By Matt Hatton, Founding Partner, Transforma Insights
The mobile industry met recently at Mobile World Congress in Barcelona, with the topic of IoT, as ever, a key theme. For the last few years there has been quite a focus on how the latest mobile generation, 5G, can create new opportunities for enhanced capabilities for enterprise use cases, and for Mobile Network Operators (MNOs) to make money. MNOs have invested significant sums in upgrading to 5G, and increasingly in upgrading to a 5G Standalone (5G SA) core network. Much of the promise of 5G comes from the latter, giving MNOs the potential to deliver richer features and functionality including real-time latency, improved reliability, and ‘Quality on Demand’ type features.
In December 2024, Transforma Insights published a report ‘Monetisation of public 5G networks through IoT’ examining the capabilities delivered by 5G and how they can be applied to IoT. This article explores the most valuable technology functions of 5G for enterprise deployments.
Enhanced Mobile Broadband (eMBB)
The eMBB category is the simplest to characterise. 5G uses advanced modulation techniques, over more frequency bands and with better carrier aggregation, than LTE. As a result, it delivers higher data speeds. The theoretical peak rate for 5G SA is 20Gbit/s (downlink), based on a large channel using higher frequency bands, channel aggregation, massive MIMO, and higher order modulation. In reality the user experience is likely to be more like 1-2Gbit/s. The move from LTE to 5G Non standalone (NSA) gives a five-fold improvement in data throughput for the average device. The further move to Standalone gives an additional eight-fold increase in experienced speeds.
Massive Machine Type Communications (mMTC)
The mMTC element reflects the fact that most IoT use cases demand low-cost devices with low power consumption, and therefore long battery life, and therefore a technology optimised for those needs. So far, the most significant activity in regard to mMTC is that it has borrowed LTE-M and NB-IoT from 4G. Both have been co-opted into the 5G standard, including long-term support for both on 5G core networks.
The native 5G technology relevant for mMTC is 5G Reduced Capability (RedCap). Transforma Insights’ view is that the functionality available from RedCap is only optimised for a few IoT use cases, mostly consumer electronics devices such as smartwatches, and low-end gateways.
Further releases, such as the upcoming enhanced RedCap (eRedCap) will help to address some of the challenges and act as more direct replacements for NB-IoT and LTE-M.
Ultra-Reliable Low-Latency Communications (URLLC)
URLLC is envisaged for applications like autonomous vehicles and industrial automation. It is closely associated with 5G SA, as that upgrade allows the delivery of levels of latency perceived as ‘real-time’, i.e. sub-20ms. Therefore, our view is that the overwhelming benefit of URLLC comes with SA networks. However, given how new the functionality is, it is unsurprising that we have not yet seen any significant compelling use cases deployed in meaningful numbers.
Non-Public Networks
The deployment of 5G (and 4G) private networks – known as Standalone Non-Public Networks (S-NPN) – has caught the imagination in the last few years. These take the form of dedicated infrastructure solely for a particular site. The deployment of such networks offers a range of advantages, in terms of control and security.
However, there are significant limitations, including the cost of deployment and operation. As an alternative, and a type of network slicing Public Network Integrated Non-Public Network (PNI-NPN) uses the mobile network operator infrastructure but giving access to a closed user group based on approved user equipment.
The big advantage of this approach is that it removes the substantial requirement for upfront investment as well as needing to manage the network. However, it is delivered using shared infrastructure meaning that there will be contention for network resources, making guarantees over performance more difficult.
Network slicing
Network slicing is one of the key potential revenue opportunities associated with public network 5G SA. It is a technique for dividing a single physical network into multiple virtual slices which are optimised for different functions, sectors, or users. Each slice can be optimised for one or more of the three main Slice Service Types: eMBB, URLLC, and mMTC (as discussed earlier). Transforma Insights identifies five main models for network slices, based on geography, organisation, purpose, time and channel. We expect the dominant approach will be slices based on class of service (i.e. ‘Purpose’), and with significant demand also for dedicated slices for emergency services.
Network Exposure Function (NEF) and APIs
One of the most interesting opportunities relates to exploiting the greater transparency and programmability of 5G networks, delivered predominantly through what is known as the Network Exposure Function (NEF). NEF provides a secure, API-driven interface to expose various network capabilities and services to external applications, enabling developers to interact with the 5G network. This includes QoS management, policy and charging control, network slicing, analytics and insights, and session control, amongst other things. These functions are accessed through standardised RESTful APIs within the 5G service-based architecture, facilitating Cloud-native integration with external platforms.
Future proofing
The final opportunity is a slightly odd one; that the most concrete benefit of 5G is that it will be effectively the ‘last man standing’ as a technology (at least until the arrival of 6G).
Eventually we will see the switch-off of 4G networks in the same way that we have seen the switch-off of 2G and 3G networks in some countries. According to Transforma Insights’ analysis, the vast majority of cellular-based IoT applications do not need the functionality delivered by 5G and would work perfectly serviceably on 4G. However, for reasons of future proofing, many buyers will opt for 5G to support their long-term needs. For example, car makers have been opting for 5G to ensure the longevity of car connections.
To conclude: amazing functionality but a lot of work to do
As noted previously, 5G delivers a strong set of capabilities that have the potential to support some game-changing functionality for IoT. For instance, there is tremendous potential value in being able to support super high bandwidth applications, real-time latency and guarantees on quality of service, and delivering the programmability of the network that open the mobile network up to developers.
The challenge currently is three-fold. Firstly, that the use cases that demand most of this functionality do not really exist; for instance, there is no ecosystem around applications demanding real-time latency because that capability, has never really existed before.
Secondly, in many cases the 5G Standalone capability which is the key to unlocking the value, has yet to be enabled; and most MNOs are reticent to incur that cost in the face of a lack of opportunity. Thirdly, the commercial models around network slicing, APIs, and other functionality are really yet to be clarified. Mobile operators are, correctly, hesitant about an ‘if you build it they will come’ approach. As a result it will be a slow burn for the value of 5G really materialises.
This article originally appeared in the April 25 magazine issue of IoT Insider.
