Augmented Reality for Telecom Operators & How it can Boost the AR Market?

Within the last year (2020), activities around AR/VR/MR market with telecoms have been bubbling. This is especially true with all major Japanese telecom operators (NTT Docomo, KDDI, and Softbank). For example, NTT Docomo has established a new venture, Fukugo-Genjitsu-Seisakujo, INC, looking at the development of XR services targeted towards different processes in industrial applications. (e.g., design, manufacturing, and inspection). KDDI partnered with Nreal, the Chinese AR device firm, to bring its product into the Japanese market. Softbank has also joined the Niantic Planet-Scale AR Alliance (that brings together telecom operators to work on 5G content), the only Japanese telecom operator to do so.

Such developments are not limited to Japanese telecom operators but also for operators globally. Operators such as SK Telecom in South Korea, the 3 major telecom operators in China, Orange, T-Mobile, Verizon, Telefonica have partnered with Qualcomm to drive the development in Extended Reality (XR) viewers of the future. LG Uplus in collaboration with Nreal announced a 5G enabled AR device, called U+ Real Glass that will be available in August 2021 and will support LG Uplus’ 5G-based AR content. Showcases of the 5G-based AR experiences have also surfaced with AT&T and SK Telecom, among others, bringing the AR experiences to consumers.

Augmented Reality (AR) is a fundamental technology which transforms the way individuals, enterprises interact with and utilize the space around them. Although, there are some limitations that need to be addressed in order to enable AR technology to reach its full potential and bring more value to use cases for consumer and enterprise. More specifically, achieving multiuser collaboration in combination with persistent AR content in the real world across space, time and devices is essential. Persistent content means that it does not disappear from session to session and allows users to access it and collaborate synchronously or asynchronously.

For AR to grow, it needs to overcome the challenges mentioned above. This could be done by the scale deployment of AR Cloud which thereby transforms the way AR content are being utilized and engaged by users. AR Cloud, to simply explain, utilizes a few key technologies to achieve the persistency of the content and allow for accurate localized AR devices. This is done by leveraging the camera and computer vision to determine the characteristics of the objects and the environments. A more extensive discussion around AR Cloud is available in ABI Research’s repot AR Cloud: Enabling Technologies, Use Cases, and Market Dynamics. While there are other important enabling technologies such as spatial mapping and machine learning, what is also crucial is how connectivity (i.e., 5G) plays its role when it comes to AR Cloud. Telecom operators with their 5G capability can provide fiber-like connectivity for AR and VR devices.

5G will be able to improve the overall efficiency of localizing the AR content to the physical environment. This is achieved with the lower latency of 1 to 10 millisecond which 5G can provide depending on the frequency band utilized. This latency will allow the virtual content to respond to the users’ interaction with the space and environment, thereby enhancing the overall user experience. The accurate and fast real-time information flow to capture the changing dynamics of real-time environment is critical for AR to take center stage in various industries such as retail, logistics, or manufacturing. In a collaborative environment (e.g., retail, gaming), 5G enables the multi-users interactions with its wider capacity and provides support concurrently for multiple users.

For telecom operators, AR/VR products and services are new areas which could be provided to their users and complement their mobile subscriptions. New service areas need to be captured which can bolster the revenue of telecom’s consumers and enterprises segments. For telecom operators, it is therefore essential that they are part of the ecosystem to tap into the potential of AR. This could also help create the differentiating strategy between telecom operators. From the hardware, software, to the content creation studios, the telecom operators should seek out partners which best suits the demand they expect from their users. However, this dependency is not one-way traffic. Telecom operators can be important enablers for the following reasons:

1. Given the role 5G plays in enabling AR Cloud and the future of AR market to take off, the AR ecosystem will benefit from the involvement of telecom operators. This stems not only from the technological point of view but also in bringing the hardware/products to mass market adoption through the telecom operators.
2. The mobile devices are likely to be the dominant terminal for AR related applications through to 2024 and beyond. Mobile devices have an extensive broad user base, advanced cameras, enhanced graphics, dedicated Extended Reality (XR)-enabled processors, and 5G makes it easier for the delivery of AR features and content. Telecom operators traditionally sells users a mobile plan with a smartphone. This makes it easy for telecom operators to include in their marketing pitch to promote AR and related contents, which can be a differentiating strategy. Think about how different programme channels are provided differently by telecom operators or 3rd party vendors.

Connectivity is essential for AR cloud applications and the total revenue from AR connectivity is forecasted to reach US$11.4 billion in 2025 with a 55% CAGR from 2021. The topic of 5G have been explored and talked about extensively by the market. With more and more countries rolling out 5G, we will start to observe where 5G will and are being used to generate the real values for both consumers and enterprises. For one, the AR market will be interesting with the telecom operators being an important part of the ecosystem.