The First Steps in Transforming to 5G

5G dominated the headlines coming out of Mobile World Congress 2019 with many announcements of new handsets and network components.  To hear what Cisco announced at Mobile World Congress, read Jonathan Davidson’s blog. 5G is the newest mobile standard that offers a significant increase in mobile broadband speeds and much lower latency.  However despite the overwhelming demand for 5G services, the message from the conference is that will be at least until 2021 we see the densification of early urban fixed wireless pilots and any widespread cellular availability until 2021.

One reason that we are not seeing immediate roll-outs is due to the need to completely re-architecture of the way mobile networks are designed, built and operated in order to enable 5G.  The evolution to 5G is as big as the transformation the shift from circuit switched networks to packet switched networks.

Moving to 5G requires an end-to-end transformation that is cloud-native in design and leverages new technologies in virtualization, software defined networking, X86 based hardware, edge computing and micro services applications.  And all these new technologies need to offer services at scale and with standard telco SLA’s.  5G will result in a complete business and operational transformation for Service Providers.

A good example of the level of transformation is Rakuten.  Rakuten is Japan’s newest mobile network which plans to launch early commercial 5G services later in 2019.  Cisco is the primary systems integrator for Rakuten’s 5G network and the network is unique in that it is the first operator being built on a cloud native architecture that’s fully virtualized from the radio to the core with end-to-end automation of its operations.

Although we won’t see widespread availability of 5G services until 2021, all operators are starting this transformation.

Three priorities for current investment include:

1. Building capacity in transport infrastructure, including 5G Core, backhaul and fronthaul. We are seeing investment in high-density 400G line cards in the packet core that provide the massive scale to meet the demands of 5G.  We are also seeing the build-out of new high density converged access and aggregation networks significantly increasing capacities and functionalities (e.g. network slicing, segment routing, automation) while lowering the cost per bit.
2. Lowering operational costs through automation. Service Providers are investing in tools to lower the cost of operations and accelerate the speed at which they can launch new services.  Cisco Crosswork is a good example of a tool that uses machine learning to detect and predict operational issues and adapt the network for optimal performance.  Cisco Crosswork also provides automation tools which has provided one Service Provider with significant productivity improvement by being able to update 60K routers per night.  Another example is Cisco Network Services Orchestrator which is a tool to accelerate the launch of new services with automated self service and on-demand provisioning.  It is reducing the time to market from months to days.
3. Building B2B services with new go-to-market models and embedded security. Unlike 4G where the focus was on mass-market mobile broadband for smartphones, the early uptake of 5G services is with the business customer where operators believe there is a premium for the innovative new applications that will be created with low latency and increased speed. One example of this innovation is network slicing where an Enterprise will take a slice of an operators’ network to operate a virtual private 5G network.  We also expect Enterprises to be investing in WiFi 6 (or 802.11ax) in late 2019.  This technology is built from a similar technical foundation as 5G and offers higher speeds, lower latency and increased capacity in the enterprise campus.

One of the challenges with 5G is the investment needs to achieve returns in the future.  To alleviate this challenge, Cisco, through its financing arm Cisco Capital, has pledged $5B of financing to be available to help operators through the cash flow challenge of transforming their businesses and building the new networks.  Cisco Capital is also providing its enterprise customers with a variety of payment solutions designed to accelerate the adoption of 5G products and services.

To learn more about Cisco Capital and accelerate your journey to 5G, please check out our flexible payment solutions here.

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