Outlay vs opportunity: the 5G roaming landscape

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Mikaël Schachne, VP Mobility and IoT Business and CMO at BICS, looks at the economics of roaming in the 5G era.

Last month, South Korean operator SK Telecom reached a landmark one million 5G subscribers. Not content with enabling super-fast speeds and greater capacity domestically, SK Telecom has also established roaming agreements with China, Italy, Finland and Switzerland. As such, those with next-generation smartphones visiting these countries from South Korea (and vice versa), will be able to take advantage of 5G cellular services in much the same way as they do at home.

5G trials and roll-outs will continue – especially in regions within Korea and Japan, which remain at the forefront of the tech evolution – but delivering international 5G roaming will require collaboration between and investment from operators globally.

Despite the growth in 5G roaming, deploying 5G networks has largely remained a domestic priority. In the US, for example, mobile 5G is now available from Verizon, AT&T, T-Mobile, and Sprint in a number of areas, with the likes of U.S Cellular, C Spire, Charter, Comcast and Starry either offering fixed 5G, testing services, or aiming to launch next year.

Look at the boom in data traffic generated from smartphones, and this will come as little surprise. Driven by the popularity of video streaming via mobile and the increase in the number of IoT devices, global mobile data is predicted to reach 131 exabytes per month by the end of 2024 – an almost unimaginable sum. Ensuring that subscribers get a reliable, consistent, high-quality service – while at the same time supporting connected businesses and heavy industry – remains the ultimate goal for operators.

5G: home or away?

This is where 5G comes in, providing greater bandwidth, easing network congestion and giving rise to new, ‘smart’ services, and whole new ‘smart’ cities. Let’s return to SK Telecom for an example of 5G in action. In October, the operator linked 46 houses in a remote village in South Korea to its 5G network, supporting an emergency response system, agritech applications, and VR-enabled learning at the village school. This example can be seen as a microcosm for macro, 5G-enabled urban areas in the future. However, while the benefits for the village’s emergency response teams, its schoolchildren, and its farmers are clear, the opportunities it can bring on a wider scale are limited, due to service availability being restricted to this small geographical area.

What would happen, for example, if a farmer wanted to develop a connected agritech business and distribute devices overseas; or if another farmer wanted to ship its crop and track the cargo across other countries? To guarantee always-on, borderless connectivity of devices, operators across the world must support 3G and 4G roaming. The number of 4G network launches and resulting roaming traffic is increasing year-on-year, but there’ll come a point at which these networks will not be capable of managing global traffic demands. The growth of smart cities and IoT deployments, alongside ever-more migratory populations and the globalisation of trade, means 5G roaming will be an essential next step.

We’ve seen 5G roaming launches in APAC and Europe (including Swisscom, which launched the first intercontinental 5G roaming service) but availability remains limited to a handful of areas within these countries. Subscribers in the European Union arguably have an advantage over global geographies, as they’re able to roam on 5G networks without the additional tariffs imposed elsewhere. This is due to the EU’s ‘roam like at home’ regulation, introduced in 2017, which has helped to drive the uptake in roaming services and the decrease in the number of ‘silent roamers’.

An elimination of bill shock, an ability to stream HD videos at lightening speed, new opportunities for global connected IoT businesses: the benefits of 5G roaming are many, so why is it that operators are slow – and sometimes reluctant – to launch new services?

The cost and the core

The 3GPP announced the specifications for non-standalone 5G back in 2017, which involved the radio part of the network, and enabled new 5G networks to be built on existing 4G infrastructure. Operators are still relying on 3G and 4G network cores, meaning we’re unlikely to see truly global 5G roaming until the core is moved to 5G, (still fairly new) standalone 5G specifications are met, and 5G signalling is adopted.

The second major challenge is the cost of upgrading core networks to 5G. This is a major investment which involves developing and testing network equipment, and deploying the infrastructure. In addition to this, stakeholders also have to navigate the political and cybersecurity minefield which currently governs the 5G equipment market.

Historically, roaming was a lucrative part of an operator’s business, providing it with additional revenues above and beyond domestic network access fees. However, recent market changes have disrupted this model, narrowing a revenue stream which could otherwise have helped to finance network upgrades and roaming roll-outs. The disruptor isn’t just EU regulation, it’s also increased competition from digital service providers as well as operators themselves which are missing opportunities to improve the quality of user experience.

Overcoming disruption; funding the future

Upgrading networks to 5G is an expensive business, but it’s also an inevitability. The money must come from somewhere, and that somewhere is the IoT and industrial IoT (IIoT). Businesses emerging from this latter ecosystem, in particular (which includes those in connected agriculture, processing and manufacturing plants, and utilities), have the funds and financial incentive to invest in and pay for high-speed, low-latency 5G connectivity. The result is a win-win: the IIoT benefits from remote tracking, robotics, greater productivity, automation and so on; and operators can unlock a major revenue opportunity, predicted to hit $619 billion by 2026.

In addition to heavy industry, there’s also a strong consumer-focussed use case. Funding investment in 5G infrastructure could be supported by developing and launching new business-to-consumer services. These include multi-player, virtual and augmented reality gaming, and with such a huge market of global gamers currently, up-selling these services to businesses (and then to subscribers) in the future is an opportunity that shouldn’t be ignored.

Over those six years we’ll see dramatic changes across the telecoms landscape, the digitalisation of industry, a vastly improved subscriber experience, and a move toward global, borderless mobile connectivity. While 5G roaming is an investment, it’s also a huge opportunity, open to those operators which look beyond traditional revenue streams, and focus on future IoT opportunities.

Mikaël joined the international division of Belgacom in 2001 which was then spun-off and merged with Swisscom International and MTN International. After having successfully led the product development and management of new international mobile data services such as Signalling, GPRS Roaming eXchange (GRX), SMS Hubbing, MMS Hubbing, Instant Roaming and Open Connectivity Roaming Hubbing, he’s now in charge of the Mobility and IoT Business at BICS. The portfolio is now supporting international mobile communications needs for more than 500 Mobile Operators and MVNOs across the world. He graduated from the Brussels University Applied Science Faculty (Belgium) as a Civil Electrical Engineer specialized in Electronic and Telecommunications and holds a master in Business-to-Business Marketing from the Vlerick Management School in Leuven, Belgium.