Disruption of 5G’s Economic Model: This Is How Virtualization Will Empower Indian Telcos

Economical model of 5G in India getting disrupted
Economical model of 5G in India getting disrupted

This is a Guest Post by Mr. Rajesh Mishra, Co-Founder, President and CTO, Parallel Wireless. Peek into the mind of a telecom veteran, and find out what will drive the growth of the Telecom industry in 2019!

5G technology is the biggest buzzword in the telecommunications industry right now. The service providers, across the globe, are vying to take the lead by being the first one to launch 5G services in their respective regions.

A few telcos, like AT&T in the US and Etisalat in the Middle East, claim to have launched 5G services. AT&T’s claims of offering 5G services were challenged by Sprint recently which says that the company is branding 4G network services as 5G. The veracity of 5G launch needs to be taken with a pinch of salt since 5G is yet to be fully standardized.

In India, though the telcos have started experimenting with 5G technologies like carrier aggregation and massive Multiple Input Multiple Output (MIMO), they are grappling with tough questions. To begin with, the industry is under enormous debt, and the telcos have invested a considerable amount in setting up 2G, 3G and 4G networks but are yet to get the full returns from these investments. There is also the question of providing connectivity in the rural segment. There is still a significant chunk of the rural and remote areas which are yet to be connected.

Recently, the  Indian telcos have spent a massive amount in setting up the 4G network and, in fact, are still in the process of extending 4G services beyond the metros and major cities. This focus on 4G has led to an increase in data consumption across the country, but the service providers are yet to get the returns from this investment fully. In this scenario, if now they spend on procuring spectrum for 5G and setting up the network for new technology, they will essentially need to find capital through efficiencies from 4G technology.

It will not be wrong to say that 5G technology demands a different financial approach. Typically, the service providers adopt a layered approach of adding the next generation of technology on top of the existing technology layer in the network. This is counter-productive. It not only adds to the network complexity making it tough to manage but it is also more expensive. A technology that enables them to maximize the returns from the existing networks and also provides them capital for moving to 5G will be crucial to their growth.

The Virtual Leap Forward

As of now the so-called 5G deployment is only about setting up the Radio Access Network (RAN), since the standards for the rest of the network are yet to be finalized by 3GPP. To gain the first mover advantage for 5G, the telcos need to introduce 5G radios in their network and integrate them with the existing 2G, 3G or 4G networks.

However, this is an opportunity for the service providers to virtualize the existing networks to enhance efficiency and bring down the cost of network deployment and management without any impact on the quality. This way they can easily bring down the cost of all generations of deployment, from 2G to 5G. More so, they can move from one generation to the other as per the market demand. Thus they can maximize the value from the existing technology and also offer 5G services to the subscriber without spending a huge amount on adding the 5G layer to the existing network.  

The Software Surge

The recent developments indicate that service providers realize the strategic importance of disaggregating software and hardware components of the network. Telefonica and Vodafone voiced similar opinions at the recently concluded Facebook Telecom Infra Project (TIP) conference. This disaggregation makes RAN open, easy and cost-effective to deploy and maintain. A software-based network supports all generations of mobile connectivity. This is key to get the maximum value from the legacy networks which will help the telcos to move towards 5G cost-effectively.

This approach will allow the service providers to unify all generation of technologies and will do away with the need to spend a considerable amount on new equipment and infrastructure. The service providers who take this road to 5G will be able to reach their journey in the most cost-effective manner.

Parallel Wireless, is an end-to-end connectivity solutions provider enabling carriers to deploy any G cellular networks as easily and as cost-effectively as enterprise Wi-Fi whether for the rural, enterprise, public safety, M2M, Smart Cities, or dense urbanCurrently, the company in production deployment or in trials with major leading operators on six continents. In a market marred with Urban-Rural divide, Spectrum scarcity, Regulatory uncertainty, Challenges of the low ARPU Rural market, growing OPEX and CAPEX costs for Telcos, PW is working with some of the leading telcos in the country.

Also Read: Top 3 Trends For Telecom Sector Which Can Change Everything In 2019

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