5G Investments decisions with Netradar

5g investments decisions

How and why 5G changes the way operators prioritise network investments

It is easy to see why network operators may feel that they’ve been here before: another new generation of cellular technology, another expensive round of network investment. To a large degree, it’s true – 5G is initially just another evolution.

There are, however, large payoffs in store for network operators that can correctly judge the best near-term use cases and associated investments for 5G.

Yet gearing up for 5G will undoubtedly involve considerable investment. How should network operators prioritise the complex investment decisions surrounding 5G? Has promoting 5G required the invention of use cases? Operators must separate the fact from the fiction.

The answer lies in staying aware of any unique characteristics 5G and how these characteristics really help existing network challenges.

5G promises progress – and cost headaches for operators

The biggest use case for 5G is without doubt enhanced mobile broadband, or eMBB. Mobile broadband users will benefit from higher capacity as well as higher throughput and lower latency. Device manufacturers have started to ramp up 5G production, with more and more 5G-capable devices shown at leading events such as CES and the upcoming GSMA event in Barcelona.

For users of mobile networks the benefits are clear. However, a recent McKinsey analysis suggests that network operator capital expenditure will need to increase by 60% in the five years to 2025, essentially doubling TCO across that period – in large part to accommodate 5G.

In a market that is increasingly saturated and competitive, network operators won’t welcome the cost headache. That said, the network investment will deliver substantial, immediate benefits:

  • 5G boosts capacity. Particularly in cities where cellular congestion is an issue 5G can deliver huge benefits for operators – irrespective of higher speeds and lower latencies, 5G simply provides much more “space” on a network, making it easier to meet user’s data requirements.

  • Home broadband. Where customers are in location that cannot realistically be connected with high-speed fixed-line solutions such as fibre, 5G can offer an effective alternative. Compared to 4G, 5G can deliver higher speeds, even though this means that these 5G implementations are over shorter distances.

There are other promised use cases unique to 5G – from industrial applications through to emergency services. However, while 5G is promising, the reality is more complex and network operators should think very carefully when deciding how to apply the technological advances of 5G in the interests of their customers – and the network’s bottom line.

Technical aspects complicate 5G planning

5G cars connected IoTAs with 3G and 4G, network operators will need to prioritise 5G investment to balance massive expenses with the associated revenue benefits. However, the much-touted use cases for 5G alongside 5G’s technical complexity make these decisions tougher than it was for the transition to 3G and to 4G.

Furthermore, 5G has unique technical aspects. For example, 5G’s extensive utilisation of millimetre wave spectrum implies a different approach to network investment. 5G spectrum is more sensitive to everything from weather to new construction so operators need significantly more data when planning networks.

 

Getting to grips with behaviour of mobile broadband users

While 5G’s unique use cases throw up a new set of challenges for network operators it’s likely that enhanced mobile broadband remains the biggest factor in network planning. eMBB is arguably the most important use case for 5G.

5G’s higher data rates can narrow the gap between fixed-line broadband and mobile broadband, while enabling mobile access to high-bandwidth apps such as AR and VR. eMBB can also deliver improved experiences across current apps including video and gaming.

As much as network operators would want to offer a blanket of 5G-enabled data access to all their users, a steady flow of investment is more likely, prioritised around the observed needs of users.

Network operators need to understand the existing user experience, and future user expectations, around the following key areas:

  • App usage. 5G promises to improve the in-app experience thanks to higher capacity, improved bandwidth and lower latency. Understanding which apps users use the most, and where networks most often cause a poor app experience, is crucial. Furthermore, operators need to identify trending apps too so that networks are not caught unprepared. One should remember that social media apps and cloud storage drive the need for better upload speed.

  • Network capacity and anomalies. Networks that are 5G-ready can deliver more capacity to more customers so 5G is an important factor in solving network bottlenecks that ruin the customer experience. Operators need to prioritise these bottlenecks for 5G upgrades, utilising 5G features such as small cells where appropriate.

  • Customer churn. Mobile broadband users have differing reasons for switching providers, and network performance is just one. 5G provides a unique opportunity to dramatically improve network performance where it matters most, while 5G also offers a differentiating factor that can keep customers on board.

Of course, 5G ties into network operating models in more complex ways, further complicating the investment decisions operators must make.

With eMBB delivering such high throughput rates it could be argued that 5G throughput is beyond what most users need, and that instead, the real benefit of 5G for mobile broadband lies in its ability to deliver more capacity and, as a result, unlimited usage plans.

So, operators may want to invest to achieve capacity rather than headline speeds which is different from the throughput-driven approach that motivated the switch from 2G to 3G, and 3G to 4G.

Clever decision-making counts

5G brings new possibilities for mobile network operators – more uses cases imply more subscribers, and better performance drives higher usage. Nonetheless, the costs involved in upgrading existing infrastructure is high.

An evolutionary approach to investment can help. In many ways, 5G technology builds on technology used by 4G so catering for 5G does not imply a rip-and-replace strategy, instead operators can gradually upgrade networks.

Where big investments or new equipment such as small cells are needed operators should use the data and analytics at their disposal to prioritise upgrades. However, the data available to network operators can be hard to interpret – or may be lacking in scope.

Augment 5G planning with Netradar

The Netradar Suite provides operators with insights derived from measurements taken where it matters most – the user’s device. As a result, operators get deeper insight into how users make use of mobile data services – including the most common apps used, the reasons behind poor network experiences and why customers churn.

Netradar Suite helps 5G

 

In other words, the Netradar Suite offers crucial additional guidance along the unusually complex 5G investment planning process.

Prioritising network investment is far easier with the actionable insights of Netradar Suite. With eMBB such an important aspect of 5G networks every operator should consider adding the Netradar Suite to their existing analytics arsenal.

We encourage readers to visit the Netradar Suite page for more information on how Netradar can help a network get the most out of its 5G investment.

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