One of the most talked-about 2020 trends in the telecom industry (give or take a pandemic) has been the pending arrival of 5G networks. Carriers and communications service providers (CSPs) have ramped up their investments in this standard and begun making preparations for a wireless environment dominated by 5G networks. Gartner recently predicted that the global 5G network infrastructure market would see its total revenue double in 2020 alone. All told, the research firm expected 5G network infrastructure to account for 21.3% of the entire wireless infrastructure by the end of the year.
5G networks offer significant opportunities for CSPs to deliver faster and more reliable services while supporting more users and customers than ever before. Despite all the revenue-generating potential that 5G presents, the technology continues to be plagued by misconceptions and, at times, outright mistruths.
CSPs shouldn’t let unfounded fears or reservations about the latest wireless standard stand in the way of technological progress and new revenue streams. Let’s clear the air and bust some of the most common myths surrounding 5G.
5G alone cannot solve user experience issues
Any new technology as hyped as 5G is bound to produce outsize performance expectations. Although 5G does offer lower latency, better bandwidth and higher capacity compared with 4G networks, it is not, in and of itself, a solution to user experience problems.
For instance, customers relying on outdated devices may not see the leap in performance they expect from a switch to the 5G standard. No amount of increased bandwidth capacity will compensate for the bottlenecks created by older end-user hardware or suboptimal location and positioning. The move to 5G will not necessarily provide meaningful user experience improvements if applications, services and devices aren’t optimized to take advantage of the technology’s strengths, either. It’s important to keep those considerations in mind when rolling out 5G services and set expectations accordingly to avoid customer friction.
With any new technology investment, CSPs should prioritize user experience and customer experience factors into their decision-making process. Chasing the next big thing and making infrastructure upgrades based purely on industry hype will not produce results that support stronger customer relationships, boost retention figures and increase revenue.
5G will not replace 4G
There has been some confusion among many CSP customers about the long-term viability of 4G networks once 5G becomes ubiquitous. One common misconception is that 5G will eventually replace 4G, so switching to the newer wireless standard will put them ahead of the curve and future-proof their network. Considering how 4G completely overtook 3G as the go-to wireless network standard (mainly because it was a one-time leap from circuit-switched to packet-switched technology), it’s understandable why people would believe the same situation would play out with 5G.
The truth is, 4G isn’t going anywhere. While 5G networks are better equipped to handle increased bandwidth demands and support larger numbers of diverse devices, 4G will continue to play a role in the wireless environment. Industry analysts and experts have repeatedly stressed that 5G will complement 4G rather than replace it outright, especially during early rollouts.
As CNET explained, initial 5G networks will rely on existing 4G networks to connect to current endpoints and devices. In some cases, networks and services branded as “5G” may actually be a combination of advanced 4G offerings. Furthermore, it may be years before 5G reaches rural communities, limiting its initial appeal to densely populated areas.
Ting Mobile’s Andrew Moore-Crispin noted that current 5G technology is not well-suited for every environment without considerable infrastructure investment:
“The 5G that we’re all excited about uses millimeter waves in the high-frequency spectrum, Moore-Crispin stated. “These can carry lots of data, but don’t travel far and don’t penetrate buildings. That’s why any 5G of this type has only been tested in confined urban areas — beyond that, small base stations will need to be implemented to transmit the data.”
CSPs need to consider their target audience and customer base before deciding if a move to 5G is right for them. Organizations that serve rural communities may not have ample reason to invest in this technology at this point in time.
Demand for 5G may not offset investment costs
CSPs that assume they can make up their 5G investment costs in short order may be in for a rude awakening. According to a 2020 GSMA Intelligence report, telecom operators will spend roughly $880 billion on 5G infrastructure upgrades over the next five years. Despite that significant investment, the study expected revenue growth to drop 1% year-over-year from 2020-2025.
Given how much industry experts have attempted to temper expectations regarding performance gains with this new wireless standard, CSPs need to question how much customers will be willing to pay for slight improvements in service quality and delivery. For some audiences — enterprise-scale customers, most notably — moving to 5G will be worth the added costs, while consumers may decide to stick with 4G offerings until the cost/benefit ratio tips in their favor.
Don’t expect 5G to produce any money-making miracles right off the bat. Make a thorough assessment of your customer base, market and assets to determine if it makes sense to ramp up 5G investment right now or wait for your target audience’s needs to catch up with the technology.
Legacy billing systems may not support 5G
Many CSPs are excited about the prospect of using 5G networks to rapidly deploy new and improved services to their customers, but their existing B/OSS systems may not be able to keep up with that level of speed or agility.
Mobile World Live cautioned that the manual nature of many legacy billing and OSS platforms prevents CSPs from capitalizing on 5G’s dynamic service launching capabilities. Highly agile and flexible B/OSS solutions are needed to quickly provision new digital services and tap into new markets. That means minimizing manual processes and streamlining workflows wherever possible.
The wireless network of the future demands a more sophisticated and advanced billing system. IDI Billing Solutions CostGuard® Billing and OSS helps CSPs accurately rate, bill and invoice an ever-increasing number of services, allowing organizations to launch innovative offerings, explore new ways to create a better experience and grow their revenue. Contact our team today to find out how IDI can future-proof your billing, automation and workflow processes to support your 5G aspirations.