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New regulatory models are essential for 5G success – Germany is leading the way.

Recently, we commented on the GSMA’s stated opposition to action proposed by the German regulator. The Bundesneztagentur had suggested reserving some of the available 5G spectrum for industrial purposes. At the same time, it also defined stringent conditions for network coverage for national operators as key requirements for the spectrum auction. Despite objections from traditional MNOs, the auction proceeded as planned.

That’s great news, because we’ve heard numerous industry representatives discussing what they see as special cases for 5G coverage and performance, for which only they can provide solutions. They do not think that MNOs can deliver the capabilities they need.

This is getting interesting. It’s important to note that we are not talking about eMBB here. What industry is waiting for is URLLC and it’s here that the most interesting use cases will be found. URLLC – Ultra Reliable Low Latency Communications – enables a new class of services, with enhanced performance capabilities. It seems clear that the range of such use cases will spiral, as more ways in which to capitalise on the performance levels promised are explored. In this context, it’s unreasonable to expect that an MNO, which already has to deal with millions of individual subscribers, as well as predicted large-scale IoT deployments, can customise services to the extent that it can meet the needs of a growing number of specialised customers.

What’s more likely is that MNOs will, to some extent, up their game to deliver URLLC capabilities, but there will remain a host of specialist cases that are beyond their reach. There’s nothing wrong with this – but it’s also important to note that these cases are likely to have one of two common characteristics.

First, they may be highly localised. For example, a business may wish to deploy a 5G network in a specific factory or production plant and nowhere else. It may be perfectly happy to use a macro network across the rest of the country, but its unique URLLC case is focused on a single or handful of locations.

Second, they may be volatile. A network may need to be created for a short-term event (a Formula 1 race or a concert arena, for example), dismantled and then rebuilt somewhere else for the next event that demands localised URLLC wireless capabilities. As such, the business will move around and deploy where it wants, on demand. Or the capabilities may be needed in the same place, but infrequently.

Unlocking these capabilities will be crucial for the success of 5G. So, we envisage an ecosystem in which the MNOs (and any bold new entrants with deep pockets) provide the bulk of coverage – for their own customers, for MVNOs and for a host of new B2B partners, many of which will come from industry verticals with brand new demands.

But there will also be a smaller community of players that build their own private networks (which can also include cities, not just verticals) offering localised or time-limited services for specific use cases and needs. These communities will intersect (to enable interconnection with national or other networks, for example) but they will (and must) exist in parallel.

Of course, this depends on the regulatory positions adopted around the world, but there are signs that the closed shop could well open up – Germany is not alone in exploring innovative new models and its leadership is welcome (though unsurprising, given the importance of its industrial sector).

As such, it’s time that organisations such as the GSMA (which argued against releasing spectrum to industry) recognises this. They need to understand that the mobile ecosystem is about to undergo a fundamental shift. While they are used to representing classical licensed operators, they also need to think about how to embrace, not undermine, legitimate interest from industry and a new set of stakeholders.

If they do not wake up to the positive contribution such stakeholders will make to the success of 5G (stimulating demand for their own services and providing proof points of the hyped capabilities), they risk acting as an impediment to its natural evolution – a position which surely runs entirely contrary to their ethos and goals.