, it is necessary to continuously optimize chips and key components. AI-based intelligent power saving and comprehensive site energy saving are important solutions as well. Operators also need to introduce an intelligent O&M system to improve processes including network planning, construction, maintenance, optimization and operation.
Road of Empowering Digital Transformation Across Industries
Vertical industry is the most important application scenario of 5G and opens new value propositions to the operator. However, compared with the consumer market, the industry customers are more sensitive to the value rather than the price for a service, and the requirements vary from industry to industry. How to provide high-quality services to attract industry customers, how to select high-value customers, and how to achieve better investment returns in the industrial market are big challenges to the operator.
To provide high-quality services, operators need to build core capabilities for 5G empowerment, which include core network capabilities (MEC, slicing, IOT, and cloud-network integration) and core industry service capabilities (video, V2X, unmanned aerial vehicles, and robots). These two capabilities as general services can be integrated into specific industries to build service systems for digital transformation of specific enterprise customers.
Among the core network capabilities, MEC and slicing are the two most important elements. MEC can be compared to warehouses deployed in communities for fast delivery and reception in the logistics industry whereas slicing choosing different transportation modes based on the importance of customers or goods. The combination of MEC and slicing constitutes a highly-guaranteed "delivery system" for industry applications.
Cloud services are essential in the industry market. However, the public cloud has obvious disadvantages in serving enterprises, especially large and medium-sized ones, such as inflexibility, high redundancy costs, and difficulties in assuring end-to-end SLA. Therefore, it is recommended that operators build a distributed precision cloud system oriented to industry customers, which precisely focus on industry application scenarios to customize cost-effective solutions for customers in different industries.
In selecting high-value industries and enterprise customers, operators can consider factors such as output value from 5G applications, 5G relevance, an industry's digitization level and appeal for digitization, and 5G application maturity. Manufacturing, energy, transportation, media, healthcare, and public safety are generally considered key industries, which, however, will vary across countries and regions. Meanwhile, operators can develop exemplary 5G applications for leading enterprises since their application cases are more replicable.
Road of Value-Oriented Operation Transformation
With the consumer market reaching saturation in the 4G era, it is difficult to realize significant growth in the 5G era through the traditional pipeline operation and traffic operation. In addition, there are great differences between the consumer and business services, and the existing consumer-oriented business model can't be copied to the vertical market. Operation transformation is inevitable. It is advised that operators make a breakthrough in the existing business models, business boundaries, and organizational capabilities to realize value-oriented operation transformation.
In terms of business models, operators need to move from the single traffic operation model in the 4G era to multi-dimensional pricing model. For the consumer market, operators can design a multi-dimensional tariff system based on the basic feature packages (traffic+rate+latency), value-added feature packages (connection+cloud service), and content service packages (video, game, and music), enabling user segmentation and service differentiation.
In the vertical application field, it is important for operators to break through the existing business boundary and expand their service scope to both the industry chain and business services. According to their own capabilities and the characteristics of the industry customers, operators can play the roles of connection provider, platform provider, integration service provider and end-to-end service provider respectively while flexibly adopting different business models such as B2B, B2B2C and B2B2B.
Operators also need to change their organizational structures and build capabilities oriented to industrial market, including marketing capabilities, delivery and operation capabilities, and higher-level ecological cultivation capabilities.
Network foundation building, industry empowerment and operation transformation are the essential strategies for 5G development in mid- and long-term. They must be executed together to help operators realize long-term, healthy development.