In an exclusive interview with Telecom Review during MWC 2024, John Gao, President of 5.5G Domain, discussed 5.5G (5G Advanced), from commercial rollout and innovations to solutions, recommendations, new services and monetization.
2024: The Pioneering Year of 5.5G Commercialization
Huawei remains committed to advancing the industry for the future. Through extensive collaboration among industry players, the company has conducted thorough verification of 5.5G technology, making significant contributions to its maturation.
Gao noted that with 5G being operational for the past five years, capabilities in both traditional and commercial services were showcased, and further industry requirements have prompted accelerated development. With this in mind, 5.5G – known as the next-generation of 5G technology – is anticipated for commercialization in 2024.
The 3GPP Release 18, set to be frozen during the first half of 2024, signifies the commencement of 5.5G technology, building upon the groundwork of previous releases. These technological advancements are anticipated to serve as the foundation for 5.5G, and facilitate even the transition for future 6G networks.
The capability to deploy all-band spectrum is also underway, with the introduction of new spectrum frequencies like mmWave and the the upper 6 GHz band. Moreover, the overall ecosystem involving chipsets, terminals, and CPE have been innovating to support 5.5G networks.
Huawei also observed the emergence of new application scenarios available to consumers, with numerous carriers worldwide are aligning with this perspective. They are working with Huawei, among other stakeholders, in commercializing 5.5G technology within this year.
5.5G Monetization: Business Opportunities
Gao shared details on the 5.5G business models that can impact how operators can monetize their networks. Connecting people, homes, and things have become very mature in today’s era and can be leveraged by operators to monetize immediately.
Connected People. The application of 5.5G technology will be beneficial in enhancing connectivity for consumers (ToC) within various services such as XR or immersive experiences. In the past, everyone faced a bottleneck in XR content generation. However, significant progress has been made in generating content with AI. "In the first half of last year, AI applications can generate video with less than five seconds length,” said Gao.” But several weeks ago, AI application Sora can already generate video with 1-minute length.”
By 2024, people expect to witness 3D videos generated by AI, significantly reducing the difficulty and cost of content generation. With mature devices and rich content, this ecosystem is expected to prosper.
Carriers might release expensive or high-end packages leveraging 5.5G technologies to ensure Quality of Service (QoS). "We need to explore how we can assist carriers in monetizing their networks through various services. We believe XR (Extended Reality) services can increase Average Revenue Per User (ARPU) for carriers," noted the Huawei executive.
Notably, some carriers have introduced differentiated packages by incorporating XR, and it is predicted that XR services will boost ARPU by 20%, translating to a 20% growth in revenue.
Connected Things. For the second use case, Gao pointed out how Reduced Capability (RedCap) presents great opportunities, especially for IoT devices with a longer lifespan than smartphones (10 to 15 years). “RedCap is considered the suitable option to connect things over this extended period," he explained.
In the past, the IoT development was hindered by the high cost of 5G modules, which were 5 to 10 times more expensive than 4G modules. By 2024, the cost of 5G modules is presumed to be equivalent to that of 4G, and by 2025, it will be cheaper with the cost of RedCap modules being 80% lower than that of 5G eMBB modules.
In this context, RedCap defines new lightweight 5G IoT to enable massive connections, allowing us to usher in a new era of cellular IoT. Gao reiterated, “We anticipate that, in the future, the number of IoT connections, such as those for RedCap, will surpass human connections. The contribution from RedCap connections could potentially represent around a quarter of that made by smartphones, leading to approximately 30% revenue growth.”
Connected Home. Gao emphasized that fixed wireless access (FWA) is a very promising business, “Starting from the 4G era, FWA and the mobile domain showed varying degrees of success in different countries. Those using TDD (Time Division Duplex) for FWA were more likely to succeed compared to those using FDD (Frequency Division Duplex), mainly due to the smaller cost per bit for TDD,” he elaborated. With the advent of 5.5G, the cost per bit is expected to further decrease by three to five times.
5.5G technology provides FWA with a competitive advantage compared to fiber services in the Middle East, Europe, Asia, and Africa. The connection rate can reach 500 Mbps to 1 Gbps, on par with fiber. Due to this reduced cost, the end-to-end cost for deploying 5.5G will be smaller than that of fiber, particularly in regions with lower population density.
Furthermore, FWA also has a competitive advantage over fiber as it reduces the time-to-market and allows quick deployment. Customers can simply make a phone call to carriers in able to ship the Customer Premises Equipment (CPE) before their FWA network is deployed.
Gao continued, “We believe that starting from the 5.5G rollout, Fixed Wireless Access (FWA) will enter a turning point where it can compete with fiber and experience explosive growth.” Globally, only a few households have access to a 500 Mbps rate. Putting 5.5G’s potential for this business use case, "If we can provide such high-speed access to around 20-30% of households worldwide, it could become a significant revenue source for carriers,” noted Gao.
The three abovementioned business scenarios are clearly evident for carriers nowadays, helping them to monetize with a high level of certainty. On the other hand, tier services, such as connected vehicles, AI in the cloud, and passive IoT, hold promise, but their potential benefits need evaluation based on the pace of technological development, especially from a revenue perspective.
Connected Vehicles. Autonomous driving vehicles require very large uplink bandwidth. To ensure the security of autonomous driving, latency should be kept very low. Thus, this kind of service necessitates network technologies such as 5.5G. “The connected vehicles service will also experience explosive growth in countries that are exploring autonomous driving. We will be able to see that soon in China and the United States,” Gao mentioned.
AI in the Cloud. Another emerging trend cited by Gao involves carriers implementing AI in the cloud, alongside numerous AI applications on devices. Consumers, acting as content generators, can utilize these applications to create content or engage in various activities. 5.5G technology’s capability to deliver deterministic experience and flexible slicing can meet the requirements for large uplink bandwidth and reliable, low-latency downlink bandwidth.
Passive IoT. Carriers pay a lot of attention to (and are quite enthusiastic towards) passive IoT use cases. Gao believes this technology can be widely applied to asset accounting, logistics, and production and manufacturing. “This technology will be released at a later stage than the previous ones. Release 19 (Rel 29) will probably be launched in 2025. After that, we can see commercialization,” he added.
Huawei is committed to facilitating a smooth evolution from 5G to 5.5G, safeguarding carriers' investments. Additionally, when 5G networks were initially rolled out, the associated devices were relatively expensive. However, with the advancements in 5.5G technologies, including RedCap and passive IoT, device costs are expected to significantly decrease. This reduction in costs could lead to higher revenue for carriers.
Global Operators’ Multi-Path 5.5G Evolution
Generally speaking, different operators can choose suitable paths based on local spectrum resources and various conditions. 5.5G technology can further help operators improve spectrum efficiency, through a multi-path evolution. Gao unveiled Huawei's multi-path solutions for 5.5G evolution:
Path 1: A shared characteristic among the Middle Eastern carriers, as well as those based in the United States, China, Japan, and South Korea is their acquisition of the TDD spectrum. The Middle East serves as a prime example illustrating this perspective. Carriers in Middle Eastern countries have demonstrated robust business development, driven by ambitious aspirations, leading the world in the ICT domain. Benefiting from favorable policy and business environments, these carriers have established a solid foundation to take the lead in 5.5G network deployment and business expansion in the 5.5G era.
This trend is echoed in the United States, China, Japan, and South Korea, leveraging substantial TDD bandwidth, such as 3CC and 4CC. Moreover, the advent of 5.5G introduces a groundbreaking technology known as Extremely Large Antenna Array (ELAA). This technology extends the network capacity by an additional 5 times positioning these countries favorably to innovate and introduce new services.
Path 2: Following the introduction of 5.5G, carriers can seamlessly migrate all existing bands—2G, 3G, and 4G—to 5G, that’s to say all bands to 5G. Thereby reducing the network's O&M expenses. Huawei offers multi-band serving cell (MBSC) and flexible spectrum access (FSC), which allows carriers to bundle multiple FDD bands into a single band with a wider bandwidth, facilitating efficient network management and generating enhanced returns on investment for carriers.
Gao underscored that for carriers in European countries and the Asia Pacific region, who have plenty of FDD spectrum resources, the focus is on stable business rollout. Although their service development might not match the rapid pace of the leading nations, these carriers benefit from multiple FDD bands.
Path 3: When combined with mmWave or upper 6 GHz (U6G) bands, the two paths above will improve the enhanced Mobile Broadband (eMBB) and scale up FWA provisioning. As one of the key decisions of WRC-23, the upper 6GHz spectrum band is now the harmonized home for the expansion of mobile capacity for 5.5G and beyond.
Huawei’s 5.5G Network Solutions
"We have actively participated in various industrial activities, collaborating with app developers, device makers, and chip manufacturers to establish a shared roadmap for commercialization by 2024,” Gao further emphasized.
Huawei’s latest innovations encompass the ELAA, reinforcing algorithms, which reduce carriers' cost per bit. Access to more spectrum resources can also significantly enhance capabilities. In addition, another innovative focus is on deterministic experiences, supporting stable 3D business application services and connected vehicle services.
In the millimeter-wave domain, Huawei offers a 1.6 GHz bandwidth solution with over 2,000 dipoles, making mmWave a valuable spectrum to invest for carriers. Also for indoor scenarios, Implementation is streamlined, requiring only one box to cover all bands, supporting indoor connection services shared among multiple carriers and thereby reducing costs.
Furthermore, Huawei’s full-scenario ‘zero-bit, zero-watt’ approach is optimizing power settings based on service changes at a millisecond level. The result is that Huawei’s products and solutions are designed to save 30 to 50% more energy compared to industry alternatives, assisting carriers in reducing their operational expenditures (OpEx). These upgrades are integrated within the innovative architecture of Huawei’s IntelligentRAN, which since being launched in 2022, has made breakthroughs in the commercial deployment of wireless intelligence with global operators.
