It has been clear for some time that operators – at least here in Europe – are very reluctant to commit to another spending spree once the vendors come knocking on their door to sell 6G equipment.
This telco reluctance to a big 6G spend is not new – European MNO executives have been saying for quite some time that the last thing they want is a costly 6G rollout. Having spent heavily on 5G, they have struggled to monetize these investments and are as a result unwilling to repeat this experience with 6G.
Or, as Robert Mourik, chair and commissioner at Ireland's Commission for Communications Regulation, put it during a recent session at the 6G Global Summit in London dedicated to investment and business models: "Margins are not what they once were. These operators don't have the kind of bags of gold lying under their desk as they used to, so it is not going to be easy for them to part with their cash."
Both he and Mark Henry, director of network and spectrum strategy for BT, suggested that a clear business case will be needed for operators to loosen their purse strings. Henry pointed to greater spectrum efficiency as something that could justify spending.
He also said that satellite integration and 100% coverage is something that is an attractive proposition for operators given the increasing difficulty of installing new sites because of their locations. "We really are at the ends of the country, we're building sites with helicopters," he said.
He seemed, however, unconvinced by what may be seen as flashier business cases that are sometimes discussed. He argued that updating foundational large language models in real time "comes with a massive cost and I just don't see why you need to do it in real time." He added: "I've just seen GPT 4.0 last week do real world imagery, understanding of scene, and that's just in the cloud and running on a smartphone just like most applications do today, so we won't invest on that basis for sure."
Still, Henry did find some kind words for 5G, saying "the business case ... was the most efficient way to deliver data capacity," with anything else an extra upside.
Mourik was perhaps more critical. While agreeing 5G has delivered on that particular promise, he pointed out that delivering data capacity was not marketed as the technology's main promise. In his view, it's an example of how the industry has oversold and underdelivered.
"What they do is they first invent the technology, then they get some economic consultants to come along to say how much value there is in this technology and that's why nations have to invest in it. And there is a trillion and a half dollars attached to it. They get the European Commission in Europe to be so stupid as to say by 2030, everyone should have it. To me as an economist and as an economic regulator that is just painful to watch. I would rather see people invest if there is a business case," he said, adding 6G should first have a proven business case rather than rely on political support.
Europe's skepticism about 6G may be nothing new, but it now seems a more pragmatic approach is also taking hold across the Atlantic as 5G spending slows.
Nevertheless, Ian Fogg of CCS Insight did find a reason to invest in 6G, noting that rising data consumption will require investments to be made. In his view, "it's not a case of building the case, it's how strong a case can we build. How much investment can we do?" The benefits of new generations need to be much better communicated to the consumer, he reckons.
Fogg also thinks 5G-Advanced (5GA) has the potential to deliver the use cases in verticals that were initially promised with 5G. "If we don't get 5GA right and build the investment case for that, we're not going to be in the right place to build the investment case for 6G," he argued.
Asked where funding might come from, Henry argued that it is important to focus on services that can be sold to customers, rather than use cases. If 6G's value can demonstrably proven, funding will follow, he argued.
Mourik seemed to echo his point, saying that while saving costs is important, the industry also needs higher revenues, or at least a vision of new things that could drive the revenue stream. However, he admitted this will be difficult.
Source: LightReading
