Deploying a 5G standalone core network is a complex and expensive undertaking. But can a cloud approach and business model be applied to 5G and offer a potential path forward?
Delivering on the promises of 5G is no easy task. The industry has talked for some time about the new use cases that 5G could enable, from industrial internet of things (IIoT) to autonomous vehicles, smart cities to connected healthcare. 5G can provide the ultra-high speeds and ultra-low latencies required for data-heavy applications and cloud solutions.
However, 5G standalone (SA) will be required to achieve all these benefits. When 5G connectivity emerged in 2019, it was mostly deployed in non-standalone (NSA) mode, which meant deploying 5G radios on top of existing 4G/LTE core network infrastructure. 5G NSA was a good stopgap and offered the benefit of being quick to roll out.
But to enable 5G’s more compelling features and use cases, a full migration to SA networks with 5G radios running on top of a 5G core network infrastructure is essential. It will allow for increased device density, greater reliability, and much lower latency, paving the way for all kinds of advanced enterprise applications. 5G SA also offers higher speeds, wider coverage, more progressive services, and is more stable in general than 5G NSA.
When the network is truly 5G from end to end, ultra-reliable low latency communications (uRLLC) can become a reality, and massive machine-type communications (mMTC) can be enabled. 5G network slicing will empower enterprises with mobile private networks and IoT use cases that have not been previously possible.
As of February 2023, few 5G SA services have been launched. According to the Global mobile Suppliers Association (GSA), 239 operators in 94 countries and territories have launched or soft-launched 5G mobile services. However, only 38 operators have deployed, launched or soft-launched standalone 5G in public networks. There is positive momentum though: Deloitte has reported that it expects the number of MNOs investing in 5G SA networks to double from more than 100 operators in 2022 to at least 200 by the end of 2023.
There are several reasons behind the relatively slow rollout of 5G SA. One is that spectrum auctions are still ongoing in many countries to grant new ranges, with some operators feeling that high prices they had to pay for first spectrum ranges could prove a barrier to 5G development and profitability.
In France, proceeds from the 5G 310 MHz spectrum auction came to €2.786 billion. In Germany, the auction encompassing all spectrum ranges amounted to €6.55 billion in total. This led to the GSMA to distribute recommendations for regulators, which include a clear message about spectrum auctions: “Governments and regulators should avoid inflating 5G spectrum prices as this is linked to slower broadband speeds and worse coverage.”
It's a challenge operators must overcome: they need to carefully plan how they use different types of spectrum to optimize coverage in urban and rural areas, while also meeting the speed and latency requirements for IoT and Industry 4.0 use cases. While also keeping one eye on optimizing deployment costs of new sites and antennas. It’s a lot to manage.
The radio access network (RAN) must support 5G SA. This too means addressing a couple of challenges. First is that using a high-range spectrum to deliver the high speeds promised requires deploying more antennas. Those antennas need to have a fiber connection, which can mean heavy civil engineering work. Which, naturally, incurs more costs.
Second, that there are still communities and populations who express concerns or even outright resistance to 5G infrastructure. So operators will need to address communications to these consumers to reassure them and compromise if and when necessary.
Furthermore, there will be a need for a new core network. That network will incorporate new technologies like software-defined networking (SDN), network function virtualization (NFV), network slicing, HTTPS proxies, regional P-Gateways, and more. Signaling will be based on service communication proxy (SCP), binding support function (BSF), and security edge protection proxy (SEPP) functions. The appropriate 5G network will also require HTTPS as the transport protocol.
As such, a massive financial investment is required. These financial requirements make it cost-prohibitive for smaller operators to deploy a 5G core network. It’s proportionally more expensive, per user or per megabit, which will likely see smaller operators priced out. In a recent survey conducted by Orange, a core network manager in Latin America commented, “Deployment of 5G is being hindered by the cost of equipment”. Larger operators, with more potential B2B and B2C customers, are less impacted.
Despite all operators agreeing that 5G is the way forward, some are still unsure of just when the right time will be. This is especially true in countries where 4G is only now really becoming mainstream. Uncertainties can make it difficult to justify investing in a 5G SA core network immediately, and as of now, with 5G still not being fully defined, it also makes return on investment (ROI) harder to predict. 5G use cases are highly-anticipated, but, again in some geographies more than others, are still not mature and totally proven – so, can telcos be sure they’ll be able to monetize them at a premium? Customers will still expect value, however exciting the new possibilities. Also, standards continue to evolve, which makes planning complicated. So overall, it is fair to say telcos are being asked to make huge investments for a future which cannot be 100% confidently predicted.
Operators will need to hire and think differently from before. They must develop or recruit skills and expertise in IT-like technologies and create new, more agile operational models. It all points to a major overhaul in how telcos have been operating for many years.
| “What kind of equipment to deploy? What technology transfer is needed? There is a training component. We will have to put our technical staff through training so that they can be able to effectively maintain this equipment” – Telco Director, Latin America (Source: Orange survey, 2023) |
Operators must also pay attention to other areas of their operations to support 5G SA effectively. Business support systems (BSS), for example. According to Nokia research, only 11% of 5G providers worldwide have appropriate BSS for effective 5G monetization. A further 98% may need to alter their BSS in some way to meet the demands of 5G-powered business models. This is because the new business models enabled by 5G SA will require operators to be much more agile in how they define, test, and implement new business offers and processes. Operators will need to be able to make changes faster.
The as a service (XaaS) business model employed in cloud computing could present a potential path to 5G SA even for smaller operators. 5G core network as a service would be the name: and it would mean that operators could avoid deploying and hosting their own 5G core networks. They could simply buy a comprehensive service from another provider, just as companies do with public cloud, while still retaining full and secure control of their operations. The 5G core network provider would host the service and charge the operator according to usage, potentially by user, service or traffic.
On the network provider side, it’s conceivable that mutualization of equipment, hosting, technical and human resources across multiple clients would make the CAPEX more justifiable and the ROI swifter. Mutualization could mean that the provider could propose more competitive pricing, at levels individual telcos couldn’t manage on their own.
The cloud model of 5G core network as a service can offer a range of benefits:
5G SA will be a vehicle for innovation and greater prosperity throughout the world, and it will be a must-have. However, not all telcos will have the financial means and in-house expertise to develop their own 5G core networks and wait several years for ROI. 5G core network as a service could be the perfect path forward for everyone.
