What’s holding back enterprise 5G?

Three years after its introduction, the high-speed wireless technology 5G is connecting the phones, tablets, and laptops of more than a billion consumers worldwide. But uptake of its most touted benefits for connecting industrial machines, vehicles, and containers to the internet via sensors has lagged. In the run-up to Mobile World Congress in Barcelona starting February 27, Oracle Connect spoke with Andrew De La Torre, Oracle’s group vice president for communications technology, about 5G’s benefits for industry, the state of software development for commercial 5G networks, and the networks’ potential. Edited excerpts from their conversation follow.

Oracle Connect: Despite its promise of connecting cars, factory floors, and remote industrial equipment at much higher speeds, response times, and with many more sensors on a network, 5G for industry is still in its early stages. The main challenges are a lack of sensors and other equipment, and the complexity of integrating 5G systems with other systems, the trade group 5G Americas wrote in a January report. Apart from some well-publicized pilot projects, 5G enterprise networks and applications are far from the mainstream.

De La Torre: I did expect faster traction, although the carriers are still building out their 5G radio coverage. The 5G “standalone core,” which uses cloud native technology for the core network to create services that connect devices in the field or on the plant floor, isn’t here at the moment. So, I’m not surprised. Network operators don’t want to build these standalone cores until there are apps available that they can make money from. Among the 515 global operators with a 5G license, only 21 have launched a 5G SA core. And the application developers are waiting for the standalone core networks to move to 5G. No one wants to invest and commit until they see movement on the other side. With 5G, we’re trying to build a brand-new ecosystem.

Oracle Connect: You’ve said carriers won’t profit on their 5G investments on the back of consumer device connections alone. What’s going to be the effect on telco carriers’ business models as 5G industry adoption picks up, and where will the biggest opportunities be for mobile operators and IT companies? What do businesses want to do with 5G?

De La Torre: Carriers are deploying 5G radio and making money from consumers through that. But you wouldn’t have built 5G just for consumers—LTE [4G’s Long Term Evolution technology] is good enough for consumer apps, and its radio speeds could have evolved. And you could have thrown more spectrum at it for capacity. That would have been good enough for the consumer world. The whole raison d’etre for real 5G—not 5G bolted onto a 4G core [known as non-standalone]—is enterprise. 5G lets network operators do different things than LTE, like dynamically set quality of service for applications and optimize vast numbers of special configurations in the network for them. It also provides the ability to expose more data for analytics purposes. We will be seeing much more demanding network requirements from the applications that only 5G can satisfy. But the industry is nervous about the absence of the golden goose use case. In the automotive sector, the factory floor is the biggest opportunity in the short term—it’s far and away the largest prize out there. There are also big opportunities in construction and engineering, utilities, healthcare, and oil and gas.

Oracle Connect: You’ve said that the big question in the wireless networking industry right now is, What’s the killer app for 5G networking? How much has lack of one held back deployments?

De La Torre: The developers of 5G applications are going to be industrial automation vendors, global enterprise application players, and the small group of dominant systems integrators that exist in each industry sector. For private networks set up by businesses, the choice of technology, including Bluetooth, Wi-Fi, 4G, and 5G, depends on what you want to do with the network. Do you need high bandwidth or capacity? A network with wide area coverage? Mobility? And are you trying to run something mission-critical? If you’re not ticking most of these boxes, the economics of 5G might not make sense, and I wouldn’t advocate for everyone just building enterprise 5G networks. Chipset costs are another reason 5G hasn’t scaled up yet. But it’s still too soon to be sounding the death knell for 5G. Everyone’s wringing their hands saying nothing’s happening. Chill.

Oracle Connect: Give me some examples of how Oracle goes to market with software for the 5G core, with its industry applications, and with Oracle Cloud Infrastructure [OCI]. Is Oracle selling these products out of one group, or do carriers make individual deals with different groups at Oracle?

De La Torre: Oracle is playing a part in helping break through the 5G stalemate. This year we plan to release four industry applications that use 5G. One is for public safety, using video and voice on our enterprise communications platform. There is the Simphony 5G restaurant in a box with tablets for the greeter, wait staff, and kitchen personnel. In our energy and water group we’ll have real-time grid sensors for predictive failure analysis of power circuits. And my communications group is working with Oracle’s construction and engineering team on software to monitor workers, equipment, and assets; measure the condition of materials; and use that data to build digital twins of buildings.

In healthcare we’ve worked with Cerner [Oracle acquired the electronic health records company in 2022] to see where we can help. They have a whole connected hospital system with various mobile communications devices, devices on the patient, and video monitoring. Different staff members can log in by their persona, so one phone number can be used to dynamically reach a nurse or a pediatrician or an anaesthesiologist.

Our communications group has also worked with the OCI team to help them develop the Cloud for Telcos offering—highly optimized infrastructure for the deployment of the 5G standalone core and network edge capabilities.

Oracle Connect: At the same time that 5G usage is increasing, particularly among consumers, the wireless industry is defining the next standard, 6G. The first test beds could be running in about five years. Are businesses looking ahead to this technology?

De La Torre: The standards guys are looking ahead, but not the enterprises. It won’t do anything for spectral efficiency, so I’m not excited by 6G from the aspect of a new radio. What is interesting is the network architecture—they will likely simplify it. In 6G you’ll see the idea of “disaggregation” of the user plane and control plane functions driven by massive traffic volumes. The control plane at the center of the network will be simpler. These architectural changes will undoubtedly accelerate the role of the public cloud in building communications networks.

Getting Connected

Private 5G global addressable market by year

2022: $0.09 billion
2024: $0.65 billion
2026: $3.88 billion
2028: $19.62 billion
2030: $76.33 billion
2032: $251.30 billion

CAGR: 120%
Note: Amounts in US dollars
Source: Harbor Research

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