5G, in Italy it will take at least 3 years to see the benefits

5G

5G continues to be a promise with great potential, but to start demonstrating its value in the field in Italy it will take, at best, at least three years. The new research of the 5G & Beyond Observatory of the Politecnico di Milano, which will be presented today during the 5G conference: vision, strategy, contingency, of which sportsgaming.win can anticipate some data, confirms the global criticalities (not only Italian), but also their predictability. It is a bit as if the sector had been the victim of its bulimic need to tell the future, forgetting how much waiting can wear out.

"This is the normal process of a technological innovation that can potentially have disruptive effects and therefore it needs time for all the components to line up ”, engineer Luca Dozio, director of the 5G & Beyond Observatory, assures sportsgaming.win. There are at least two basic themes. On the one hand "we started talking about 5G when the first release was just released, the one linked to the functions of enhanced mobile broadband, which has a greater impact on the business-to-consumer (b2c) market". that the short-term technological opportunities are not yet very clear: whether they are solutions for consumer users or business-to-business (b2b).

"We are therefore talking about a market that seems to have already existed for a few years, but in practice it is in its infancy. Just think that the release 17, that relating to the functionality of massive machine type communication, has not yet been released. Or that the chipsets compatible with release 16 have been available for only a year, that linked to latency, the first really interesting evolution for the industrial world ”, Dozio remembers.

However, some first certainties emerge: the sure success of private networks, the worrying interest of cloud providers, especially from the United States, on the European market and the growing weight of contingency. The latter is more conditioning than in the past. It had never been thought that we could find ourselves without chipsets or devices, that the global scenario was so uncertain, that at the same time the specter of a recession appeared and an adequate number of specialized human resources was also lacking.

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Data on 5G coverage are virtual

Desi and Gsma Intelligence have released analysis coverage which unfortunately do not correspond to reality. Or rather, as the researchers of the Politecnico di Milano explain, "the photograph is misleading, because it considers the coverage obtained with the so-called Dynamic Spectrum Sharing which allows a telephone operator to exploit the 4G frequency spectrum also for 5G". In this way, Italy has a 5G coverage of between 96% and 99.7% of the population, against 65.8% of the European average. In short, the undisputed virtual leaders, but if we then analyze the non-stand-alone 5G coverage (Nsa), according to Infratel Italia, we are at 7.3%; practically among the last in the Old Continent.

The scenario could improve slightly, considering that operators have pushed on the accelerator again since the beginning of the year, but the fact remains that 5G Nsa does not allow any of the promised breakthrough technologies to be enabled. However, the assignment in June of the two calls for the development of 5G networks provided for in the Italian 5G Plan of the NRP gives hope. The first, as is well known, provides for investment incentives for the construction of fiber optic bindings for mobile radio sites; the second favors the creation of new mobile network infrastructures (fiber, infrastructures and electronic components) with transmission speeds of at least 150 Mbit / s in the downlink and 30 Mbit / s in the uplink.

The unknown remains competing networks, which the Observatory itself intends to analyze next year. “For now there does not seem to be any overlap between 5G and other wireless standards, as the needs that 5G can meet cannot be met by other technologies. Therefore the main theme is to understand how long it will take the 5G market to reach full capacity ", assures Dozio.

As usual, for a correct implementation speed it will take a compromise between infrastructural coverage and the birth of an offer market and demand. A key step will be to package standardized services at low cost for SMEs and customized services for large companies.

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Two big driving forces: private networks and Open Ran

From the technological point of view, the tools that are attracting the most attention are undoubtedly dedicated / private networks and 'Open Ran (Radio Access Network). The former are an evolution of what has already been seen with 4G, but thanks to the distinctive features of 5G they promise a series of new, more reliable advanced services. Think of the advantages of "dedicated radio coverage, targeted and guaranteed use of network resources focused on the radio service offered, the possibility of using the customer's cloud infrastructures to create an effective edge (close to the user) architecture".
At the same time, the so-called Open Ran, or the possibility of passing from the old monolithic network architecture managed by a supplier to one made up of several functional blocks managed by several independent actors, is confirmed as a dream that has come true for operators. In fact, "disaggregating the various radio access network functions, together with the possibility of using generic hardware (servers), allows for greater protection of the investment in the latest generation radio networks". It is a matter of costs and freedom of action.

As a matter of fact, hardware becomes reusable also for applications other than radio networks and network functions become a theme of operating costs favored by the competition of the various 5G software functionality suppliers. In summary, costs are reduced and you are no longer dependent on a single supplier. No less important is the fact that the unbundling of Ran "makes it possible to make the 5G mobile network much more efficient from the point of view of energy consumption". In fact, there is an improvement in the efficiency of the power supply and the consumption of the cooling systems of the rooms that host them is reduced. In this way, a reduction in consumption in KWh per Gbps offered is obtained.

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Shared European difficulties

In the European Union, private networks are the main object of experimentation in the b2b market. There are 71 projects dedicated mainly to the manufacturing (46%), logistics (18%) and transport (11%) sectors. Unfortunately, most (76%) are still at the R&D stage, while the others are divided into demonstrators (6%) and almost ready (18%), i.e. with a clear objective but still used in a limited way and therefore far from the production phase.

In summary, there is still no project ready for the market and this confirms the difficulties that all countries have, not just Italy. Among the main criticalities, highlighted by the study: the lack of a mature ecosystem capable of responding to the business needs of companies, the scarce availability of industrial devices to develop use cases, the difficulty in finding a well-defined value proposition that justifies the initial investment.

The so-called b2c suffers from the same implementation delays, even if obviously the European and US markets have concentrated on sectors other than the b2b one. Out of 135 projects, gaming (33%) emerged with cloud gaming as the driving force. Then sport (33%) with the attempt to expand the experience and therefore the use of augmented reality inside the stadiums to display additional information. Art, tourism & hospitality (22%) have focused on enriching the visual experience, always playing the augmented and virtual reality card for the digital reconstruction of historic sites. Finally, education (12%) stood out for the use of multimedia and interactive content even remotely.

The survey also underlines that a risk is emerging for the European market, that is, that the US giants of hyper-scaling and big-cloud quickly conquer market shares that will one day be unassailable, competing for customers directly with operators.

"It is a very delicate moment, which must be faced by the entire ecosystem with the right attention. That 5G is a technology capable of making a difference is now clear, but the question for the near future is who will play the leading role in this new supply chain: companies that traditionally work in the telecommunications supply chain or someone else? ”, Underlines the engineer. Yes, because the big players used to operating on the infrastructures of others (over-the-top, in fact) are likely to enter for the first time and widely in the offer of advanced connectivity interlaced with cloud services (storage & computing) that they already offer.

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Why is 5G in the United States further ahead?

European 4G has always been at the forefront, but on 5G it seems that the United States and some eastern markets have a something extra. The reason, according to Dozio, is partly due to the spectrum policy that has favored experimentation and precisely those private 5G solutions that are enjoying great appeal. Not only. “What makes the most difference in the development of the market is the local economic fabric. Large companies clearly have more spending power, so they are looking to invest to create a competitive advantage, ”recalls the expert. And therefore he should not be surprised that in reality where the economic fabric is mainly made up of small businesses, "it is more difficult to make major investments in projects that still have a high degree of uncertainty".

"In our analysis we underline how the possibility of purchasing spectrum by end user companies is facilitating experimentation, but is not representing a real advantage in the development of the market", adds Dozio.

Although the first US offers are still very simple and unable to fully respond to the needs of the corporate market, "they propose an approach typical of cloud offerings: pay per use, plug and play and with a very limited commitment, both in terms of time alley with supplier that as costs ".

In summary, it is a passepartout and also a catalyst: you begin to familiarize yourself with 5G, the providers develop know-how and an ecosystem of partners, as well as being perceived as key players in this new technology. "This is a very delicate aspect and one to pay attention to, because we are talking about actors who already have a very strong presence with corporate customers, so when the regulation changes also in Europe, these actors could threaten local supply chains", says Dozio.

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Market Italian still in the experimental phase

The 5G & Beyond Observatory foresees an industrial scenario strongly conditioned by numerous variables for the next three years. In the worst case scenario, Italian growth will be very slow since for 2023 many proof of concept projects are still expected, aimed at verifying the validity of the solutions, and only a very small number of proof of processes, characterized by a multi-year time horizon and with higher investments.

In perspective, the former will decrease and the latter will increase "even if most of the projects will remain at the pilot stage". Obviously some sectors such as manufacturing and logistics will evolve more rapidly, while others such as tourism and education will be slower; still others will be slowed down by the lack of investment capacity or because they are tied to past infrastructure investments, such as the world of utilities. Not to mention the difficulty of identifying suitable hardware and devices for project development due to the current historical context.

The optimistic scenario, on the other hand, is based on the possibility that key applications will be identified that make 5G fundamental. "In this scenario, the market would follow the typical growth of the life cycle of an innovation, a curve that has already followed other technological trends, such as the IoT and the cloud, which are now considered market standards", underlines the report.

The estimate is therefore that by 2025 the industrial 5G market could be worth between 40 and 200 million euros. “200 million is not as small as it may seem. Many trends that are now market standards had similar values ​​4-5 years after their commercial launch. Furthermore, as has already happened in other markets, there may be strong pushes from the public actor, just think of smart metering for the IoT market. In this market it is likely to expect similar actions that will help it to develop ”, concludes Dozio.