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The Road to 5G from an IoT Application Perspective

Now is the right time to prepare for 5G. Here we look beyond the hype and explore the reality of what 5G means for enterprises deploying connected solutions on mobile networks now and in the future.

Over the coming years 5G is set to fuel digital transformation globally, boosting industries and spurring innovation. As industry leading enterprises steadily turn to next-generation networks and IoT, people’s lives, business, and society will improve significantly.

To stay ahead of the competition, enterprises need to understand the implications of 5G and the opportunities it will bring to those who are best positioned to embrace IoT.

5G White Paper: The Road to 5G for IoT

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5G Explained – An Introduction to 5G

Digital transformation is fundamentally changing society, business, and the way we live our lives. Despite the rapid progress made in recent years, we are still in the early phases of a journey enabled through ubiquitous computing, storage, battery power and networking. Mobile networking is a key enabler of this transformation. Today, it provides global, reliable, and secure connectivity to more than 6 billion mobile broadband devices but also for almost 2 billion connected things by the end of 2022. Until 2025, the number of cellular IoT subscribers is forecasted to grow at a compound annual growth rate (CAGR) of 16.6 percent to reach 3.74 billion at the end of the period. The IoT is playing a key role in digital transformation and, with 5G rapidly being deployed, IoT adoption will accelerate.

The Road to 5G from an IoT Application Perspective

At the same time 5G is now rapidly being deployed across the globe. With 5G, a mobile network generation has been designed for the first time from the ground up to support IoT use cases. 5G comes with dedicated capabilities tailored for various kinds of Internet of Things applications, instead of having to adapt more general mobile communications that previous network generations resorted to.

This will mean that entirely new IoT applications can be developed and continue to fuel the digital transformation journey, benefitting consumers, enterprises, and society.

In this white paper, we will explore the journey towards a 5G-enabled digital transformation. This journey will take some years as 5G networks and capabilities are gradually made available, while in parallel earlier network generations are retired. We will explore what we believe are the necessary steps for enterprises to take and offer insights on how enterprises should act to maximize the potential value of this new technology.

What Are the Real 5G Implications for Enterprises

5G Business Implications for IoT Applications

Over the last few years 5G has been rapidly deployed in many markets across the world. At the same time, handsets capable of 5G have become increasingly affordable so that mobile broadband users can start to gain benefits of 5G where available. From an IoT application perspective the situation is somewhat different.

For example, continuous network access is required for many IoT use cases, meaning the application needs to optimize for networks with sufficient coverage. Application and device lifecycles are much longer than for consumer applications and handsets, so to avoid costly application redesigns or hardware replacements, architecture design and technology choices often need to be made with a 10-year horizon or more. Device design constraints are different from handset in other aspects as well, for example, cost and energy consumption requirements are often more stringent.

For IoT applications it is therefore important to think ahead. The choices made today will impact the capabilities and cost of the connected solution for many years to come. From an IoT application perspective we think it is useful to think about the road to 5G in three phases:

Phase 1 – Transition: Partial 5G coverage
Phase 2 – Evolve: Sufficient 5G coverage
Phase 3 – Transform: 5G ecosystem established

Let´s dig deeper into these three steps and describe what they will mean for an enterprise developing or operating IoT applications today.

5G and IoT - deployment phases for IoT applications

5G Business Strategy: Considerations for Local and Global IoT Applications

Phase 1 - Introduction of 5G and Partial 5G Coverage

The introduction of 5G is going to be over a 10+ year period. Each network generation is carefully standardized to ensure global interoperability. The regulator in each country plans the use of spectrum and awards licenses to use it. Communication service providers must secure spectrum licenses, conduct roll outs, and operate the new network. Rolling out a new national mobile network is a lengthy process, and it can take years before a new network generation achieves the same coverage as the generations preceding it.

For IoT applications this transition phase lasts until the new network technology provides sufficient coverage to remove dependency on legacy networks. For international IoT applications this phase lasts until all the countries that the application spans have sufficient coverage, and it is possible to access the needed network and functionality cross boarders in an efficient way. (As of December 2021, it should be noted that for some markets even the transition to 4G is still ongoing, with 2G or 3G still providing superior coverage).

For 5G, the coverage profile and roll-out time will vary considerably for different use cases. For example, massive mobile IoT capabilities like LTE-M and NB-IoT are optimized for wide area coverage and have initiated rollouts already on top of existing 4G networks.

Another important consideration for IoT applications is the sunset of earlier mobile network generations. With the deployment of 4G and 5G networks, regulators and communication service providers across the globe are sunsetting 2G and 3G legacy networks to reuse valuable spectrum for the new and more efficient technologies.

2G/3G sunsets are already in execution in markets like the USA and Australia. For Europe 2G sunsets are, in general, planned for the end of 2025. This is especially crucial for IoT applications that in many countries still rely on superior 2G coverage and with the long IoT device cycles there are also still a substantial number of IoT devices that are 2G only and need to be upgraded to ensure continued operation.

During this phase, the IoT application needs to rely on multiple generations of networks to achieve sufficient coverage. This implies a cost in the device that needs more complex communication hardware than if single-mode hardware could be used. It also means the application cannot take full benefit of new network capabilities.

Practical Considerations for Enterprises Designing or Operating IoT Application

  • Hardware to grow with: The market is in very rapid development and using sufficiently future proofed hardware you improve your chances of benefiting from future technical development. From a communication perspective this often means using multi-mode hardware. For many IoT applications and especially international ones, LTE-M is preferred over NB-IoT as it offers better support for software upgrades and international roaming.
  • Installed base review: After more than 30 years of commercial use, 2G or GSM (Global System for Mobile) is approaching end-of-life in many parts of the world. With the long IoT device life cycles there are still considerable volumes of 2G only devices in operation. The right strategy and execution plan is crucial to secure reliable performance in a cost-efficient transition.
  • Long term view: For new IoT applications and when hardware is upgraded it is a good time to set and execute a longer-term technology and operating model strategy, e.g., is this the time to shift to a public cloud based IoT platform-based application that will allow easier access to advanced 5G capabilities over time? For which part of the IoT application do you want to focus your digital expertise and which parts would you like to outsource?

Phase 2 - Sufficient 5G Coverage Creates New Application Opportunities

As the 5G network coverage becomes sufficient it will be possible to start capturing the first benefits from the new capabilities. What coverage is needed depends on the needs of the application. For example, an application where the devices are moving, and the communicated information is not time critical requires less coverage than applications based on stationary devices or with near real-time characteristics.

The coverage also depends on which 5G technology is needed, e.g., low, and medium data applications relying on LTE-M and NB-IoT has been designed to provide enhanced coverage. Depending on the location globally, typical IoT use cases will enter this phase sometime between now and 2025. For some, primarily national use cases and countries, this phase has already been reached.

The first 5G benefits that can be realized are closely related to physical connectivity. Once we can remove fallback technology and use 5G as the only technology, device cost can be reduced for applications with strict cost requirements, such as LTE-M or NB-IoT. This can also enable new applications that previously have not been economically feasible. New and enhanced applications can also be created leveraging other 5G characteristics, e.g., enhanced area and indoor coverage or very high data rates.

This is the beginning of the benefits for mobile IoT that will be realized from the 5G journey. To realize the next level of transformational benefits in an efficient way a 5G ecosystem needs to be formed with the tools and business models needed to reshape critical processes.

Practical Considerations

  • New applications. Lower device cost and battery consumption, more extensive coverage, or higher data rates. As existing technical and economical limitations are relaxed, opportunities for innovating new applications or renovating existing ones may seem endless. Focus digital competence on developing the business over resolving technical characteristics will be essential to win.
  • Modern user experience. Consumers and business users today expect immediate responses from their applications. Many existing applications rely on 2G fallback and are designed based on the tools developed for personal communications. With 4G/5G devices it is possible to bring an “always-on” user experience for IoT devices with human interaction like cars, alarm systems and point of sales terminals.
  • Modern architecture. Through 5G technologies it will be possible to simplify the architecture and set it up for further transformational change. In many cases it will be possible to attach sensors directly to the mobile network improving TCO and operational characteristics compared to local mesh networks. Building on managed IoT service deliveries to develop and operate the connected solution frees up digital resources for innovation, while securing competitive cost levels and continuously benefitting from developing network, device, and cloud technologies.

Phase 3 - Reinvent Your Business through the 5G Ecosystem

To enable the next level of digitalization and further enhance business and safety critical processes, the IoT application must be able to ensure the right characteristics of the underlying network infrastructure. For example, data rates or response times may need to be assured, coverage maximized, or where the data is processed needs to be controlled.

Through 5G the capabilities of the network can be exposed to the application which allows it to program the network to support its specific needs. For this to work, the desired capabilities need to have been deployed in the network with sufficient coverage.

Achieving the full vision of 5G is complex and will take years but there are already emerging practical use cases and additional capabilities will become available step-by-step. For example, in several national LTE-M/NB-IoT networks, it is now possible to access low power consumption and enhanced coverage capabilities from the network, paving the way for new use cases. International IoT service providers are integrating access to such functionality in their offerings making it increasingly relevant and feasible to deploy services relying on such functionality internationally.

5G Capabilities for Typical Development Projects

For 5G capabilities to become accessible for the typical development project, these capabilities must also have been exposed by the surrounding ecosystem, e.g., integrated into the software and services used to build the application.

Building on the mobile network security capabilities, offloading certificate handling from the device and using constrained application protocols with the device, battery consumption and processing requirements in the device are reduced dramatically. At the same time the developer can continue to use standard cloud-based tools and IoT protocols (like MQTT or CoAP) ensuring efficient development and focus on business value.

5G benefits for iot applications_network exposure funtions
5G network exposure functions and its benefits for IoT applications

Practical Considerations

  • Step-by-step approach: The potential capabilities of the 5G network infrastructure currently being deployed globally is enormous. However, it will take time for the full capabilities to become available and for the 5G ecosystem to mature. Moving early comes at the cost of developing your own connectivity solutions and diverting precious digital competence from solving business challenges. For most enterprises, leveraging 5G capabilities as they step-by-step become available while maintaining a vision for future business transformation will be more attractive.
  • Long term partners: 5G will cause a prolonged period of change in the mobile IoT connectivity ecosystem. Enterprises targeting to transform their business over time should choose partners that will deliver in the long run and who are credible in supporting business-critical processes.
  • Business focus: 5G and the associated technical capabilities such as mobile edge offer a technical toolbox on a completely different computing level than previous network generations. However, not all 5G capabilities are relevant for all use cases and most of these capabilities are best consumed as an integrated part of standard IoT platforms or managed services. Focusing on your business and building your IoT ecosystem will be even more important in the future.

The 5G Ecosystem – Working With the Right Partners

Today we are only in the first transition phase of 5G. Where should enterprises start?

5G will bring a lot of new capabilities. To benefit from these, enterprises need to ensure they work with partners that have the competency and stamina to invest over the coming five to ten years, as well as partners who have the right standing in the industry.

Telenor IoT is an industry leading player in IoT. Together with technology and cloud partners we enhance value for our customers. Our combined strength enables us to overcome the challenges enterprises face today, from the device hardware, connectivity options and cloud worldwide. Get in touch to discuss your IoT solution requirements.

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