Intelligence Brief: Do manufacturers really need 5G, IoT?

September has been a manufacturing month.

Earlier in the month, GSMA Intelligence hosted a webinar [1] discussing whether manufacturers have the appetite for new services, with panellists from Reliance Jio, Verizon, AWS and Siemens, a good mix across the IoT ecosystem, with Mobile World Live holding a broader Themed Week [2] on Smart Manufacturing and Industry 4.0.

And, what did we learn? Not only during our webinar but also during the entirety of the manufacturing week? Can I do it in six takeaways?

Long lasting impact of Covid-19
It is hard to ignore what is currently happening around the globe and how the face of manufacturing will change forever, emphasising the need for digital transformation. But, Azad Singh, chief of global mobility solutions at Reliance Jio, also stressed the importance of minimising human presence at manufacturing facilities. The consensus is the current crisis amplifies the need for flexible manufacturing (easily adapting to changes) and the need for different types of data to be collected and analysed. The ability to remotely monitor and access manufacturing plants has never been more important, not only to achieve business benefits but also to save lives. We’ve highlighted the impact of Covid-19 (coronavirus) on the manufacturing sector in a recent research piece [3].

Data is key
As I’ve written time and time again, IoT is all about data: it is key to digital transformation. Throughout the week’s sessions, the need and demand to collect data came through strong. Devices and assets are being connected (using multiple technologies) to collect data, and run the analytics in order to improve processes. Welcome to the virtuous cycle, where the more data is collected and analysed, the more benefits can be achieved. It is not surprising that the most deployed manufacturing IoT solutions are data driven to control for quality, enable automation and simplify management of supply chains, systems and machinery (see chart, below, click to enlarge). Of course, we see the inherent value in data from the fact our Enterprise in Focus survey shows 50 per cent of manufacturing companies already use AI/ML. Why? Making sense of data is what helps enterprises to achieve business outcomes. [4]

Partner for success
The role of partners coming together has been echoed throughout the recent news, but also the examples from the week, be it Supermicro and NodeWeaver showcasing how they address the intelligent edge, or Ericsson and PTC discussing their joint go-to-market proposition. The week’s overall sentiment was that working together enables futureproof investments and allows companies to learn from one another’s experiments. This was also a key take away from our panel discussion [5] on how to best digitise manufacturing: each vendor might have bits and pieces of a solution, but solving a problem together is key, Khondoker Huq, global head of marketing strategy, IoT at SAS pointed out, and brings the value to customers TTTTech Industrial Automation director of product management IoT, Alexander Bergner noted. During our webinar, Douglas Bellin, business development executive, Industry 4.0 and Smart Factory for AWS, further exemplified that customers are asking for best practice and examples so they can accelerate deployment and succeed faster.

Start early
While commercial 5G use cases are still a way away, Moiz Badri, IIoT product manager at Verizon, recommended to start now to understand how to use data. Providing real-life examples of how 5G IoT can benefit enterprise operations is key. Verizon and AWS illustrate this: they partnered to engineer and design a solution to enable edge computing on the Verizon 5G network, supporting mission-critical applications not previously possible, including autonomous industrial equipment and smart factories. There will be different modes of 5G deployments ranging from network slicing to dedicated private networks, but testing and finding the optimal way to deploy 5G should already be on the roadmap. As Chris White, Ford Motor Company 5GEM project lead explained, the car maker’s recent 5G private network partnership [6] with Vodafone UK allowed for flexibility from a data perspective compared with a hardwired approach. Foxconn [7]’s chief business officer Richard Vincent highlighted the wired/Wi-FI networks aren’t always the best at collecting real-time data from his experience. As existing LTE-based private networks will move to 5G, they do address the need for security and robustness and, what is becoming ever so important, collecting data in a flexible way from moving equipment.

Edge to the rescue?
Historically, manufacturers were resistant to moving their data into the cloud, thus cloud adoption in manufacturing is still relatively low. The Covid-19 pandemic, however, has highlighted the need for remote access and cloud enables just that. Enterprises are increasingly sending data to the cloud, training models there, but making decisions at the edge to empower agile operations. And it isn’t surprising recent months witnessed a slew of activity in the space, with cloud providers partnering with operators to capture the edge opportunity, for example:

AWS Wavelink partnership extends beyond Verizon and includes Vodafone, KDDI and SK Telecom
Microsoft Azure edge zones with operators including AT&T; Rogers; Vodafone; Telefonica; Proximus; SK Telecom; Telstra; NTT Communication; and Etisalat, just recently pulled into Operators for Azure umbrella
Google Mobile Edge Cloud, which includes AT&T, TIM, Telefonica and Orange

Mobile operators themselves are keen to explore this opportunity via The Telco Edge Cloud (TEC) platform formed in March 2020, which looks to become a digital one-stop shop. The go to market strategy isn’t fully formed yet but GSMA seeks broad market input from companies who expect to benefit from edge cloud services; so if you identify yourself as such please participate in this survey. [8]

Think outcomes not technology
Michael Zeto, SVP of Boingo Wireless [9], summed up much of our thinking when he said enterprises buy outcomes not technology. While discussing the factory of the future he also sees a mix of private networks, CBRS and edge enabling value delivery. Starting the conversation from the technology standpoint, however, isn’t what enterprises need. Jan Pawlewitz, SVP consulting, Digital Enterprise and Services at Siemens, pointed to the fact enterprises are thinking of business case and value, therefore it is important for vendors to demonstrate their ability to do the heavy lifting and help to build the business case. To this end, Kiva Allgood, head of IoT, Business Area Technologies and New Businesses at Ericsson, flagged the necessity to focus conversations from proof of concept to proof of value.

I couldn’t agree more.

As per our Enterprise in Focus Survey, custom-made products from one provider come out on top, since these make it easy for enterprises to deploy solutions which address their needs but also to realise cost saving as enterprises look to rationalise spend and consolidate their suppliers, favouring single end-to-end suppliers. Vendors recognise this: Steve Dertien, CTO and MD of the office of the CTO at PTC said they need “a trusted IoT partner”. This requires partnerships and cooperation between ecosystem players to enable just that.

– Sylwia Kechiche – principal analyst, IoT and Enterprise, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Is Czech Republic ready for 5G?

As a part of our blog series this year, we have looked at Sri Lanka [1], Taiwan [2] and South Africa [3] to study how suited they are for launching 5G.

Our next market in focus, the Czech Republic, exudes such readiness given its sound 4G adoption (see chart, below, click to enlarge). What makes the country particularly interesting, though is an existing need of 5G in in support of Industry 4.0 aspirations.

With three established players (T-Mobile, O2 and Vodafone), in Q2 the Czech Republic had around 14.8 million mobile connections, mobile penetration of 138 per cent, mobile broadband penetration of 80 per cent and 4G network coverage of 99.6 per cent.


Needless to say, the country exhibits impressive statistics, serving as a solid foundation for 5G. To that end, a steady shift towards 5G is predicted, with connections penetration forecast to reach 22 per cent by the end of 2025, which is quite impressive relative to other European Union (EU) countries.

Beyond any 5G foundations, the latest developments from the country’s operators and regulator show how momentum is accelerating to help bring 5G into the mainstream.

Operators’ strategies
O2 Czech Republic became the first operator in the market to launch commercial 5G services in July, during the pandemic, by refarming existing LTE frequencies in the 800MHz, 1800MHz, 2100MHz and 2600MHz spectrum bands.

Vodafone, in turn, announced it would disconnect its 3G network by Q1 2021: it expects to use the frequencies more efficiently allowing additional available bandwidth for 5G as it stands ready to launch a network in October.

Industry 4.0 focus
Along with these on-going developments, the Czech Republic is joining only a select few EU countries in reserving spectrum for enterprise use.

The regulator is promoting Industry 4.0 by reserving a spectrum block in the 3400MHz to 3600MHz band specifically for its deployment by enterprises. The holders of these blocks will be obliged to allow the industry an independent use of the radio frequencies.

Now, the key questions are why does Industry 4.0 matter so much for the Czech Republic and what role will 5G play?

The answers lie in the importance of the manufacturing sector, which contributed 32 per cent to the nation’s GDP in 2019. The booming industrial sector now leads all other sectors in terms of employment and gross value added. However, two key challenges threaten this success: an increasingly acute labour shortage; and low productivity, which is pushing the nation into a middle-income trap.

Technology and automation can possibly address the above challenges, delivering digitised production lines and robotic systems in support of smart factories. The development of such applications and platforms, of course, will largely depend on the existence of fast, reliable and high capacity networks. Offering low latency, high speed and throughput 5G, then, promises to be the technology which will enable Industry 4.0.

But what do operators need to be conscious of in the push for Industry 4.0?

Simply launching 5G won’t be enough to make Industry 4.0 a reality. Operators need to be proactive on the following areas to get a leading advantage.
• Partnership and collaborations: It is critical to develop strong collaborations with vendors, other ecosystem players like software and platform companies, and also with manufacturers to establish more 5G use-cases for industry and for the application of smart factories
• Early trials and developments in manufacturing: As important as the right partnerships are, equally important is leveraging those partnerships to run trials of applications and solutions in Industry 4.0, such as automation, data analytics, AI, Robotics, Drones and so on. This provides an opportunity for the Czech Republic to lead other countries in Industry 4.0 developments and specific use cases within its domain. Likewise, early efforts will help to work through inevitable technology teething pains
• Don’t let auction delays stop you: If auctions experience a snag, service providers have good prospects to replicate what operators in other countries did by not waiting and launching 5G without dedicated spectrum, using existing frequencies to get moving on the path. This will offer operators a window to continue planning networks planning and use cases well in advance of long term spectrum rights.

The Czech Republic’s telecom landscape is robust and appears ripe for 5G launches. Moreover, the existing requirements of Industry 4.0 and the ability of 5G networks to deliver on those promises clear synergies. The manufacturing sector gains by automation and reduced labour dependency. Operators, meanwhile, benefit from a new customer segment (manufacturing) and can better support consumer demands at the same time.

The nation presents an opportunity to offer some of the interesting developments in Industry 4.0. What is required, at this juncture, is for operators to act quickly and work towards partnerships, and expedite 5G launches as the technology can serve as a much-needed boost to the sector coupled with lift to the economy.

– Bhawna Jain – senior research analyst and Akanksha Hira – research analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Has China Mobile set the model for commercial 5G private networks?

In the 18 months since 3GPP Release 15 was frozen in 2018, operators and equipment vendors have focused their efforts on conducting technical feasibility tests with B2B customers to uncover the network capabilities required to support real-life industry applications. In July, China Mobile moved past technical tests to announce its commercial offering for 5G private networks. What is noteworthy here is China Mobile has simply started the first of many iterations of such service bundling by operators. Expect tighter identification of business needs in coming months: having an actual offering gives buyers and sellers a focal point from which to evolve the 5G private networks portfolio, sifting through what is good to have and what is absolutely essential. Longer term, expect the dust to settle to reveal operator winners in 5G private networks.

What is China Mobile offering?
In the classic convention of using mnemonics to label packages in China as 1+N+X, China Mobile modelled its 5G private network offering into three packages, guided by six typical network requirements and four services capabilities, id est: One network; N combinations of menu components; and X technologies.

To customers in China, this offering becomes the first time they see what and how they can buy a 5G private network. In this case, they select their packages based on three levers of pricing: network speed; extent of private network requirements; and the business value expected from the network. They pay based on well-understood network parameters including bandwidth, speed and number of connections.

What is new to B2B customers, however, is the ability to pick the types of services they need: a menu of four network services that should align to the business value expected from the network. First, network design services are structured to meet network customisation requirements including the option to help B2B customers understand different network deployment model options. Second, network optimisation services include the traditional wireless access optimisation as well as the cloud-native core network. Third, network operations and maintenance services are as described, network monitoring and predictive maintenance, but also includes SLA queries that are essential for service guarantees. The final network service is service guarantees, with the usual round-the-clock service support, but also guarantees for seasonal peak traffic patterns and incident response capabilities.

What is new about China Mobile’s offer and why does it matter?
Comprehensive services portfolio: China Mobile’s offering reflects their B2B ambitions not only from their desired technical leadership position but also from their aspirations in delivering associated services. Judging by China Mobile’s more than 18-month efforts to get to this point of a commercial offering, we can infer they are ready to deliver these services and hopefully to profit. Indeed, the addition of the word ‘service’ is an important distinction in identifying the winners in terms of the addressable market for 5G. Using GSMA Intelligence IoT revenue forecast methodology, the 2025 IoT market size will reach $900 billion, of which connectivity makes up only 5 per cent of the total market. Any 5G uplift to an operator will have to come from additional professional services as well as other solutions such as platforms, analytics, security and applications. A proposition with both network and services capabilities shows an operator’s ambition to compete with not only their peers but also the wider technology players such as system integrators, industry engineering services companies, and consulting/business processing outsourcing companies. Other market-leading operators will now have a known commercial offering to fine-tune their propositions.
Pick and choose menu: B2B customers now have a clear price book from which to build commercial metrics behind their investments into 5G private networks and considerations for their optimal deployment configuration. For example, it is important to note China Mobile’s offering is organised into an entry level tier of a public network slice in Special; a hybrid option in Exclusive; and a fully dedicated package in VIP. Since there is no one size fits all deployment mode for B2B customers, China Mobile will begin to discover which package will be more popular. For now, Liu Jian, general manager of China Mobile’s Business segment, believes that the middle package (Exclusive) will be more common among B2B customers.

What next for operators?
Iterative 5G private networks offerings: If operators’ M2M/IoT strategies are a good leading indicator of 5G private network ambitions, then we can expect operators to narrow their 5G B2B offerings throughout the next three to five years. This means operators will first cast a very big net to see what they catch and then begin to right size their target customers, reach of partners and breadth of portfolio. B2B customer demands need time to form: currently B2B customers have limited experience to experiment with what and how to buy 5G private networks. Operators will also need practical deployment experience, especially those who offer accompanying services to their network capabilities. To do this, working with vendors on experiments will help with failing fast by leveraging existing references for use cases and best practices to accelerate commercial deployments.
Deliver on beyond core ambitions: To the extent that operators are B2B-focused, professional services such as network services are important to meet customer needs. Our Operator in Focus survey suggests a high proportion of operators self-identify as currently offering 4G private networks. However, revenue reporting thus far suggests operators are not yet offering additional services which are reflected in revenue. Using China Mobile as an example, its H1 business revenue grew 18.4 per cent year-on-year and the proportion of non-connectivity business revenue increased from 29.2 per cent to 37.9 per cent. Strong performance in H1, but the majority of non-connectivity business revenue comes from internet data centres or IT infrastructure. The services revenue from B2B customers is likely insignificant.

Revenue from services-oriented ambitions will take operators years to materialise. Regardless, this transition requires investors who are patient: expect to see more organisational restructure in the coming years as operators align their beyond core connectivity ambitions.

– Yiru Zhong – lead analyst, IoT and Enterprise, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

Intelligence Brief: Have 6GHz decisions been hasty?

On 13 August, the US Federal Communications Commission (FCC) published its response to petitions made by public safety and utility companies to reconsider a decision to open up the entire 6GHz band for unlicensed use. A day later, Aviat Networks (a microwave network equipment company) announced the results of its tests on the effects of unlicensed device use at 6GHz on microwave point-to-point links operating in the same band, showing some interference for incumbent users in the band. The next day, a separate FCC filing was made by Google wanting to test a radio system working on the 6GHz band across 26 states in the US.

While you may have missed or decided to ignore these recent pieces of news, they highlight an important mobile dynamic.

The need for connectivity is greater than ever, driving demand for more spectrum
Global lockdowns have emphasised we rely on connectivity like never before. Moving forward, shifts in patterns of work and entertainment will likely accelerate the need for higher network speeds and greater capacity. 5G networks will sit at the heart of a new ecosystem and will deliver a clear step-change in the capability and functionality of networks.

Despite the impact of the Covid-19 (coronavirus) pandemic, the world has now clearly entered the 5G era. As of the end of the second quarter, GSMA Intelligence figures showed 5G was commercially available from 87 operators in 39 markets worldwide. The global number of 5G connections stood at 57 million and will rise to nearly 145 million by the end of 2020, as more markets see 5G launches and adoption levels in the early-adopter markets ramp.

Mid-band spectrum (1GHz to 6GHz) is key for the success of 5G. With the growth in mobile data traffic, a trend set to accelerate with the widespread launch of 5G networks, operators will require access to growing amounts of spectrum to meet demand. While the 3.5GHz band has emerged as key for 5G at a global level, offering the optimum balance of coverage and capacity, the 6GHz band could play a role in the future of 5G, allowing additional access to much sought-after mid-band spectrum

Current and proposed uses of the 6GHz band
The 6GHz band (5,925MHz to 7,125MHz), as recent news suggests, has garnered attention as it is being considered for a number of new uses: licensed 5G and unlicensed uses such as RLAN, Wi-Fi and unlicensed 5G. The band currently has incumbent users including fixed links for mobile backhaul and fixed satellite service. Use of the upper part of the band (6,425MHz to 7,125MHz) will be discussed at WRC-23, with a view to opening it for IMT applications such as 5G.

While some countries are considering using, or have decided to use, the band for unlicensed applications, others have committed to different plans. The US supports unlicensed use for all of the band, while Europe opted for unlicensed use in the lower part only (below 6,425MHz). China, meanwhile, supports the use of the entire 6GHz band for licensed 5G.

Early decisions on band for unlicensed use may be hasty
Looking at the current regulation being developed around the unlicensed use of the 6GHz band, there are already a lot of differences. The most notable are around frequency ranges, radiated power levels, indoor and outdoor restrictions and use of databases to protect incumbent services in band. The lack of coordination is likely to lead to interference issues, with many of the benefits of harmonisation unrealised.

Further, countries that allow unlicensed use of the 6GHz band at this early stage will find it difficult to reverse the decision and clear the band at a later stage. We saw the effects of such a process not long ago in Europe. CEPT’s efforts to clear the 3.5GHz band, move incumbents out and reorganise it have been strenuous. There was an impact in terms of delays in assigning spectrum, which meant some countries could only make available relatively small amounts of spectrum, creating scarcity and driving up spectrum prices. The results of the spectrum auction in Italy where operators paid €4.02 billion for such little spectrum are a bitter reminder.

The case for licensed use is robust
The benefits of spectrum harmonisation are well known and proven. Harmonisation refers to the uniform allocation of frequency bands across entire regions, not just individual countries. Uniform allocation typically leads to a much broader ecosystem in terms of technology, equipment and general engineering expertise. It also promotes confidence among equipment manufacturers and service providers to invest. It ultimately benefits consumers through the realisation of significant economies of scale, lower costs of deployment for operators and rapid rollout of new services. Without spectrum harmonisation it is unlikely that mobile would have become the success story it is today. And that is one of the main reasons why countries try as much as possible to be aligned, with the ITU and WRC leading this important development.

The payback for harmonisation is further complemented by the licensed use of spectrum, which brings two additional significant benefits: greater reliability and better network performance.

While some may argue there is a certain momentum around the new use of the 6GHz spectrum band, it’s important not to overlook some of these important considerations.

A rushed decision now can lead to difficulties reversing further down the track.

– Dennisa Nichiforov-Chuang – lead analyst, spectrum, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

Intelligence Brief: Will fibre fuel European recovery?

European economies are facing a fresh financial slump as a result of the Covid-19 (coronavirus) pandemic. But the silver lining for telecoms is that we are relying on connectivity like never before, with increased data consumption and a renewed focus on network reliability as working from home becomes normal and we see the beginnings of a demographic shift away from city centres. Telecoms is expected to play a key role in economic recovery, with leading industry bodies emphasising that the sector is ready to work with European Union (EU) institutions, national governments and the broader stakeholders’ community to lift the continent out of recession.

A great deal of operator investment in Europe over the past decade has been focussed on fibre rollout, as increased demand for data puts pressure on legacy networks. Operator capex, however, continues to be stretched by the high cost of new technologies like 5G, while facing increasing competition from disruptors and new entrants all looking for a slice of the connectivity pie. Many governments have recognised the importance of fibre and regulation has a role to play. But operators also need to be open to rethinking their investment models and consider partnerships, consolidation or divestment to enable fibre rollout.

The role of regulation
Governments and regulators in Europe have largely recognised the importance of connectivity and made it a key part of management and recovery strategies. Many governments set ambitious broadband speed and coverage targets to incentivise operator rollout. The UK government earmarked £5 billion ($6.7 billion) to bring gigabit-capable broadband to underserved regions, while Spain is directing nearly €1 billion ($1.2 billion) of state and EU funding to connect areas with no current or planned coverage.

But coverage targets need a clear and beneficial regulatory environment in addition to financial support which recognises fibre is key to connectivity. Fixed fibre connectivity offers great network performance and resilience, but is costly and somewhat inflexible. Operators need to consider a number of options to connect their users, including fibre, hybrid options like fixed-wireless access, and mobile 4G and 5G networks. Governments need to acknowledge this and regularly implement and update economic incentive plans for the rollout of high-speed fibre networks.

Fibre at the core of connectivity
Continued growth in fixed and mobile connectivity relies on backhaul options that can keep up with data demand. Fibre backhaul is not just key to fixed technologies like FTTH, it’s the link that connects mobile base stations to the rest of the operator’s network and then onto the internet. It’s important because it has a direct impact on network performance and user experience, such as download speeds and latency. A superfast RAN link from the mobile base station to the user or vice-versa falls flat if the backhaul link can’t keep up.

Fibre backbone is becoming more important as 5G connections increase and networks mature. Operators are also looking to the enterprise sector as it becomes clear the consumer sector will not be able to fund expensive 5G rollouts on its own. Standalone networks promise consistently high speeds and ultra-low latency, but these rely on solid, uninterrupted connectivity on uncongested networks. And the whole range of 5G technologies currently being touted to improve connectivity and network performance, such as open RAN, network slicing, dynamic spectrum sharing and virtualisation, will not be possible without fibre backbone. And new funding models are now needed to facilitate fibre expansion.

Consolidation and divestment
There is no doubt operators need to invest in fibre, but this doesn’t necessarily mean costly network rollout. Europe, in particular, has recently seen a wave of fixed/mobile consolidation. Vodafone Group recognised its limited fibre assets could be a hindrance to network expansion, so embarked upon a number of acquisitions and partnerships in the cable sector with Liberty Global and its subsidiaries. The combination of BT and EE in the UK was largely driven by content, but EE’s 5G rollout will undoubtedly benefit from access to BT’s fibre. Meanwhile in Italy, disruptive new entrant Iliad signed a partnership deal with wholesale operator Open Fiber. Fixed operators are also recognising the strength of expanding their fibre network through consolidation, such as Euskaltel in Spain.

Another important trend is infrastructure divestment. Many European operators are spinning off their tower and fibre assets into separate businesses. Telefonica hived off its mast mobile masts into its Telxius subsidiary, while Deutsche Telekom and Vodafone have separated some of their tower assets and are seeking to sell part of them through a listing or private sale. These divestments improve financial efficiency as the operators can use those assets for their own operations while wholesaling them to others.

Staying agile to boost economic recovery
The need for fibre in connectivity is indisputable and the advent of 5G has made this even more paramount in a Covid-19 world. But disruption in the sector continues from new entrants seeking wholesale access to the mobile and fixed ISPs, low-cost players like Iliad, and outside influences like Google and Amazon.

Operators need to be highly adaptable and stay open to a wide range of fibre expansion opportunities. Governments, regulators and investors also have a role to play in enabling this flexibility, if operators are to be allowed to make the most of expansion opportunities to help drive the economic recovery.

– Tim Hatt – head of research, and Peter Boyland – lead analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.