By Geoff Hollingworth
We (the mobile ecosystem, all of us) are at a watershed moment—or at least that’s how I think we’ll see it a few years down the road. We’re starting to discover exactly how and why 5G provides value as we uncover specific applications and use cases.
Does it surprise you to hear that this is only now happening? Did you think all of that was sorted out already, given the 5G evangelism and hype you’ve been hearing for years? I’m personally not surprised, but then I’ve spent almost all of my career deep in the innards of mobile. For what it’s worth, here’s how I think about all of this and why.
First, mobile infrastructure advances in big, complex, long cycles. That’s the penalty we pay for having a global system that works so well, and so transparently—which is only possible because of the breadth and completeness of the underpinning standards (we just produced a paper on this if you’re interested in learning more). That long generational cadence, in turn, leads to the strange marketing and investing dance we’re now in the middle of. Before anything real gets done, you have to have the standard: The standard has to be conceived, fleshed out and ratified (globally) long before the market impact.
But the dance isn’t over when the standard is done. Rather it’s just beginning because we still have to sell the future to mobile operators and get them to invest. The operators want the next generation to be great as much as anyone—their bright future depends on continuing progress and growth. But, at the same time, there has to be a return on their next-generation investment. They aren’t going to mortgage their future (literally) on marketing speculation. They need to “see the meat.”
So the second phase of the dance is the selling of the promise—although it’s (again) a little complicated because the promise of a new generation always evolves over time. If you want an amazing example of how true that can be, consider 4G/LTE. Today it’s pretty obvious that the magic of 4G/LTE is broadband mobile connectivity and all the new services and applications that it enabled (like almost everything we use today). But broadband connectivity wasn’t the goal of 4G; that was an unanticipated benefit. the original goal was to evolve the infrastructure from a circuit-switched architecture to a packet-switched one. Stuff happens along the way.
As much as each generation tries to anticipate demand, it’s impossible to do that precisely years in advance. With the cloud and the Internet, it’s quite different—innovation is much more incremental: You change the dogfood a little, then see what the dogs think. We can’t do that for mobile because of the standards, the slow cadence of progress, and because of the magnitude of investment required for a global deployment of something new.
We’re to the point in the 5G dance where things are getting very real. The initial round of standards are long done. The equipment is designed. The evangelism drum has been beating for years. Everyone has heard a lot about 5G, although many don’t really understand it. All the mobile operators proudly have their first bits of 5G in the market and are touting their success and belittling their competition (oh what fun!). But it doesn’t seem to be going all that well, at least so far.
How can we say that when the ads and offers you hear sound like it is? It’s not just us—that seems to be what the operators and subscribers are saying as well, at least according to an interesting new report from Ovum Research on 5G pricing. If 5G was meaningfully“better” to end-users, then it stands to reason that operators would be charging a premium for it. But, by and large, they aren’t—at least that’s what Ovum seems to see and say.
Does that mean we should abandon hope and just wait for 6G? We don’t think so. We think it just means the value of 5G isn’t simply the speed, it’s something more. I think it’s in the new services and new devices that are enabled by the increased bandwidth and increased network performance, including the kind of edge cloud services MobiledgeX is developing.
The one operator that Ovum calls out as doing more than the obvious is SK Telecom—the large Korean operator. They are investing much more heavily, including in innovative services and edge infrastructure, and they are aggressively working with local developers to nurture discovery and innovation.
The good news is we’re at an exciting point in 5G, the “put up or shut up” point. The bad news is that the value of 5G isn’t simple to calculate—it’s not just a faster reading on an Internet speed test. If you’ve been in mobile as long as I have, that’s hardly surprising. Finding the real value will take a little more work, but it will also be much more rewarding—it’s about new devices and new user experiences and all sorts of human and machine services. The value of the public cloud wasn’t obvious to most when Amazon introduced virtual CPUs and virtual storage. It’s a lot more exciting now because of all the innovation built on top of it.
We don’t think all the good in 5G comes from edge cloud services (not that we would mind that), but we’re pretty sure that being able to develop services much nearer to the user and integrated with (and taking advantage of)the unique characteristics of the global mobile infrastructure is an important part of it.
If you wait for this all to be obvious it will be too late to benefit much from it (doh!). The innovators are the ones standing up lots of new bits and encouraging exploration and innovation. If you think that monetizing 5G is going to be just the speed, we think that is clearly not the case. It’s going to be more interesting and a lot more fun.
San Francisco-based MobiledgeX is creating a marketplace of edge resources & services to power the next generation of applications.