As we count down the final hours of 2018 we thought when better than day number 365 to look back at our predictions for the year and how we did in all things telecom. And as always we we’ll wrap up with a new set of calls for 2019, which promises to be less a year of epic build-out than important decision making on directions and business models, some in stark conflict.
To begin, you may take a read of last year’s 2018 predictions, but we’ve provided a convenient set of crib notes here:
Prediction 1 – 5G Buzz will Sustain While Network Slicing Hits Center Stage
While perhaps not the wildest of guesses, we said 5G, and especially Network Slicing would be the buzz words of the year. This has certainly been the case. While much was made of Net Neutrality with significant changes to US law early in the year they’ve moved to the use cases and implementation models. Interestingly, and along these lines, we saw shift in focus, from the big picture, mainstream consumer 5G user cases, to a much more focused look at the B2B play. During the period, in both the public space and our own conversations, consensus seems to be that that’s where the big business cases will emerge.
Specifically to Network Slicing now, which as predicted quickly rose to industry darling status, the thinking is that we will need some kind of admission control into the slices in order for any of these lovely, revenue-generating SLAs to be delivered for their various applications. Working from back of the envelope, it’s generally understood that the SLA will constitute the essential exchange and only the real reason why someone would buy a Network Slice.
While much was made early in the year of pie in the sky type 5G/Slicing Use Cases like V2x, AR and telemedicine the first real 5G use cases are focused around Fixed Wireless Access along with Mobile WiFi hot spots. While it’s good to start somewhere, these are truly baby steps that may provide granular capacity improvements but very little wow.
Prediction 2 –Network Equipment Vendors Will Fare Reasonably Well Financially
We saw that after many lull years, and even in pre-5G infancy, the big network equipment providers have not done too badly. While, at the tail end of the year, and particularly to Huawei’s chagrin and Nokia and Ericsson’s benefit, politics seem to be driving both interest and investment. Overall, and even in advance of the 5G’s 2020 sunrise, vendors have delivered more capacity to mobile operators. Dubbed a fully mature network at MWC18, 4G is now in cash cow mode, building upon its reputation as the stable, steady, “adult in the room” of mobile technology. So even while the Dow is in negative territory over the year, with some of the largest single day losses in a decade, companies like Cisco, Nokia and Ericsson have all seen some gains.
Prediction 3 – We Finally Get Social Media (for good and ill)
Our last prediction related to social media usage and the sense that we are only now beginning to collectively harness it’s true power. Of course, this has been a double edged sword, and particularly in the US, both driving progressive social movements from #metoo to NFL protests, gun control and Black Lives Matter, but also deeply into the arena of State-Sponsored Trolling, the breadth and impacts of which came fully to light ion 2018. And with every action there is a an equal or greater reaction. What will these learnings do to change the course of politics running into 2020 races, and what role will the gatekeepers of content, like Facebook play?
To sum up, we were pleased to see that our 2018 predictions hit the targets quite well, but what is in our crystal ball for 2019, the last year of the 10s?
Predictions for 2019
As MWC19 tends to set the stage for the year, we’ll start there. If 2018 was much to do about 5G chips, then there’s a good bet that we’ll finally be seeing some actual 5G end products. While they may not look very different from the out side, with some form factor improvements, the “beef” as were will be on the side of better bit rates and higher video image resolutions. But will that be enough beef to help avert the question. As has ever been the case with telecom, or ICT in general, we’re in a “build it and they will come” user adoption cycle. But given the cautious, even overly so approach to 5G among investors and carriers alike, this promises to show a disappointingly slow march to the next generation.
On the flip side, we have seen, been party to and will continue to observe a growing camp of players looking at the OTT question and how to get 5G into the hands of app developers. Of course, it will be necessary to have an open API (or better yet, published but restricted APIs), in the networks that allow applications to communicated needs and negotiate with the network. These developments have taken center stage in initiatives like TIP that do promise to accelerate development and reduce risk in over investing in technologies that don’t scale well and are sure to see slow rates of adoption. Carriers are getting on the train with this, and can see the value in the ecosystem story. Even if it takes some time beyond 2019 and into 2020 to come to fruition as a major business line, this will surely be one of the dominating topics of discussion for 2019.
Adjacent to this, and supporting the general move to more flexible, virtualized networks, we’ll see a crop of new software vendors popping up to provide core 5G functionality. Part of this development will involve open hardware platforms to help drive down the cost of improved indoor coverage. This will of course find some friction amongst the big OEMs, but we’ve been hearing more than a few carriers voice their distaste for closed systems and single vendor lock-in. Of course macro-coverage will remain in the hands of the major OEMs but 5G growth, particularly at the outset will be about indoor, and specifically B2B use cases.
In this regard, it will be interesting to see how this will all come into plat with WiFi 6, a direct competitor for 5G indoor use cases.
But back to the core, and most interesting to players (like ourselves), is how core functions will be divided into many virtual functions and how those will be enabled, sold and delivered by a fleet of small providers all promising attractive new business models at very low, red ocean type price points. Still, integration to the core will remain an open question, and with it valid concern over who will be responsible if the network goes down? Thus the big coming debates will center around trade offs between CAPEX and integration responsibility and whether to stick with the high costs of old and the baked in assurances from the big guys or a more DIY approach that drives down costs but drives up risk. In the end, it will be a combination of the two, and likely there to serve many niche masters.
Finally, to the bigger picture we see a new world economic order (or shall we say disorder) marked by trade wars, uncertainty and nationalist/populist entrenchment that will bring additional instability, but also new regulations. No question but that the golden days of the Facebooks, Googles and Twitters of the world are behind us. This does not bode well for rapid 4.0-type development, but a more cautious approach in collaboration with authority. Disruption is good, but not at the scale that we’ve seen it with misuse of global platforms that touch nearly every industry. Speed, agility and the license to fail mantras of the valley will be coming into better balance against the demand for trust and block chain technologies will have an increasingly important role to play here. It’s an important balance to strike as Autonomous cars and drones will be seen as new social media platforms presenting new challenges about how they can be safely managed in the public interest. Through the last half of the decade we’ve to one extent or another become the guinea pigs in a large-scale social experiment, much of it based on trading privacy for security, and both privacy and security for free stuff (content, services, applications). Now the pendulum is swinging the other way, and perhaps it’s time for a counter attack in the current, still opaque cyberwar. The question we all should be asking is how to do it, and ensure that the good guys (those with the public interest at heart) will win the day.
Happy new year to all, thanks for reading and looking forward to many great things for us all in 2019!