The Curious Case of 5G Killer Apps

Chapter-1: Engaging the 5G Warp Drive

Since the start of 2020 – like a runaway train, the 5G New Radio (NR) rollouts have been progressing in rapid, irreversible, self-propelled iterations – revolutionising the development of emerging technologies, from AI powered Cloud XR, telemedicine, robotics and intelligent vehicles to fuelling the 4IR. The latest Ericsson Mobility Report forecasts 190Mn 5G subscribers by the end of 2020, with numbers increasing to 2.8Bn by the end of 2025 – making 5G the fastest scaling technology ever. Also, with the addition of 160Mn fixed wireless access (FWA) connections by the end of 2025, accounting for approximately 25 percent of all traffic – we are entering a new era of enhanced customer experience by engaging the warp drive!

5G, that was hailed as the future of connectivity, is now a reality. Today, it is the foundation of a hyperconnected society that connects billions of devices, machines, chips, sensors and people. Even with adjustments for the coronavirus pandemic, the GSMA estimates 1Bn 5G connections globally by 2023, rising to 1.7Bn in 2025 (excluding cellular IoT) – accounting for 20% of cellular connections. And why is this the case, you may ask? Well, the reason is simple, 5G holds the key to advancing a myriad of exponential technologies and catalysing fundamental changes, to a long list of industries and services. 5G will boost the telecom Mobile Economy and radicalise the 4th Industrial Revolution (4IR).

GSA has reported that there are 392 operators in 126 countries investing in 5G.

Historically, with every previous generation of wireless network, there has always been a “killer app” that has accelerated and industrialised the telecom economy. While 2G gave us text-messaging, 3G introduced smartphones with internet connectivity and 4G made video-streaming a reality. As a result, the 5G network, with its tremendous potential for consumerization, has officially led to the case for finding the killer app. 

In this article, I shall discuss three key drivers for 5G consumerization and then list down possible candidates for 5G killer apps. Contrary to this, many industry experts believe, that there really isn't going to be any one "5G Killer App" – as 5G is too big, too transformative, too diverse to be contained in a single glorified use case. So let us try and solve the case!

Chapter-2: Key drivers for 5G consumerization

In this section, I will touch upon three key 5G drivers that include – accelerating enhanced Mobile Broadband (eMBB) deployment for FWA apps, designing affordable 5G devices for early adoption, and building cost-effective intelligent 5G Open RAN architectures.

Accelerating eMBB deployment of FWA Apps

Earlier in June this year, GSMA reported that the mobile industry had been witnessing a rise in the adoption of eMBB for 5G FWA use cases. This is partly because, eMBB use cases are most likely to have a near-term impact, as they are largely an extension of the existing 4G value proposition and should see relatively quick uptake in the market as 5G networks become commercially available. And also, because in the early stage of 5G standalone (SA) Opt2 deployments, the main focus is on eMBB and securing interworking between 4G and 5G. Exhibit-1 below, is reflective of the high eMBB user experience data rate, peak data rate and peak spectral efficiency values.

The two key facets of eMBB driving adoption and value creation in the 5G economy are – first, extending cellular coverage into a broader range of structures, including office buildings, industrial parks, shopping malls, and large venues; and second is improving capacity to handle a significantly greater number of devices using high volumes of data, especially in localized areas. The net result of these two improvements is that end users will have an improved, and more consistent, experience using mobile broadband applications regardless of location.

Designing affordable 5G Devices for early adoption

5G adoption is dependent on the availability of affordable devices. Usually mass-market devices need to be in the range of $100-200 to achieve more that 50% subscriber penetration. During the 4G era, the lack of cheaper smartphones created a longer than expected adoption cycle. It took around 7 years for 4G smartphones to achieve the $100 price point. For 5G, prioritising “thin and light”, basic specs but fashionable smartphone production in the sub $200 smartphone category fostering start-up brands like Realme and Coolpad for mass production using mid-range chipsets like MediaTek Dimensity 720 5G, has helped China produce more than 80Mn 5G phones shipped by June 2020. In addition, more that 45% of Chinese handsets are below 190gms, which provides an interesting proposition of simpler but fashionable experience. 

In the US, per Exhibit-2, IDC reports that the number of 5G business subscribers will rise to 2.5Mn in 2021. Additionally, IHS Markit reports, that after 22 5G handset models were introduced in 2019, the number will rise by over 5x in 2021 and over 10x in 2023.

Building cost-effective intelligent 5G Open RAN architectures

Today several operators including Telefonica, Vodafone, AT&T, Verizon, Deutsche Telekom and Rakuten are incorporating Open RAN into their business strategy. This is to unbundle the components and software inside the RAN, with a view to make it cheaper and more flexible for 5G deployments across both macro and metro layers. Rakuten expects to cut 40% CAPEX and 30% OPEX with its 4G & 5G Open RAN networks, while building an innovative and continuously evolving multi-vendor RAN ecosystem with new business models and revenue streams. Ericsson, Nokia, Samsung, Huawei and ZTE are amongst the incumbent integrated RAN stack vendors; where as Mavenir, Parallel Wireless and Altiostar are the challengers who are committed to building disaggregated Open RAN architectures.

With 5G there is increased computational power and higher network complexity, that requires 'smart networks' using intelligent radio resource management and automation to handle traffic congestion. This can be achieved by applying AI/ML to build an intelligent 5G Open RAN by applying long short-term memory (LSTM) recurrent neural network deep learning models, trained at non-RT RIC in the Open RAN architecture with data gathered from RAN, to learn and predict the traffic patterns of a real-world cellular network in a densely populated area.

Exhibit-3 below, illustrates a high-level Intelligent Open RAN Architecture based on the O-RAN Alliance RIC model. Reach out to me for a detailed architecture paper on this subject.

Chapter-3: Candidates for 5G killer apps

With the three 5G consumerization drivers defined and detailed, let us now apply them to identify a possible set of candidates for 5G killer apps!

#1 – (Consumer/ Enterprise) FWA on eMBB leveraging Open RAN

Operators that have launched commercial 5G FWA, are typically rolling out coverage gradually as they focus on providing a consistent, reliable quality for this new type of service. They are also deciding how best to price 5G FWA including differentiation based on speeds or data allowances. Counterpoint Research predicts that the global household FWA subscribers will >500Mn by 2030, and this growth is supported by a myriad of use cases. The challenge – owing to the fragmented nature of the spectrum bands used globally for 5G FWA, range from <6GHz (3.3-3.8GHz) to mmWave (28GHz & 39GHz) – there will be a requirement to develop region and/or country specific CPEs – an impediment to acquiring economies of scale for international Telcos.

#2 – (Enterprise) Extended Reality in Medicine leveraging IoMT

Extended Reality (XR) encompasses Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), and Simulated Reality (SR) as well as other variations – this differentiations is made clearer in Exhibit-4 below:

XR in medical teaching and training, diagnosis, treatment, and telemedicine – is quickly becoming one of the key 5G enabled technologies for improving healthcare services, even now in its earliest stages. According to IDC’s research, the XR medical market will reach $1.7Bn in 2022, with a CAGR of 105.6% from 2018 to 2022. Read my article on IoMT at the Edge, to get more insights into the role of 5G in Medicine.

#3 – (Consumer) Mobile Video with affordable devices on Open RAN

ABI Research reports that, mobile video is clearly the most popular and demanding application running on both mobile and fixed networks today and will likely remain so for many years. Many CTOs of MSPs now claim that they design and run video delivery networks, rather than mobile broadband networks, since, in most cases, video now makes up for more than 70% of the traffic their networks carry. With 5G’s hyper speeds, this is promising candidate for Telcos. According to Openwave Mobility’s Mobile Video Index (MVI), which uses traffic measurements from live mobile networks, video traffic has grown as much as 60% YoY in developed markets, and almost twice that in developing markets.

#4 – (Enterprise) Industrial Automation leveraging MIoT

 IoT Analytics reports that annual spending on IIoT platforms for manufacturing will surpass $12.4Bn by 2024, with a CAGR of 40%. The Massive IoT (MIoT) use cases are where we start to see the transformative impact of 5G. The roadmap for LTE includes purpose-built cellular technologies such as Cat- M1 (eMTC) and Cat-NB1 (NB-IoT), which are starting to incorporate low-power improvements to address the growing cellular IoT market. IHS Markit believes 5G has the potential to address a much larger segment of the M2M and IoT markets, as well as reducing costs because of economies of scale. 

#5 – (Consumer) Mobile Gaming on eMBB leveraging Open RAN

5G is expected to bring a new boost to the massive Mobile gaming business, allowing higher performance/graphics games to be played without the need of a console. Analysts expect 180Bn USD revenues from Mobile gaming industry by 2022. To stream high quality games on smartphones, 5G will need to leverage on high throughput, low latency and edge. A console like PlayStation 5, will run games at 60 frames per seconds to provide 4K quality. To achieve this, the roundtrip latency from the device to cloud will need to be <30ms (half the numbers of frames). This includes uplink, processing and rendering, and downlink of streaming. The throughput for 4K HD capable smartphone will be much higher as well. A UHD 4K experience with 60fps could require up to 35mbps. 

The Final Chapter

In conclusion, unlike the previous G(s), there isn't going to be one single "5G Killer App" that will win the race. As Telcos continue to rollout 5G, businesses continue to define their requirements, and innovators continue to rack their brains together to build next-generation path defining solutions – we will find a way to monetise 5G with extremely high speeds, high bandwidth, ultra reliable low latency, and leverage that into unanticipated new applications, services and capabilities.

Would you like to share your thoughts on this perspective? Please leave your comments and questions below, and feel free to share this post if you found it interesting and valuable.

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– Ashish Kar

Author is a Chief Architect @PCCW Solutions, with 24+ years in the ICT industry and an innovation gameplanning coach. He has built a Silicon Valley innovation lab and designed several IoT Applications and AI-driven solutions for telecom and retail organisations. He can be reached on email at [email protected].