Skip to Content

5G Monetization: Practical Use Cases to Business Models and Key Technology Enablers

It’s easy to consider 5G as a progression of internet speeds and bandwidths from 4G that will make the instant gratification that we expect from our online experience even more instantaneous.

5G Monetization - Practical Use Cases to Business Models and Key Technology Enablers

5G Monetization – Practical Use Cases to Business Models and Key Technology Enablers

But 5G is about more than just enabling unprecedented speed. Its architecture will profoundly transform the way people experience their homes and cities, how they drive, how they receive healthcare, and the kind of augmented and virtual content that will forever expand the boundaries of their reality.

5G Monetization - Practical Use Cases to Business Models and Key Technology Enablers

5G Monetization – Practical Use Cases to Business Models and Key Technology Enablers

Content Summary

Key 5G Performance Elements
Architected for Monetization
5G Monetization Challenge: Building The Business Models
Three Main 5G Business Models
Business to Consumer (B2C)
Business to Business (B2B)
Business to Business to Any (B2B2X)
5 Business Enablement System Must Haves

With consumer expectations at a record high for a faster, smarter, more convenient, transformative digital world, we are seeing how consumers’ demand for a more digital society is driving the conversation around 5G monetization. Use cases that pique the imagination, like autonomous vehicles, remote surgery, and immersive mobile VR and AR are at the forefront of any conversation about the potential of 5G. But what these conversations lack is a true understanding of the place of the service provider in the value chain, beyond providing the baseline connectivity.

5G will enable operators to expand their value proposition beyond connectivity to the value that 5G-enabled services bring to consumers, enterprises and service partners. With this understanding we can start to look beyond the use cases to the actual business models that service providers will employ in order to maximize the monetization potential of their 5G networks. This ebook will look at the mobilizable elements of the 5G network, and explain how a discussion of 5G business models is critical to success monetization of 5G.

Key 5G Performance Elements

As service providers to gear up to tap into the 5G opportunity, the key performance elements available for monetization include:

  • Enhanced mobile broadband, providing fiber-like experiences over a wireless radio link, expected to enable over 1Gbit/s broadband. This will enable key use cases like ultra-high definition video, including 3D rendering and fixed-wireless broadband.
  • Ultra-reliable, low-latency communications, which includes those use cases that need extremely low latency in order to ensure the success of the service. A good example of this is AR, VR, and gaming which are negatively impacted by higher latency. This also includes things like vehicleto-vehicle communications and remote surgery which have an extra requirement of reliability in order to ensure public safety.
  • Massive connectivity, enabling virtually everything to be connected, in an IoT driven world, where, more than 1 million device connections per kilometre squared. With the accelerated proliferation of Industry 4.0, there are many commercial applications that will benefit (and which can be monetized) from 5G. Smart Cities will also benefit from the increase in densification of connectivity, essentially powering the connected life of their citizens.

Architected for Monetization

Although the performance of 5G is a key element of its monetization potential, another key aspect in order to power new business models will be the architectural characteristics inherent to the 5G network. These will enable service providers to optimize the network not only for performance, but for tapping into tremendous monetization opportunities. The three characteristics that particularly stand out are:

  • Virtualization: this software-driven network will enable a new service delivery model with unprecedented speed. A fully virtualized network will allow service providers to be more aggressive with their launch of new services and adopt a ‘failfast’ business approach due to the flexibility, agility, scalability, cost optimization, and shorter time to market.
  • Network slicing: this entails partitioning a single network infrastructure into multiple virtual occurrences to extend the capabilities of the network. Slicing enables service providers to optimize multiple parameters of the service delivery, such as bandwidth and latency, for a specific type of service per slice; e.g., video on demand or connected home, without impacting overall network performance. Network slices can be monetized through Network Slice as a Service, bundled into offers for enterprise customers, and as a quality differentiator for consumer services.
  • Edge computing: this enables service providers to move applications and services to the network’s edge, decentralizing them from central data centers to edge data centers. This way many value added services that require ultra low latency can deliver on the performance requirements and be monetized accordingly. Edge computing can be monetized through charging for hosting of partner and enterprise applications in the edge and by selling VAS that are hosted in the edge to consumers.

5G Monetization Challenge: Building The Business Models

While we have painted a picture of superior performance and architecture that might imply that 5G is a sure thing for driving revenue growth for service providers, there are still a few challenges that must be addressed in order to maximize 5G monetization potential.

The capital investment required in Spectrum, Radio Access Network, Enhanced Packet Core, and IT Infrastructure will be substantial. Operator organizations will have to adjust and transform, with Gartner estimating that 35% of roles in operators will be either new or redesigned. And finally, creating effective monetization opportunities will be essential in order to ensure maximum return on both capital and organizational investments.

In order to achieve effective monetization, it is not enough to ensure superior performance and architecture, nor is it enough to have vague ideas of the benefits of use cases. It is incumbent on any service provider to have a clear business case for offerings they bring to market, and in order to do that they must have a clear understanding of the business models which they will apply to those use cases.

For instance, VR is often cited as a killer use case for 5G. However service providers must go further and ask themselves who is going to pay whom for these VR services. Is it likely that consumers will pay operators for VR devices and applications and perhaps even quality of service for VR data? Or maybe it is more likely that the VR device manufacturers will pay service providers to tailor a slice of the network for their service and hosting of their applications at the edge of the network in order to deliver the low latency and enhanced broadband capabilities they require to deliver a superior experience.

These are two very different business models and require different understanding of what and how you monetize a service.

Three Main 5G Business Models

Let’s define the three main business models for 5G monetization.

  • Business to Consumer (B2C): these offerings will focus on using the capabilities and characteristics of 5G networks to strengthen service offerings to end customers, such as Fixed-Wireless and content, and will also include increasing bundling of partner services. The monetization elements in these offerings will be QoS-based data, goods and subscriptions including content, media, and partners.
  • Business to Business (B2B): this is a large area of potential growth for service providers who will attempt to increase value they bring to industry verticals and help drive Industry 4.0. Here they will attempt to monetize embedded connectivity, managed connectivity, VNFs like security as well as facilitate intelligent operations and automation. They may also bring partners to the table and enable advanced use cases like AR guided technical support.
  • Business to Business to Any (B2B2X): this may be the biggest potential growth area for operators. The flexible, virtual nature of 5G networks will enable service providers to equip application developers and device manufacturers with embedded connectivity and virtual network functions as a services in order to power their products. This has the potential to be a new wholesale service for operators that can provide open platforms to these customers to onboard themselves, equip themselves with services and settle with the operator, easily and efficiently.

Business to Consumer (B2C)

The key element for 5G monetization: Enhanced mobile broadband

Business models in action
Taking a business model view of the potential for 5G monetization gives us a better perspective on the ways service providers will be able to monetize the capabilities and use cases of 5G. Let’s take a look at some examples of business models in action.

Direct to Customer: Dramatically expanding the playing field
Through this model service providers will engage directly with consumers, offering them qualitative improvements on core, new and partner services. For example:

  • New services such as fixed wireless
  • An extensive portfolio of partner services
  • Application-based quality of service offers
  • Tiered data offers based on quality of service

Here’s an example of how a service provider would approach offering fixed wireless directly to consumers.

Meet Jan

  • Lives in Austin, Texas
  • Is married with two kids
  • Has a mobility family plan
  • Her family of four all consume a lot of video content on their mobile devices
  • But turn to cable for TV content, with an average monthly bill of $200/month

Jan is a NexTel wireless customer, but has opted for one of the competitor’s triple play offers at home.

With 5G, NxT Communications can offer a fixed wireless bundle to displace the cable provider and expand its offering to Jan to include the content that is currently being provided by the competition. For example, NxT can offer a bundle of 1Gbps internet with low latency for the gamers in the house, 8K video TV Everywhere and bundled OTT content. They can also set the stage for more services in the future with a Home Gateway that is ready for connected home services.

The benefits for Jan are clear — better, faster, internet and more content than ever. For the operator, this is an opportunity to compete in a new line of business and opens the door for further penetration into the home in the future.

Business to Business (B2B)

The key element for 5G monetization:

  • Massive machine-type communication
  • Ultra-reliable, low-latency communications

B2B: Offering the full-service suite
In addition to being able to engage with consumers on a whole new playing field, 5G will enable operators to transform the B2B engagement as well, by:

  • Enabling new kinds of services such as those required by IoT and Industry 4.0
  • Embedding connectivity and eSIM management for organizations across multiple verticals
  • Managing connectivity and security on behalf of those organizations
  • Enabling intelligence and automation

Let’s take a closer look with an example from the field of agriculture:

FarmX is a mid-size, eco-sensitive farm. It is located in upstate New York and supplies fresh produce to many other farms as well as to restaurants. Its business depends on sustainable farming and streamlining costs.

The FarmX sales engagement
The service provider presents an end-to-end solution for Industry 4.0 capabilities that include connectivity and partner services such as humidity sensors, water management, breed management, and crop health sensors.

After negotiation and agreement, FarmX is mapped to the narrow band IoT network slice. Once the sensors start generating data, FarmX starts to receive actionable alerts, and corrective action is taken through equipment automation.

These objectives can be attained by the latest advancements of precision (smart) farming — which delivers great cost savings to farmers worldwide. For example, mobile sensors can be attached to farm equipment — such as sprayers of crop protection products, to ensure that only the required field areas are sprayed, and that the amount of spraying is optimized. It also entails real-time alerts to farmers when something is going wrong with their crops, as well as a wide range of other automation tools, such as smart robots who work in groups to spray crops and carry out other tasks automatically.

Making all of this happen requires the capabilities that are unique to 5G, such as: narrow band IoT, software radios, eSIM, and network slicing (for assigning the narrow band IoT).

With 5G the service provider can deliver on these needs, acquiring a new breed of high value customer across IoT-driven growth markets, offering connectivity and automation as a competitive differentiator.

Business to Business to Any (B2B2X)

The key element for 5G monetization:

  • Enhanced mobile broadband
  • Ultra-reliable, low-latency communications

B2B2X: Enabling organizations to offer 5G services to… well… anyone
One of the great benefits of 5G is the great flexibility it offers service providers to offer value-added services to consumers, business, service partners, and anyone in between. Moreover, they can leverage their network assets to enable other organizations to offer these services to their own customer base as well. This represents a new wholesale opportunity for usage and quality-based monetization.

Service providers can offer the network as a service to event organizers to deliver 4K video streaming, HD advertising services, VR experiences, and more.

Racing towards 5G monetization
Before the event: catalogue-driven network slice creation. RaceCar orders the new network slice with specific services and parameters. A slice for 4K video, a 360-degree view, and HD advertising is created in just a few hours. The service provider sets the limits and business rules. The RaceCar app is hosted at the edge of NxT’s network.

During the event: closed-loop network slice creation. As the event unfolds 4k and VR streaming traffic explodes, impacting other services. A new slice is created on the spot for video streaming, per business rules and the catalogue.

For example, the RaceCar company is responsible for the promotion of the RaceCar World Championship and exercising the sport’s commercial rights. They operate the RaceCar World app with a free and premium version, but now they would like to enhance the service with ultra HD, VR support and low latency mobility so their customers are never behind the race.

NxT Communications can offer RaceCar a dedicated network slice as a service and hosting of their application at the edge of the network. With edge computing, where the applications are at the edge of the network — the service provider can ensure the high reliability and low latency that these enhanced experiences and services require. NxT can also offer other business systems as a service like secure payment gateway and billing as a service.

Through this B2B2X business model, RaceCar owns the relationship with the customer, is the one to deliver the experiences, but pays for the wholesale connectivity, edge comuting hosting fees, any API calls they make to the network or BSS systems and any other as-a-service capabilities they consume.

5 Business Enablement System Must Haves

Now that we have understood the opportunity of these 5G business models, we need to understand the technology enablers required to monetize those opportunities:

  • Monetization-specific features and capabilities: with API calls, edge computing capabilities; network slicing monetization capabilities; the ability to monetize QoS; and offering the network as a service.
  • Service launch acceleration capabilities: the solution should enable operators to adopt a failfast mode of operations, real-time pricing of new services and features with fast and easy price plan configuration, and be able to automatically sequence launch activities.
  • Partner platform features: it should be open for fast, self-service partner onboarding, with exposed APIs for automation, and standardized APIs for accelerating service launch.
  • Infrastructure features: virtualized, automated, cloud-native, micro-services based, DevOps driven, and always on.
  • Intelligence: combining artificial intelligence, machine learning, and big data analytics for greater segmentation granularity, the ability to identify high value target market segments; and conducting accurate business opportunity evaluations.

Source: 5G Monetization: From Use Cases to Business Models: Insights from practical use cases and the key technology enablers by amdocs

    Ads Blocker Image Powered by Code Help Pro

    Your Support Matters...

    We run an independent site that\'s committed to delivering valuable content, but it comes with its challenges. Many of our readers use ad blockers, causing our advertising revenue to decline. Unlike some websites, we haven\'t implemented paywalls to restrict access. Your support can make a significant difference. If you find this website useful and choose to support us, it would greatly secure our future. We appreciate your help. If you\'re currently using an ad blocker, please consider disabling it for our site. Thank you for your understanding and support.