The 5G network is different from all earlier mobile generations for at least a couple of major reasons. The 3GPP specifications for 5G make clear that 5G will be the first mobile network built on a specific set of core network capabilities, namely virtualized operation and network slicing.
The former should reduce costs and increase flexibility. By virtualizing, service providers gain the ability to use lower-cost network elements and fewer instances where more-intelligent (and therefore more-costly) elements must be installed. Virtualized networks also will support use of lower-cost elements (sometimes open source, often lower-cost off-the-shelf servers) across the core network.
Network slicing will allow creation of virtual networks that can be differentiated in terms of performance. A slice might be created to support a financial or biometric network, for example, requiring additional security features.
In other cases, slices might support ultra-low latency, or higher bandwidth.
But 5G will differ in other key ways, including revenue drivers, customers sets and use cases. Up to this point, mobile networks mostly have supported human users and their phones. In the 5G era, important new use cases are expected to emerge where computers and sensors are the actual “users,” not people.
That also implies that new revenue sources will develop in the enterprise segment of the business, not the consumer segment, as has been the case, up to this point. Yes, consumers will use the 5G network for data access. But that is largely a replacement of 4G usage.
New internet of things apps and use cases are where the brand-new value creation, use cases and revenue are to be found.
In other instances, the mobile network might become a full substitute for fixed network internet access, with higher or comparable data rates, lower latency and equivalent pricing, for the first time.
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