Ericsson: 5G will call for business models that 'go well beyond the individual'

Technologies and networks such as narrowband IoT and various flavors of LTE are already being rolled out to provide 5g connectivity for those use cases.

LAS VEGAS—Next-generation wireless networks won’t be a sudden revolution, but rather an incremental progression of technologies and strategies that are already being put in place today, according to Ericsson’s Gowton Achaibar. But expanding to 5G will require carriers to employ some innovative new business models.

“Our thinking at Ericsson is that 5G is not some isolated event that will happen at some place in time that will replace 4G or make 4G obsolete, or somehow kill off the whole 4G networks that we have today,” said Achaibar, the company’s head of North American operations, in a keynote address at the Competitive Carriers Association’s annual event Wednesday. “In fact, we see the opposite. We see a very synergistic integration between 4G and 5G, and the abilities for the two technologies to work interactively with each other and solve the two specific use cases much more effectively.”

The 5G era will fuel a wide variety of use cases, of course. It will expand coverage and increase capacity compared to today’s wireless networks, enabling carriers to meet ever-increasing demand for data-heavy consumer applications like video and, eventually, augmented reality and virtual reality. It will help drive growth for IoT services that are already gaining traction—such as connected cars and wearables—and will serve as a kind of launch pad for segments such as smart healthcare and connected industrial devices.

Models that ‘go well beyond the individual’

Technologies and networks such as narrowband IoT and various flavors of LTE are already being rolled out to provide connectivity for those use cases. Different scenarios will require different kinds of connectivity as the number of IoT devices surpasses the number of traditional connections in the coming years, and they will also require carriers to offer pricing plans and business models that may differ greatly than the traditional consumer of monthly buckets of data.

“Ultimately, we think monetization models will go well beyond the individual,” Achaibar said. “In the future the 5G networks will probably be designed more to provide industries and other types of vertical solutions that they can leverage. I think we’re moving into the era where 5G is much broader than just a solution for the traditional consumer.”

“You may also have to have a model where you can subsidize the user. So a third-party company, an industrial company, may want to offer a solution to all their endpoints,” Achaibar continued.

A tractor manufacturer, for instance, might be willing to foot part of the bill for connectivity to the equipment that it sells in order to track performance and minimize maintenance costs.

“They’ll be willing to pay for the connectivity to those tractors because the data they collect, and they can do something with that data that will ensure their own business case," Achaibar said. "So I think these subsidization-type models will also become part of the way we need to look at 5G.”

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