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Business Case and Technology Analysis for 5G Low Latency Applications

Maria A. Lema, Andres Laya, Toktam Mahmoodi, Maria Cuevas, Joachim Sachs, Jan Markendahl, Mischa Dohler

arXiv:1703.09434v1cs.CY

TL;DR

The paper examines whether operators can economically support 5G applications requiring ultra-low latency despite demanding network requirements and costly changes. It surveys use cases and market needs across industry verticals, finding clear benefits when operators create suitable business models and partnerships.

  • Problem

    Operators face costly network changes for ultra-low-latency services, while the economic viability of recovering those investments through new business models is unclear.

  • Method

    The paper surveys technical requirements and market research for ultra-low-latency use cases across healthcare, automotive and transport, entertainment, and manufacturing.

  • Results

    Operators can clearly benefit from supporting 5G low-latency applications when new business models and industry partnerships support technology tailored to each vertical.

  • Takeaways & Limitations

    Operators can add value and strengthen their market position by taking new roles in delivering the growing range of 5G services.

  • Takeaways & Limitations

    Existing 3GPP LTE Advanced and widely deployed fixed networks cannot meet the stringent requirements of the surveyed ultra-low-latency applications.

Abstract

from arXiv · show

A large number of new consumer and industrial applications are likely to change the classic operator's business models and provide a wide range of new markets to enter. This article analyses the most relevant 5G use cases that require ultra-low latency, from both technical and business perspectives. Low latency services pose challenging requirements to the network, and to fulfill them operators need to invest in costly changes in their network. In this sense, it is not clear whether such investments are going to be amortized with these new business models. In light of this, specific applications and requirements are described and the potential market benefits for operators are analysed. Conclusions show that operators have clear opportunities to add value and position themselves strongly with the increasing number of services to be provided by 5G.

I. INTRODUCTION

The paper examines whether ultra-low-latency 5G applications can create viable opportunities for telecom operators despite demanding technical requirements and costly network investments. It surveys relevant use cases, technologies, network limitations, and industry-specific business prospects.

  • Motivation: Ultra-low-latency applications could expand 5G services across consumer and industrial sectors but impose stringent network requirements.Closed-loop applications such as haptics, remote interaction, and immersive reality are sensitive to round-trip delay because delays can impair synchronism and control-loop stability.
  • Approach: The study surveys low-latency use cases, their performance indicators and technology requirements, then contrasts them with available communication technologies.This comparison is intended to identify current limitations and motivate technological evolution toward 5G support.
  • Scope: The paper focuses on four industry verticals and analyses their market size, stakeholders, and potential business opportunities for network operators.The study also considers commercial fixed and mobile network performance and the technology evolution needed to support these applications.
  • Research question: The central question is whether telecom players can cost-effectively build ultra-low latency into 5G networks.The paper frames this as a market-need and revenue question alongside the technological challenge.
  • Approach: Its exploratory strategy combines cumulative case studies with technical and market analysis of promising 5G use areas.The cases are matched with technical requirements and business opportunities for telecom players, using multiple qualitative and quantitative sources.

A. Data Collection

The study collects and combines industry, telecom, research, regulatory, and market evidence to relate low-latency use cases to network performance and business opportunities. Its analysis covers four use cases, current network limitations, enabling technologies, and operator prospects.

  • Data sources: Data collection combines interviews, telecom workshops, collaborative research, and an extensive literature and market-data review.Interview profiles included robotic surgeons, market researchers, and technology researchers.
  • Analysis process: The analysis first describes four use cases, then quantifies current fixed and mobile network limitations and explores 5G technology evolution.A final qualitative analysis examines possible business opportunities for telecom players.
  • Analysis process: The study relates industry targets to commercial network performance to identify technological limitations that must be overcome for low-latency opportunities.The business opportunities assume the corresponding network build-out exists.
  • Healthcare: Healthcare applications differ in latency dependence: medical interventions require lower latency than remote care.Remote care is more dependent on evolution over time than on instantaneous measurements or events.
  • Healthcare: Remote intervention latency tolerance varies with the medical expert’s level of interaction, from verbal tele-mentoring to robotic control.Remote surgery requires the entire procedure to be controlled by a surgeon at a distance.
  • Healthcare: Tele-surgery with haptic feedback requires end-to-end round-trip times below 10 ms.Haptic feedback uses closed control loops in which action and reaction must remain synchronized.

B. Assisted Driving and Transport Services

Assisted driving and transport services rely on connected vehicles, infrastructure, sensors, and communications, with requirements varying across applications. The paper emphasizes stringent latency, reliability, mobility, and capacity needs alongside emerging commercial opportunities.

  • Use cases: Intelligent transport systems use information technology, sensors, and communications to improve movement and journeys across public and private transport.The automotive market is transitioning toward fully connected cars supporting autonomous or assisted driving.
  • Use cases: Automotive applications include automated driving, road safety, traffic efficiency, logistics, intelligent navigation, infotainment, and nomadic nodes.These applications use information from vehicles, infrastructure, networks, or other connected systems.
  • Technical requirements: Automated overtaking requires approximately 10 ms maximum end-to-end latency for each message exchange.See-through applications additionally require 220 Mbps capacity and 50 ms end-to-end latency for 30 frames per second raw video.
  • Technical requirements: Mobility requires enhanced handovers, device discovery, fast recovery after coverage loss, and integration of multiple radio technologies.Active QoS management and network-controlled device-to-device communication can help shorten paths and respond when KPIs are not satisfied.
  • Business opportunities: Commercial opportunities range from real-time commuting applications to connected infrastructure and increasingly intelligent vehicles.Tranquilien is reported to predict train crowding with 85% accuracy up to a week in advance.

C. Entertainment: Content Delivery and Gaming

Entertainment is shifting toward interactive, immersive, and multisensory experiences delivered through high-speed networks, cloud computing, and capable devices. VR and AR applications create especially demanding latency and capacity requirements for content delivery and gaming.

  • Industry trends: Consumers increasingly interact during media and entertainment use rather than remaining passive content consumers.High-speed networks, data centres, cloud computing, and improved devices have contributed to demand for more immersive experiences.
  • Use cases: Entertainment applications include ultra-high-fidelity media, enhanced live events, immersive media, cooperative production, and collaborative gaming.These applications span live and streamed content, augmented reality, immediate sharing, and multisensory interaction.
  • Technical requirements: VR and AR require 15 ms to 7 ms application-to-application delay for smooth action-reaction experiences.Encoding and compression consume part of the latency budget, making VR content delivery demanding in capacity as well.
  • Technical requirements: Immersive services combine video, audio, and tactile signals to enhance content delivery and gaming experiences.An ultra-reliable low-latency network must also address data rate, mobility, coverage, and reliability requirements.
  • Industry developments: Existing implementations and developments include Chromecast, VR/AR interfaces, immersive broadcast and cinema, online retail visualization, tourism, and haptic gloves.These examples illustrate active research and industry development around immersive delivery and interaction.

D. Industry Automation

Industry automation is moving toward intelligently connected production systems spanning factories, value chains, and ecosystems. Supporting these applications requires flexible, reliable, heterogeneous connectivity that can adapt rapidly to changing application demands.

  • Industry 4.0 connects product development, production, logistics, and customers within broader value chains and ecosystems.
  • Manufacturing applications range from time-critical control and remote robotics to localization, quality control, augmented-reality support, and value-chain connectivity.
  • Time-critical process optimization and closed-loop robotic control may require communication latencies below 1 ms.
  • Effective real-time cooperation requires heterogeneous multi-connectivity and rapid, reliable reconfiguration of QoS and traffic demands.
  • Existing industrial innovation includes collaborative robots, mass customization with 3D printing, automated networked factories, and AR-supported work.

IV. PERFORMANCE OF EXISTING NETWORK SOLUTIONS

The paper evaluates latency in deployed mobile and fixed networks against the stringent requirements of emerging real-time applications. Results indicate that current networks do not yet consistently support these requirements, with fixed-network jitter particularly sensitive to congestion.

  • Applications requiring less than 5-10 ms response pose a major challenge for current network deployments.
  • Ofcom measurements use ping-test round-trip time to assess mobile-network responsiveness, finding 4G more stable than 3G but still insufficient for new real-time services.
  • Fixed-network latency is measured as round-trip time, while jitter is the rate of change of latency.
  • Fixed networks show substantial time-of-day variation in jitter and strong sensitivity to congestion, limiting support for some low-latency services.
  • Automotive safety applications require end-to-end delays as low as 10 ms, while robotic teleoperation requires stable latency below a 10 ms round trip.
  • Current network performance implies that changes are needed to incorporate these applications successfully.

A. Overview of Data Transmission Delay Components

The paper decomposes LTE and fixed-network delay into transmission, protocol, access, processing, retransmission, queuing, and propagation components. It identifies uplink access and retransmissions as important LTE bottlenecks and reviews measures targeting millisecond and sub-millisecond latency.

  • Current 4G networks: LTE delay includes serialization, protocol, routing, queuing, grant acquisition, random access, transmission intervals, processing, retransmissions, and congestion.
  • Current 4G networks: LTE transmissions use 1 ms subframes as the minimum transmission unit.
  • Current 4G networks: Uplink HARQ retransmission round-trip time is 8 ms for frequency-division duplex LTE.
  • Current 4G networks: 17 ms uplink and 7.5 ms downlink radio-access delays are estimated for aligned LTE transmissions without retransmissions.
  • Fixed networks: Fixed-network delay includes propagation, while LTE bottlenecks include protocol inefficiency, grant acquisition, and retransmissions, especially uplink.
  • Latency reduction techniques: Configured LTE radio access can reach millisecond latency, while 5G NR targets 0.5 ms one-way RAN latency through shorter numerology, slots, processing, and reliability features.
  • End-to-end network design: Direct device communication, network-function placement, modularization, slicing, virtualization, and converged multi-connectivity are considered for end-to-end latency management.

VI. MARKET CONSIDERATIONS FOR ULTRA-LOW LATENCY APPLICATIONS

The market analysis examines low-latency opportunities across healthcare, emphasizing operator roles, market growth, and partnerships. Remote monitoring appears commercially established, while remote interventions remain difficult to forecast.

  • Market size: GBP 23 billion was the global digital health market size in 2014, forecast to reach GBP 43 billion by 2018.The UK market was GBP 2 billion in 2014 and forecast to reach GBP 2.9 billion by 2018, with an 11% CAGR.
  • Market size: Digital health systems contributed 66% of UK digital health sales, making them the largest global and UK market segment.The segment is dominated by large, often international companies.
  • Market size: Tele-healthcare contributed 18% of the UK digital health market and was predicted to grow 17% annually through 2018.Mobile health apps were predicted to grow 35% in the UK and 49% globally from 2014 to 2018.
  • Remote healthcare and medical intervention: Mobile operators are expected to manage nearly 50% of the mobile health market, but must address regulation, fragmentation, and health-system integration.Operators can provide connectivity, bundled solutions, or broader system-integration services through partnerships.
  • Remote healthcare and medical intervention: Remote interventions such as remote surgery remained nascent, so their market implications could not yet be foreseen.The paper identifies remote monitoring as the nearer-term ultra-low-latency opportunity.

B. Assisted Driving and Transport Services

Assisted and autonomous driving require low-latency connectivity and involve expanding connected-car markets. Operators can contribute infrastructure, data, billing, and service-management capabilities through partnerships with manufacturers.

  • Assisted Driving and Transport Services: Low-latency networks are required mainly for enhanced assisted driving and autonomous driving.Automotive applications include safety, driver assistance, and increasingly autonomous vehicle functions.
  • Market development: Autonomous driving was projected to grow 33% annually, while safety and autonomous driving together represented 61% of total connected-car market share.Mobility management and vehicle management were projected to grow 5% and 15% annually, respectively.
  • Market development: Connected-car penetration was forecast to increase globally to 60%.The market is driven by consumer engagement and advances in network connectivity.
  • Market development: More than 36 million cars with pre-installed SIM cards were estimated to be sold by 2018, representing GBP 3.4 billion in potential global telecom revenue.Telecom players are one of the principal connected-car ecosystem groups alongside manufacturers, digital players, and insurers.
  • Opportunities for telecom players: Strategic partnerships between telecom players and car manufacturers are central because their roles and capabilities are complementary.Operators contribute connectivity and service-provisioning expertise, while manufacturers provide automotive capabilities.
  • Opportunities for telecom players: Operators can add value through billing, device and subscription management, roaming and location information, telematics platforms, maintenance, upgrades, and data analysis.The paper identifies telematics service-provider platforms as an additional operator opportunity.

C. Entertainment: Content Delivery and Gaming

Immersive entertainment, including VR, AR, wearables, and gaming, creates strong capacity and latency demands. Operators can respond through improved network delivery, partnerships, cloud-based services, and operator-network gaming models.

  • Content Delivery and Gaming: VR, AR, haptic devices, and other wearables are positioned as components of more immersive entertainment experiences requiring low-latency networks.The cited wearable examples include VR or AR goggles, 3D sound headsets, and haptic devices.
  • Market development: The global augmented and virtual reality market was forecast at GBP 118.5 billion by 2020, including GBP 23.7 billion for virtual reality.Virtual reality growth was associated mainly with games and 3D films.
  • Content Delivery and Gaming: Network operators can support immersive entertainment through intelligent traffic management, compression algorithms, and ultra-low-latency, high-throughput networks.These measures address the capacity and latency demands of VR content.
  • Opportunities for telecom players: Operators can add value through end-to-end service quality, collaborative fixed-wireless and terrestrial-satellite delivery, and B2B cloud-based secure platforms.The paper also identifies opportunities in service and content delivery through supplier partnerships.
  • Content Delivery and Gaming: An operator-network gaming model could increase revenues by letting users play online without downloading games.The model includes cloud-based gaming, converged home-and-mobile plans, and game advertising.

D. Industry Automation

Industry automation is moving toward intelligent, connected production using remote robotics and data-driven services. This creates opportunities for telecom companies to provide integrated communications, connectivity, security, platforms, and analytics.

  • Industry Automation: EU manufacturing represented about GBP 1890 billion, or 15% of GDP, while ICT accounted for GBP 755.7 billion of that market.Europe held 30% of the world robotics and factory-automation market and 33% of embedded digital systems, enterprise, and product-design software.
  • Industry Automation: The European Commission targeted manufacturing at 20% of GDP by 2020 and estimated GBP 84.1 billion in additional investment for the factory of the future.The target followed a 1.3% decline in manufacturing’s GDP share since 2008.
  • Industry Automation: Optimising current robotics and autonomous-systems technology was estimated to raise manufacturing productivity by up to 22%.The paper links this opportunity to remote applications using robotics.
  • Industry Automation: Telecommunications companies are expected to play an instrumental role by providing specialized data, connectivity, and security solutions.The industrial transformation is expected to bring increasingly specialized players into the value chain.
  • Opportunities for telecom players: Big data and advanced analytics were estimated to increase production volume by 20–25%.The resulting telecom business models center on technology platforms and data-driven services.
  • Opportunities for telecom players: Network operators should add value through ubiquitous machine and human communications, seamless wireless-fixed integration, interoperability, and unified network solutions.These capabilities support partnerships that deliver efficient and reliable end-to-end data and communications infrastructures.

VII. DISCUSSION: THE BUSINESS TRANSFORMATION, NEW ROLES AND MARKET POSITION FOR TELECOM PLAYERS

Ultra-low-latency services shift telecom operators from connectivity providers toward broader roles within multi-actor IoT-style business networks. Operators may choose technology-enabler or branded full-service strategies, while new collaborations and skills reshape market positions.

  • 5G delivery involves larger business networks and value configurations rather than cooperation limited to two network operators.The ecosystem becomes more complex as both the number and types of actors increase.
  • Ultra-low-latency services extend the business transformation already observed with IoT, changing telecom actors’ roles and market positions beyond connectivity.Industrial-vertical actors may own the core service and user relationship, while telecom actors support that service.
  • Network operators can focus on connectivity and service platforms while building partner networks for a fuller IoT offering.This strategy limits the operator’s role to technology enablers and relies on partners for additional components and capabilities.
  • Operators can alternatively offer a full service bundle under their own name and brand, with trusted partners supplying selected components.Partners may provide sensors, platforms, integration, or applications while the market-facing offer remains operator-branded.
  • Operators and telecom vendors must develop new roles, skills, and business relationships as customers increasingly include industrial actors rather than only end users.The resulting market positions differ fundamentally from those in traditional connectivity services.

VIII. CONCLUSIONS

The paper finds that ultra-low-latency 5G creates opportunities across several industry verticals, but operators must align network investment with market needs and ecosystem-oriented business models. Economic benefits depend on partnerships, co-created technology, and the business models chosen.

  • VIII. CONCLUSIONS: The study surveys ultra-low-latency requirements across healthcare, automotive and transport, entertainment, and manufacturing applications.These requirements are especially important for fully immersive and critical or safety-related applications.
  • VIII. CONCLUSIONS: Current 3GPP LTE Advanced and widely deployed fixed networks cannot meet the stringent requirements of these applications.This limitation motivates the development of new low-latency network capabilities.
  • VIII. CONCLUSIONS: Operators’ specific low-latency revenue depends largely on the ecosystem-oriented business models they select and the market they address.The paper emphasizes that network deployment efforts must correspond to a strong market need.
  • VIII. CONCLUSIONS: Entertainment and healthcare present clearer opportunities because online VR/AR and remote applications depend on capable connectivity solutions.The entertainment opportunity is linked to immersive experiences, while healthcare focuses on extending remote applications on the move and at home.
  • VIII. CONCLUSIONS: Telecom players can benefit from supporting 5G low-latency applications if new business models, partnerships, and industry-specific co-creation are established.The choice of business model determines the economic effect of 5G and low-latency-service revenues.
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