Networking Amazon enters the 5G market, a new threat for operators?

One of the largest online stores where any user can create a seller profile, Amazon, has just taken a crucial step of potentially momentous importance for the telecommunications business: the launch of AWS private 5G, a proprietary solution for building private networks of 5G focused on the business world.

This announcement poses a significant threat to the telecommunications operator sector and its prospects, thanks to 5G. There is consensus in the industry that most of the incremental business that 5G technologies can produce will start in the corporate world through private 5G networks, virtual or not, for enterprises.

Qualities of 5G networks

These networks can connect millions of devices simultaneously and reduce latency, which makes them a perfect tool to increase automation and robotization of industrial companies and improve the management of companies in general. For this reason, traditional operators such as Telefónica or Vodafone are focusing on building private networks or virtual private networks for these companies. Therefore, Amazon’s launch of AWS personal 5G threatens what appears to be the most promising source of additional revenue for the telecommunications carrier sector with the arrival of 5G.

A warning also for Cellnex.

This business niche has been identified as a great source of income by other companies that want to benefit from the corporate 5G. This is the case for companies such as Cellnex, American Tower, or Vantage seeking their role in the sector and already have their first contracts. Also, consultants and technology integrators such as Accenture or Rakuten are inside.

Currently, the model proposed by the telecommunications operators is oriented mainly on virtual private networks since it is the most advantageous offer. 5G allows the so-called Network Slicing, making it possible to create virtual subnets with different capacities. For example, the ability to take on many devices that have little demand for speed and latency to connect streetlights, wastebasket, or a parking space in a smart city. Also, to have very low latency to control the robots in a factory in real-time.

Amazon uses public frequency bands.

Amazon’s offer is based on using a frequency band for public use and open access in the United States called Citizen Broadband Radio Service (CBRS). 150 MHz in the 3.5 GHz band, precisely the same that supports the fundamental use of 5G in Europe. In fact, in some European countries like Germany, states have set aside frequencies in that band for companies to use directly.

On the other hand, in Spain, the spectrum has not yet been reserved so that companies can use it directly. It is foreseeable that part of the 26 GHz band that the government will tender in 2022 will be reserved for direct corporate use. By definition, enterprise 5G networks are usually limited in scope to a specific factory or campus.

Advantages and disadvantages of the Amazon model

The most significant advantage of AWS private 5G is the enormous power of Amazon Web Services (AWS), the world’s largest cloud giant, which will have a turnover of around 60,000 million dollars this year. Therefore, it offers its technological reputation to many companies that have already relied on AWS for critical parts of their business.

It uses a payment model that does not depend on traffic or the number of connected devices, which does not imply an initial outlay. AWS takes care of everything, and the customer only has to manage the network from the same AWS console from which they can manage their cloud services.

The main one is that Amazon does not have frequencies regarding the disadvantages or disadvantages. In the United States, the CBRS band is used, which can only be used for small companies and not very dense environments where there is no interference with other users. Its performance in complex installations, where precise radio planning is necessary, remains to be seen.

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