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This article is part of our Essential Guide: Essential Guide: State of 5G in APAC

How enterprise 5G is playing out in Australia

5G adoption is taking place in the industrial arena and other sectors, but telcos will need to transform themselves and overcome cost challenges to drive wider adoption

This article can also be found in the Premium Editorial Download: CW Asia-Pacific: CW APAC: Trend Watch - enterprise 5G

The benefits of 5G connectivity are often talked about in terms of speed (how quickly a movie can be downloaded) and capacity (improved network performance in crowded places like stadiums), but what does 5G mean for enterprises in Australia?

Sam Saba, head of telco at Dell Technologies in Asia-Pacific and Japan, notes that 5G was initially deployed as an extension of 4G, delivering a significant improvement in capacity and speed, but the full potential of 5G lies in standalone networks.

Telstra, Optus and TPG have all now launched 5G standalone services, offering low latency, high capacity and speeds up to 20Gbps.

Each generation of mobile standards has led to the adoption of new applications, says Alper Turken, senior vice-president for service providers at CommScope in Asia-Pacific and Europe, Middle East and Africa (EMEA) – for example, 4G led to the widespread use of video while 5G’s low-latency capabilities will enable real-time applications.

Enterprise opportunities

Early adoption of 5G in Australia is taking place in the industrial arena, such as in manufacturing, where increasing levels of automation are sought. Robots are now sufficiently reliable but need low-latency communications for maximum usefulness.

“Manufacturers will be first on the ground for 5G applications,” says Turken, adding that artificial intelligence (AI) and big data technologies can also help improve automated manufacturing, especially when combined with low-latency networks.

Another application is fixed wireless, says Saba, noting that 5G fixed wireless can be a substitute and cheaper alternative to fixed broadband.

In Australia, occupational health and safety is an important consideration for the mining industry. 5G’s low-latency capabilities can be advantageous to autonomous trucks and other forms of automation. As miners are already using dedicated 4G networks to connect driverless trucks and other remote applications, they are expected to be first movers with 5G.

Moreover, there are opportunities for Australian miners to sell the 5G-related technologies they have developed to overseas miners – such as those in Brazil – and companies in industries such as transportation, says Ben Panic, regional senior director of telecommunications sales at Red Hat Asia-Pacific.

To illustrate 5G’s potential, Panic pointed to Red Hat’s work with NTT East and Nvidia to equip the carrier’s points of presence with the infrastructure needed for video analytics.

This was aimed at providing convenience stores with a way to use surveillance cameras to detect potential thefts in progress without human surveillance and with minimal on-premise hardware.

The next step was to offer a service that analysed the way customers move around stores in order to provide product placement guidance. Such capabilities could be taken around the world, Panic suggests.

Video analytics can also be used in sectors such as in healthcare and government in areas such as facial recognition, crowd control and traffic management. While such applications don’t require the use of 5G, the high speed and low latency capabilities of 5G will make them more practical.

In healthcare, Turken says 5G will enable further digitisation of healthcare services – not just in terms of telehealth consultations, but throughout the healthcare value chain. Robots connected to 5G networks can also be used to monitor patients and administer medications, says Saba.

As for the financial sector, Turken expects to see more local services using technologies such as blockchain and decentralised finance – and 5G will enable further proliferation of those services.

Moving away from specific industries, Turken says “ultra-low latency from the network will be critical” if the metaverse is to become as pervasive as its proponents suggest. One industry where such immersive experiences could be put to work is retail, says Saba, to allow customers to experience products before purchase.

But despite the promises of 5G, there’s no killer use case for the technology, warns Panic. To monetise their investments, telcos will need to tap the expertise that exists in enterprises in areas such as health or finance, possibly through partnerships with those businesses.

Barriers to adoption

Some of the obstacles to 5G adoption are factors affecting telcos rather than their customers.

Saba says “the race is on”, with all operators setting targets for the roll-out of 5G. But the industry is used to having a single vertical stack for communications systems, whereas 5G is standardised, cloud-native and software-defined. This provides an opportunity for new 5G technology suppliers to enter the market by offering a horizontal function.

The good news is that carriers and enterprises operating their own networks can combine best-of-breed solutions using components from multiple suppliers, but the downside is that it leads to fragmentation, and operators are used to having a single supplier.

One likely response is the selection of a prime contractor to handle the integration of diverse components – something which Dell can do partly due to its mature supply chain, Saba says, noting that Dell is already working with operators such as Optus.

In operating carrier networks, telcos have been using virtualisation since the introduction of 4G because it offers efficiency and cost savings, says Panic. But what has changed is that virtualisation is no longer tied to a single supplier. This has led to a “lightbulb moment” for the industry: open systems that make it easier to work within limited power, cooling and space at edge sites.

A related issue is that carriers will need to transform themselves internally to take advantage of 5G technology, Panic points out. For decades, they have been designing and running their networks in a particular way – on the basis that resiliency is provided at the physical layer.

But the cloud-native model used for 5G builds resiliency into applications and carriers need an architecture that reflects that approach – and that, in turn, requires them to reskill their teams appropriately.

Obviously, 5G doesn’t come free to carriers. Apart from licensing the necessary spectrum, there are also infrastructure and organisational costs.

One way that carriers’ investments could be reduced is through network sharing. This is happening in some markets, Turken observes, and will likely become more widespread. While the idea has some support in Australia, it remains to be seen whether it will become a reality.

Australia’s size and the existence of multiple operators means higher overall costs due to network duplication, unless the telcos agree to cooperate, says Panic.

Working against the carriers (and consequently their customers) is that 5G networks are power-hungry. In addition to increasing the running costs, it makes it harder to operate a 5G network in a sustainable manner, says Turken.

Furthermore, Australian carriers all have legacy 4G networks that 5G rollouts must coexist with.

Private networks also have a part in the 5G picture, Turken says, especially in areas like mining sites where coverage may not be available.

Read more about 5G in Australia

In cases where there is 5G coverage at those sites, if continuing production relies on connectivity, then there is still a case for mining companies to run private 5G networks instead of relying on a third party, says Turken. The same applies to manufacturing, but factories are more likely to be within 5G coverage areas, and that may be sufficient. 

Private 5G – even if it’s provided by a telco – involves extending the network core to the customer’s premises to minimise the added cost and latency associated with tromboning. That might sound expensive, but it’s cheaper than it was with previous generations, as dedicated hardware has been replaced with commodity servers running relevant software.

Even so, Panic expects enterprises to implement private 5G as a service from carriers rather than running their own networks.

One reason is that licensing can be an issue for private 5G. In many areas the available spectrum has already been acquired by carriers, which gives them the opportunity to offer 5G as a service. But regulators can play a part in the mainstreaming of 5G by freeing up spectrum, says Turken.

Similar to the way cloud providers offer platform as a service and software as a service, Panic expects carriers (perhaps in collaboration with other suppliers) will offer not just 5G as a service but also higher-level services such as video analytics delivered over 5G.

But he expects large enterprises will be more interested in 5G as a service than smaller firms, while the higher-level services will be of use to both groups. This means telcos need to understand their customers and identify applications for 5G and related services that are mutually profitable.

Like what happened with the introduction of 3G and 4G networks, network operators are concerned with recouping the amount they paid to acquire spectrum, says Turken, but the absence of many clear-cut business cases for 5G makes that a challenge.

And it’s not just about the network: enterprise customers need suitable devices, applications, and solutions if they are to adopt 5G, he says, and this requires a greater level of maturity from the whole ecosystem, not simply the network operators.

Lots of investment will be needed and widespread adoption won’t happen overnight, but ultimately 5G will be broad-based, all-encompassing and truly transformative, according to Turken.

How transformative? He points to predictions that 5G could add around 12.5% to the country’s GDP, observing that few technologies have that much potential.

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