Telcos and some larger pay TV operators are already maneuvering to exploit 5G.
Broadcasters struggling to meet the challenge of OTT might be reassured by the latest research from Intel suggesting next generation wireless networks including cellular and Wi-Fi will generate $3 trillion revenue over the next decade 2019-2028.
The research conducted by UK analyst group Ovum on Intel’s behalf indicated that forthcoming 5G cellular networks would account for almost half this bonanza at $1.3 trillion. The remaining $1.7 trillion would presumably come mostly from Wi-Fi as well as legacy 4G/LTE cellular networks which will continue to provide mobile connectivity in parallel with 5G for some years.
The main focus of the Intel research as its name ‘5G Economics of Entertainment Report’ suggests is on the 5G opportunity for the video industry. While increased capacity of 5G will be crucial for delivery of Ultra HD content, it is the greatly reduced latency that will really propel content consumption and generate new revenues, according to the report. This would stimulate mobile media and gaming, while unlocking the potential of emerging applications under the banners of virtual reality (VR) and augmented reality (AR). It would also provide a trigger for use cases yet barely on the radar screen, such as 3D holographic displays.
These predictions of revenue growth are predicated not just on the capabilities of 5G networks but also synergies with relevant industry developments, with the connected car identified by the research as being the most profound. The connected car would free both drivers and passengers to consume more media while traveling, while a combination of greater network capacity, low latency and localized storage would boost connectivity at high road speeds. This would reduce network lag and stalling, ushering in new business models such as 5G hotspots through which drivers could quickly download maps or movies, or upload vehicle diagnostics.
The big question for Ovum’s chief analyst for entertainment Ed Barton is what will not be impacted or disrupted by 5G.
Within a year or two 5G will would start to underpin AR and VR deployments Ovum reckoned, creating over $140 billion in cumulative revenues between 2021 and 2028. AR would enable people to interact with media through virtual items, virtual characters and augmented contextual information, as well as create a new channel for content creators to reach fans.
Gaming would also be at the forefront of 5G-led innovations and indeed exploit both AR and VR. AR games would account for more than 90 percent of 5G AR revenues by 2028, nearly $36 billion globally. 5G would also stimulate mobile cloud gaming because it would be capable of delivering the fast responsiveness and high resolution gamers demand from real time streaming. 5G mobile games revenue, including AR and cloud gaming, is forecast to exceed $100 billion annually by 2028.
Excited by such predictions some leading operators are already maneuvering to ensure they can hit the ground running as 5G deployments begin. In Germany Telefonica Deutschland has been establishing partnerships to ensure it has enough mobile backhaul capacity to carry all the expected extra media traffic. Echoing the Intel research, Telefonica has identified connected cars as a primary target for 5G based media services, describing it as the new fifth screen after cinema, TV, PCs and smartphone.
Telefonica now has a backhaul agreement NGN Fiber Network KG (NGN) from the Lower Franconia region of Germany to connect some of its cell towers to fiber-optic lines there, as part of its foundation for a nationwide 5G network. It also has a similar deal in the country with Vodafone on a smaller scale, initially for a pilot connecting 100 locations.
While 5G presents opportunities for broadcasters to reach new audiences and develop innovative services, it is also a threat because it will narrow the capacity and performance gap with established distribution methods. In fact, the Intel report argued that as 5G evolves, the existing differentiation in broadband speeds between cable or telco networks and cellular will erode. 5G will therefore help mobile operators sell network capacity to OTT video service providers so they can deliver over the internet and bypass traditional fixed line operators.
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