Private networks--perhaps especially those using 5G--are expected to be a “big thing,” but we are in the very early days of deployment. The Global Mobile Suppliers Association counts only some 400 organizations deploying private 4G or 5G networks.
source: GSA
AT&T Private 5G Edge--now under development--allows enterprises to more easily set up internet of things edge computing networks based on Microsoft Azure multi-access edge computing.
“A feature we are working on for AT&T Private 5G Edge is the ability to roam off these private networks but still stay connected via AT&T’s U.S. public mobile network,” AT&T says.
For example, a hospital might use its private network to precisely track ventilators, wheelchairs, and other critical items in its building. But if a ventilator gets loaned to another hospital, that feature ensures the “roaming” machine always remains accounted for even outside the private network, AT&T suggests.
AT&T also runs its 5G core using Azure, so in a sense, AT&T Private 5G Edge will be running on an AT&T 5G core network that uses Azure cloud computing infrastructure.
The new offering is designed to help enterprises deploy private wireless networks rapidly across radio spectrums, including Citizens Broadband Radio Service spectrum, licensed or unlicensed, and uses the public network to support a private 5G deployment.
The new offer from AT&T and Microsoft creates private 5G networks using public network resources. Logically, the network is private. Physically, the private network is built using public network resources.
ABI Research believes “5G network” capital investment, by about 2036, could rival mobile operator capex on the “public” network. Keep in mind that forecast includes what enterprises spend on infrastructure to create their own private 5G networks as well as what mobile operators spend on public 5G.
That spending includes support of private and enterprise networks “on the premises” and “indoors” instead of being spent on the outdoors infrastructure. What is not yet clear is how much of that investment will create private 5G networks using public network resources, and how much is invested building private 5G networks on a “do it yourself” basis.
source: ABI Research, Enterprise IoT Insights
It is one more example of how virtualized public networks create new opportunities for use cases and applications.
source: Janakiram & Associates, Forbes.
Our terminology and thinking evolves as edge computing evolves and we might, in some cases, be overthinking the concept.
Not all edge computing requires use of the public networks. “Micro edge” computing does all the computation directly on a device microprocessor. “Mini edge” computing also runs autonomously from the public network, but at the device level.
“Medium edge” uses a cluster of edge machines, while “heavy edge” runs gear in a data center rack. In addition to MEC, which supplies computing someplace outside the enterprise premises, but within a regional location, some refer to “cloud edge,” which is the running of distributed functions at a remote location beyond the metro region.
Mobile service provider interest in internet of things connections is driven in substantial part by the sheer number of projected devices to be supported.
IoT Analytics expects the global number of connected IoT devices to grow nine percent, to 12.3 billion active endpoints. By 2025, there will likely be more than 27 billion IoT connections, the firm estimates.
But there are lots of nuances. Perhaps 22 million of the projected 2025 connections of 27 billion will use some short-range technology, not the mobile or other specialized networks, or fixed networks.
In other words, up to 80 percent of IoT connections will use local or personal area networks, not the mobile--or some other network--for access. So new revenue will be an issue, even as huge forecasts are easy to find.
Most of us are familiar with the 80/20 rule, which suggests that roughly 80 percent of value or outcomes are generated by about 20 percent of actions. Formally, it is the Pareto theorem.
Pareto applies to most aspects of the connectivity, data center or computing businesses. It even applies to revenue generated by mobile cell sites. Half of mobile revenue is driven from traffic on about 10 percent of sites. Fully 80 percent of revenue is driven by activity on just 30 percent of cell sites.
Beyond cell site revenue generation, mobiltiy has been altering global telecom revenue patterns for decades. And while a classic Pareto distribution has not yet been reached, we seem to be moving closer. Fixed network revenue continies to grow, but not as fast as mobile revenue increases. On the cost side, heavier fixed network capex is driving less growth, compared to lighter capex for mobile and faster revenue growth.
Over the next 10 years, we might see a closer fit between Pareto theorem suggests and what global telecom revenue shows.
Pareto also seems to apply broadly to global connectivity provider revenue and profits as well. Annual global connectivity provider revenue has been estimated at about $1.5 trillion for 2021 and 2022 (including video entertainment subscriptions).
But as much as $820 billion to $1.1 trillion in revenue is earned from mobile services. Being conservative, assume mobile revenue globally is $820 billion, while total revenue is $1.5 trillion. That implies mobile represents 55 percent of total revenue.
At the same time, one can note that fixed network data revenues were about $400 billiion in 2020, while voice contributed about $170 billion, for a total of about $570 billion, or 38 percent of total revenue.
Globally, most people using the internet do so using the mobile network. Most people in developed regions have access to both fixed and mobile modes. The percentage of people using fixed internet access alone is almost too small to measure.
The “mobile-only” pattern of internet access has been in place for close to a decade, as mobile internet usage began to spike upwards since 2010, to the point that half of all the world’s people were using mobile internet by the end of 2019, according to GSMA figures.
The shift of subscriptions from fixed to mobile happened about 2002.
At the same time, one can note that fixed network data revenues were about $400 billiion in 2020, while voice contributed about $170 billion, for a total of about $570 billion.
On the other hand, capital investment for the fixed network was about 68 percent of total in 2021. So you see the pattern: nearly 70 percent of capex to generate 38 percent of revenue. Conversely, 30 percent of capex spent on the mobile networks generates 55 percent of total revenue.
Though not an idealized Pareto distribution, the distribution of revenues and capital investment is beginning to approach the Pareto distribution. .
For as long as I can remember, calls have been issued that connectivity service providers are missing out on revenue opportunities from small and mid-sized businesses.
Looking at 5G revenues, for example, BearingPoint and Omdia point out that up to 99 percent of all businesses globally are SMEs, though connectivity providers focus on enterprises.
That is an “untapped” opportunity, they argue. That is misleading.
Omdia’s own data show that 63 percent of mobile operators believe large enterprises will generate the “most” 5G revenue.
Omdia’s own data also suggest that 54 percent of service providers believe SMEs will generate the “most” revenue. That is hardly neglect, as 32 percent of respondents believe consumers will generate the “most” revenue from 5G.
Keep in mind that mobility has, since the 2G era, been built on consumer revenues, not revenues from business.
But there are other reasons why smaller businesses are not specifically targeted. The cost of sales and buying behavior is virtually indistinguishable from the behavior of consumer customers.
In the U.S. market, for example, 83 percent of all businesses are “micro” sized, having no more than nine employees.
“Small” firms with 10 to 99 employees represent 15 percent of all businesses, while “medium” organizations with 100 to 499 employees represent just two percent of entities.
If enterprise is targeted directly with field sales, then “micro” (83 percent of business entities) are marketed through the mass market channels. “Small and medium” organizations tend to be marketed to by partner and channel entities. Think of the role played by resellers and system integrators and distributors in the computing hardware business.
So some of us would argue that mobile operators are not neglecting SMEs. They sell using mass market techniques tot he 83 percent of customers that behave like consumers when evaluating and buying 5G services.
They use channel partners to sell to the mid-market. And they have dedicated field and inside sales teams to sell to enterprises.
One can argue that more internal resources should be devoted to direct sales efforts for SMEs. But cost of sales is an issue. In many cases, the financial return from higher sales and marketing cost expended on most “small or medium” customer accounts would generate a zero to negative financial return, compared to using channel partners.
All of us have to define our terms: what is “small;” what is “medium” and what does that mean for marketing, sales and requirements?
Also, are we talking about “new revenue sources” or “total revenue generated by segment?” It might, for example, prove to be the case that much “new use case” revenue is generated by enterprises, as they will be the entities deploying large internet of things and sensor networks.
Those are non-phone revenues. But phone revenues might still be led by consumer users, as historically has been the case.
The issue is “which are we talking about: new use case revenues or total or segment revenues?
Either way, though, it might be hard to make the argument that most of the return is going to come from SMEs, as compared to consumer or enterprise revenues.
Different portions of the 5G spectrum might well turn out to drive different revenue opportunities for mobile operators, a new report by GSMA might suggest. Evaluating the importance of mid-band spectrum, the report suggests that mid-band will be most important for bandwidth and coverage, compared to low-band assets, while millimeter wave spectrum will be most valuable for short-range, low-latency use cases.
As you would guess, mid-band spectrum is the key for 5G services, playing the biggest role in end user bandwidth, fixed wireless, mobile IoT and ultra-reliable short-range communications.
source: GSMA
Fixed wireless is projected to provide nearly a third (32 percent) of global gross domestic product value generated by mid-band 5G spectrum; providing value, greater than internet of things or ultra-reliable connectivity use cases, according to a new report by the GSMA, and trailing only “higher bandwidth” in impact.
If that proves true--or if fixed wireless creates that much revenue for mobile operators, it would be an early example of unforeseen and important new use cases for a next-generation network. That almost always happens with mobile next-generation platforms.
“Fixed wireless” does not generally get mentioned when the benefits of 5G are discussed. The traditional triad of enhanced mobile broadband, massive IoT and low latency use cases does not include fixed wireless.
So 5G fixed wireless--if it emerges as expected--will be a very-important early-stage 5G revenue enhancer. In fact, fixed wireless could well generate more near term revenue than does edge computing, internet of things or private networks.
“For the period 2020 to 2030, almost 75 percent of the benefits of mid-band 5G will come from enhanced mobile broadband and fixed wireless access use cases and related applications,” a new report by GSMA argues.
That would be a big deal.
In the fourth quarter of 2021, 47 percent of web traffic in the United States originated from mobile devices, Also, over half of web traffic worldwide was generated by mobile devices in the same quarter, according to Statista.
In large part, that is because, in many parts of the world, the mobile device is the way people access the internet.
Next Generation Mobile Networks Alliance says four use cases The group identified four key use cases or capabilities presently seem most germane for guiding the development of 6G mobile networks.
Enhanced human communication such as immersive experience, telepresence and multi-modal interaction.
Enhanced machine communication for sensing the surrounding environment and the need for robots to communicate among themselves and with humans.
Enabling services such as high accuracy location, mapping, environmental, or body sensing data.
Network evolution to include artificial intelligence (AI) as a service, energy efficiency and ubiquitous coverage.
This approach of identifying important use cases was used to guide the development of 5G, the NGMN says, using the same approach in its thinking on 6G.
But the group itself notes that, with respect to 5G, “changes in services and consumption have influenced network developments in ways that were unforeseen when 5G use cases were proposed.”
At this point, it is equally possible that the designed-for use cases are not those the 6G network will be called upon to support.
Compared to 5G, 6G--to support the identified use cases--might therefore require a network able to use new higher-frequency bands and a new air interface natively supporting localized coverage and short ranges.
The 6G network could also require the ability to coordinate service delivery to multiple devices simultaneously, using a variety of media types.
The 6G network should be better able to predict activity, rather than merely responding. Three-dimensional positioning and tracking capabilities also are a desired capability (think control of unmanned aerial vehicles).
Real-time mapping also is a desired feature. Also, better support for artificial intelligence functions is desirable, especially to integrate sensing, communication, learning and computing.
The ability to integrate non-terrestrial platforms also is expected.
Cohere Technologies markets a Spectrum Multiplier platform that improves the spectral efficiency of any generation (“any G”) mobile network by “as much as two times,” the company says.
The 3GPP-compliant software Cohere’s Spectrum Multiplier software can be integrated by network equipment suppliers in their radio access gear or as a cloud app, Cohere says.
Vodafone has tested the Spectrum Multiplier using open radio access network (O-RAN) interfaces and “immediately doubled the capacity of their cell site,” says VMware, which also participated in the test as the supplier of the O-RAN platform.
Cohere says its software works by “overcoming the complexity of accurate channel estimation and prediction,” reducing roundtrip latency. That is said to be a big issue for multiple input multiple output radio systems, which by definition use arrays of antennae and therefore “create” the task of coordinating the operation of the multiple radios.
Channel estimation essentially is a process of comparing a transmitted signal with a received signal to determine the channel’s performance parameters (noise, phase shift, attenuation), if I can summarize estimation correctly.
Cohere says its “work in the Delay Doppler domain reduces computation complexity through concise channel representation.”
AT&T has joined the Ericsson-sponsored Startup 5G program. The 40 or so startups presently featured in the program develop various 5G scalable services, devices and applications. The Startup 5G program is designed to allow mobile operators to bundle and offer the value-add services.
Other participants include Three Ireland, Telstra, Etisalat, Mobily, Rogers and Celcom.
The startups include firms focusing on e-sports streaming; gaming; augmented reality entertainment; virtual reality headsets; a live streaming camera; lossless music streaming; virtual fashion and augmented reality authoring tools. Most of the firms offer apps related to AR games and entertainment.
At this point, experimentation is likely the greatest value for the mobile operators, allowing them to test consumer demand and perceived value of the gaming and entertainment features or devices.
The hope might be that the participating operators discover a scalable feature to package more widely with their 5G service offers.
At least when it comes to managing internet of things device connectivity, T-Mobile and Deutsche Telekom have launched a solution for IoT connectivity, platform management and support.
Called T-IoT, the service offers one global team and one global solution to manage all public service provider mobile IoT connections, including NB-IoT, LTE-M, LTE, and 5G.Network connectivity will be available across 188 destinations, on 383 networks worldwide supporting NB-IoT, LTE-M, LTE and 5G platforms, the firms say.
The service does not claim to support all connections, such as fixed network, unlicensed solutions or low-power wide area networks.
The service offers a single pane of glass to easily view, and eventually manage global IoT connections across several platforms, including T-Mobile Control Center and Deutsche Telekom M2M Service Portal.
The service offers a simplified procurement process that includes streamlined contract and billing, consistent global service level agreements, and customer support, the firms say.
Flexible pricing is touted as a feature. Customers can choose a pay-per-data model or choose from three flat-rate unlimited connectivity packages “across the U.S. and Europe,” the firms say.
Biotronik, a leading global medical device company based In Berlin, supports medical devices using the service to support medical devices in more than 100 countries, the firms say.
A merger between Thailand’s DTAC and True, if approved by regulators, will create a big new market share leader in the mobile services market. The merged entity will need regulatory approval, and is expected to close later in 2022.
The new firm will have market share in the 52-percent range, with AIS--the former share leader--holding about 44 percent share. Together, the two firms will have a near duopoly in the Thai market.
source: Yozzo
Some of us cannot remember a time when most connectivity service providers were “happy” with their billing support systems. Capabilities always seem to lag behind desires. A new study by Nokia confirms this remains the case.
After surveying 100 service providers globally, Nokia found respondents anticipating 60 percent of new revenue will come through B2B2X models and not from the traditional B2B or B2C models.
And that has implications for additional charging and rating capabilities mobile operators might require, to support partner transactions and use cases.
That implies a need to bill anr rate transactions, features and usage in different ways, including charging based on delivered quality of service metrics and performance. Pricing might need to be dynamic, based on any variable including time of day, day of week, current demand, latency, availability, bandwidth, payment mechanism or revenue share agreements.
Whales matter, in business, and for just about every business, including the mobility business, which might seem the poster child for a business model founded on scores of millions to hundreds of millions of small accounts. But some mobile accounts are more profitable than others.
For example, the lifetime value of a long-time account is far higher than that of an account with a lifecycle of three years.
Look at expected profit contributions across a firm’s customer base. The first 20 percent of customers will supply the most cumulative profit. The tail of the last 80 percent of customers might contribute almost nothing in that regard.
In the mobile business even consumer accounts are much more profitable based simply on account longevity.
How can a software startup better estimate where its revenue might come from? Nnamdi Iregbulem, Partner at Lightspeed Venture Partners, actually has thought quite a lot about that subject. Basically, it appears the Pareto Principle holds for software startups, across the full range of firm sizes.
“I think people talk about concentration as if there are a couple of companies that have revenue concentration issues, and then the rest are fine,” says Iregbulem. “ It just turned out that literally every company has pretty high customer concentration, not in the sense that there was one customer that was 10 percent of revenue, but in the sense that there was a subset of customers that were a pretty meaningful share, something like 20 percent being 70 percent of revenue.”
In other words, in every industry segment, it is not just “whales” who see Pareto distributions, but firms of every size in every segment. The implications are clear enough: even a smaller firm targeting a smallish niche is going to have its own “whales” (a few customers than anchor total revenues). The same goes for profits.
“It’s a very common mistake I find among investors where they'll meet a company, the company will have X number of customers and the standard ACV (average contract value) will be fairly small because most of their users are either free users or in some kind of lowest-tier version of the product,” says Iregbulem. “But they do have a couple of meaningful customers that are spending real revenue or paying the highest tier of a product or what have you.”
It is not unusual for as much as 60 percent of customers to provide no more than “breakeven” performance, in terms of profitability.
In other words, software monetization is a power law. A power law distribution is a curve that looks like this: most of the results are generated by a small fraction of instances, products or customers. “Rather than the exception, high concentration is the norm in certain verticals (for example cloud infrastructure) or pricing models (consumption/pay-as-you-go) where a "customer" can be as small as tens of dollars per month,” he notes.
In the data center and connectivity businesses, that rule tends to hold as well. A handful of customers anchor demand for global bandwidth and data center capacity. The rule also seems for devices connected to Wi-Fi.
“Combined, the above insights form a mathematical justification for "land and expand"-style go-to-market strategies,” he adds. “Here, land and expand is effectively an indexing strategy: land at as many organizations with as little investment as possible.”
“Every once in a while you'll land a Google, a Facebook, or an Amazon (both figuratively and literally) which will drive a disproportionate share of revenue,” he says.”Even if those customers start off small, any given customer could potentially become quite large.”
Whales matter, in business, for revenues and profits.
