Verizon, Sprint Announce New 5G Locations — What Should Partners Do?

As three major U.S. wireless carriers announce 5G rollouts, what should the next step be for the channel?

Verizon CEO Lowell McAdam said in an interview Tuesday that Los Angeles – in addition to Sacramento – will be the location for a 5G network market in the fourth quarter of 2018. Sprint (which is attempting to merge with T-Mobile) on the same day announced that New York City, Phoenix and Kansas City will join the company’s list of 5G launch cities in 2019. Meantime, AT&T spoke last month about how its impending 5G network will lead to an explosion of Internet of Things (IoT) devices.

2112 Group’s Larry Walsh

According to Verizon’s McAdam, this networking standard allowing for greater speed and bandwidth “is a lot closer than people think.” With that in mind, we asked Larry Walsh, CEO and chief analyst for The 2112 Group, about practical impact of this technological trend on master agents, subagents, resellers, MSPs and other members of the indirect IT/telecom sales channel.

He noted that while the 20 gigabits per second speed potential of 5G is slower than that of enterprise networking, “it’s significantly better than what we have today with 4G.” The benefits will revolutionize the industry, but Walsh says partners should exercise caution.

“It will enable a new class of technology and services, wireless wide-area networks to autonomous vehicles. This is the level of capabilities I’m talking about with 5G,” he said. “But when I say that we have to be cautious about not oversubscribing to the benefits, it’s because if we put too much hype into it, then we could ultimately reach unrecognized expectations.”

Walsh says the major 5G opportunity for partners is not selling networking contracts for the technology itself; rather, the the best chance for monetization might come with peripheral services and attached technologies.

He says the increased bandwidth and speed will create new classes of service.

“Right now we already have SD-WAN over wireline networks or fiber/coax networks. Just imagine SD-WAN being sold over 5G. Imagine infrastructure automation services – autonomous services through the internet of things – that require 5G connectivity in order to operate,” he said.

Will 5G create winners and losers?

Not necessarily, Walsh says. The Google Fiber project was put on hold as a result of wireless networking speeds finally increasing to meet demand. But for many of the companies in the channel, expect to see a reordering of products and services rather than the elimination of competitors.

“I think you’re going to see some pressure put on the traditional fiber and coax companies. I think you’re going to see some pressure put on the networking companies. You’re going to see some impact on companies like Cisco and Extreme and Juniper,” Walsh said. “But you already see them pivoting, because you see them picking up extra capabilities in other areas like SD-WAN.”

Cisco’s purchase of Viptela is a good example of a vendor making a pivot.

As for the downstream members of the channel, Walsh says they need to determine their role in the 5G “road to market.” The smart ones are those who start… … the conversation with their carrier partner as soon as possible.

“Master agents and agents need to ask their 5G carriers if they’ll be able to sell conventional contracts in both data and voice services,” Walsh said. “Or, will they be restricted and only able to refer 5G business and sell other products and services that leverage the high-capacity spectrum?”

Ovum’s Mike Sapien

Mike Sapien, chief analyst for Ovum, tells Channel Partners that “real scale deployment” won’t happen in the U.S. until 2019, delaying the opportunity for partners to directly monetize 5G.

“5G will cause all operators to reevaluate current plans and service offers. Unlimited may be under threat,” Sapien said. “Operators will need time before any real scale offer is available and will take more time to offer to channels and resellers. [The second half of] 2019 is the best case for any real programs.”