This blog posts explains what we are doing with SKT this week, why we are doing it, and how other operators interested can do something similar in their markets around the world.
For application developers and new device makers who want to better understand 5G and edge computing in terms they know, we have written an introductory paper — “Everything you want to know about 5G but were afraid to ask”, available for download here.
We’re participating with SKT — the large Korean operator — and others in an “edge” hackathon (see here). We wouldn’t be surprised if your reaction is “that’s nice but why do you think I should care?”
Well, if you’re at all involved with 5G commercialization, we think you should care, and here’s why:
Instantiating a new mobile technology generation (or "G") is complex, time-consuming and expensive (nothing easy about it)
As we get deeper into it, commercializing 5G (demonstrating the commercial value that motivates and pays for the build-out) is pretty complicated (nothing easy about that too).
SKT is one of the few operators that is seriously investing in 5G commercialization rather than just 5G marketing (which lots of operators are starting to do).
So, if, like SKT and MobiledgeX, you’re invested in real 5G build-out, which means finding the value propositions that expose and ignite demand for 5G, you might want to take a closer look at what SKT is doing, and specifically their interest in edge computing, engaging with the developers in their markets starting now and also building out an edge-cloud they can experience and play with.
OK, I’m hoping I have your interest but doubting that’s enough, so let me briefly unpack each of those three claims.
First, the necessary mobile generation dance we all have to play. Global mobile service is remarkable and a great example of what consumer technology should be. We can make phone calls globally, our phones work globally, we’re known globally, and everyone in the supply chain gets paid along the way. Compare that to the use of Wi-FI (or don’t — it’s depressing). All those good things are derived pretty directly from the standardization that underpins the global mobile service system. The standards enable global system operation, the use of standard phones and the ability of operators to purchase equipment from multiple vendors. But the standards come at a price and the price is the long cadence of new technology (e.g., 4G or 5G).
And now for the kicker, and the second point above. The standards have to be defined and finished long before the functionality reaches the market. But then demand for the new functionality has to be demonstrated before the mobile operators can really understand the return beyond empty marketing rhetoric from vendors. The bottom line is each new generation is first a standard (5G is a complete set of standards) with a market promise and then the hope, a business is created that is not more of the same but making less money. At any time, for a new generation, the best understanding of the value proposition. To get a whiff of how complicated, and at times almost whimsical this seems (as whimsical as a trillion dollar business initiative can be) consider that the intent for the 4G generation was changing the global mobile infrastructure from a circuit-switched architecture to a packet-switched architecture. This also improved the broadband service, increasing the possible peak bandwidths that were already available in 3G but there was no real market driver at the time. Smartphones existed from the early 2000s, they just were not very good. The real difference did not come from core telecom but rather with Apple inventing the iPhone and then Google Android democratizing the smartphone concept it encapsulated for others. Telecom scaled the business and credit needs to be given to AT&T for innovating with Apple to introduce it into the channel with a completely different business relationship and created the experience ecosystem we take for granted today.
All of this was unknown while designing the standard. How does that lead back to SKT and hackathons? The answer is simple, or at least about as simple as any of this can be. We’re now at that moment where operators have to decide how much to invest in 5G and how fast. Everyone has toes in the water. Everyone is doing mass advertising about their 5G initiative (and how lame their competitors’ are). The smartphone growth curve is over for telecom, especially in markets with saturation. Value is being created on top and telecom is being commoditized to return more and better bandwidth underneath, for less. The only way to escape is to deliver new value beyond bandwidth and bundling and this requires bundling new value towards new customers and making new money in new ways. With 5G, the new customers that will take advantage of low latency, network slicing, other new capabilities, will be the app developers and device makers, who will embed this capability and value, if they can. If they cannot, they will not.
How is the telecom industry looking in the early days of the next wave of growth? Not so good. Not so innovative. As a recent Ovum Research report clearly shows, looking at 5G through the lens of pricing (making money) SKT really stands out as the operator that’s pushing the envelope, doing anything that is not already available on previous generations (eg. 4G, LTE).
The bottom line is that the more digital services and enhanced differentiation 5G operators include, the more they stand to charge a larger premium. So far, this innovation has been mediocre for the most part. The exception is SKT, the only operator to commercialize 5G-enabled digital services such as VR, AR, and UHD content.— Ovum
So finally — wait for it — how does this come back to an edge computing hackathon? If Ovum’s conclusions are right, and 5G isn’t just more of the same, there is a huge benefit to accrue to the operators that can sort out (and deliver) the real commercial benefit of 5G. The standards are “in the can” and everyone agrees in the need for change, including the people we speak to making applications and building devices. Their only question is whether they can get access to resources, if it is easy to use (as easy as the public cloud) and if it works for their business plans. All businesses want to be as close to their customers as possible. Edge and 5G are inevitable, but how they happen will be decided in the next immediate year(s). The people that engage with the market now will decide how that happens since that is how innovation, change, and leadership have always happened in the past. Once you know the answer and you are not part of it then you are too late.
SKT is out leading that charge, in part by leveraging the MobiledgeX Edge-Cloud, and we couldn’t be happier being part of that. If you are an operator that also wants to lead in the markets you care about, we would love to help you and are happy to share how we are doing this, starting with market discovery, followed and with Early Access Programs and hackathons and finally, with industrialized commercialization across the whole ecosystem. We are happy to share all.
For all operators out there, we appreciate any promotion to the “Everything you want to know about 5G but were afraid to ask” paper. This attempts to translate telecom jargon and promise into something other businesses can understand quickly.
Let the 5G future be discovered, starting now.