Of all the innovations introduced with 5G SA, RedCap technology is the one likely to have the biggest immediate impact
The industry transition to 5G Standalone (SA) has taken longer than some expected, mostly due to the complexity of shifting from traditional telecom networks to the highly dynamic, cloud-native architectures of 5G SA. But there’s a very good reason to make the effort: 5G SA opens up significant new monetization opportunities that aren’t possible without it.
In Spirent’s recent 5G Report, we noted that telecom operators are making real progress in 5G SA — progress we saw firsthand across more than 50 testing engagements in 2024. Now, the market is starting to see the fruits of these efforts as operators take new 5G SA-enabled offerings live. Multiple early use cases are emerging that solve key business challenges affecting enterprises, governments and industry — and open promising new revenue streams for telecoms.
RedCap: The IoT game-changer
Of all the innovations introduced with 5G SA, the one likely to have the biggest immediate impact — potentially launching new application ecosystems — is RedCap technology, or “Reduced Capability for the Internet of Things (IoT),” which was standardized in 3GPP Release 17.
Designed to run natively on 5G SA networks, RedCap bridges the gap between simple low-power/low-bandwidth IoT devices, like basic sensors, and higher-performance endpoints like smartphones or high-end surveillance cameras. RedCap can support higher traffic volumes with lower latency than previous IoT connectivity options like Narrowband IoT (NB-IoT) and LTE — Machine Type Communication (LTE-M). It also supports more advanced mobility and reliability for endpoints like smart wearables or industrial controllers, enabling things like real-time analytics and video processing for a fraction of the cost of full-featured 5G radios.
This “IoT middle ground” represents a significant untapped opportunity across multiple use cases, including:
- Manufacturing: RedCap can extend lightweight connectivity to a wide range of industrial equipment and sensors. Combined with private networks, it eliminates the biggest barriers to large-scale industrial transformation, empowering manufacturers to instrument and automate their environments at a much lower cost than with traditional cellular modems.
- Smart Grids: Water and power utilities are equally excited about RedCap’s ability to enable more granular and proactive monitoring of critical infrastructure across vast regions, while keeping connectivity costs low.
- Smart Cities: Until now, Smart City deployments have mostly been limited to small pockets of innovation. With the flexibility and low costs of RedCap, even advanced Smart City applications like automated parking systems, smart traffic control systems and smart environmental systems become broadly accessible.
Why RedCap matters now
This is not the first time you’ve heard about Smart Grids, Smart Cities or other advanced IoT applications. So, why do industry stakeholders expect broad uptake of these use cases now, when it hasn’t quite materialized in the past? First and foremost is cost. RedCap modules can be up to 80% less expensive than conventional 5G radios, dramatically reducing barriers to entry for more advanced IoT use cases and making broad adoption possible. Based on the latest 5G standards, RedCap also offers greater longevity than legacy IoT technologies, an essential requirement for Smart Grids and Smart Cities, where equipment may operate in the field for a decade or longer.
RedCap also simplifies IoT implementations, enabling organizations to use 5G across their entire deployment instead of stitching together multiple dedicated networks using different standards. Additionally, as legacy standards like Narrowband IoT and LTE-M near end of life, RedCap offers a sustainable, scalable, cost-effective platform for future IoT deployments.
Capturing early opportunities
RedCap IoT may be the biggest early 5G SA use case, but it’s far from the only one. Other opportunities include:
- Mission-critical push-to-talk (MCPTT) communications: T-Mobile was among the first to launch 5G SA-enabled MCPTT last year, targeting emergency responders, police and other mission-critical and safety-critical use cases. Now, more operators are launching these services, often as the first new offering brought to market after completing 5G SA rollouts. MCPTT showcases what advanced 5G networks can do, opening immediate new revenue streams. But it also demonstrates the maturity of network slicing, providing a blueprint for further expansion into the enterprise. If telcos can support dedicated slices for critical life-and-death applications, they can certainly tailor slices to the operational requirements of industrial and enterprise customers.
- Temporary and event-based network slices: Operators are also monetizing 5G SA via temporary network slices for sports championships, concerts and other high-profile events that create short-lived spikes in demand. During the coronation of King Charles, for instance, broadcasters and operators showcased the reliability and capabilities of 5G slicing on the world’s biggest stage. Here again, early use cases pave the way for slicing packages targeting smaller events and temporary deployments of all sizes, further expanding the market.
- Transportation and rail networks: The transportation sector, especially railways and automotive safety, offer additional avenues for monetizing 5G SA. In Europe, the legacy GSM-R technology used in most rail networks is approaching obsolescence, driving demand for a modern, reliable alternative. 5G SA is perfectly suited to meet these stringent requirements. In the automotive space, manufacturers are using 5G SA to meet emerging standards for critical communication and safety systems, with regulatory bodies increasingly linking vehicle safety ratings to 5G capabilities.
What makes this moment different
The rapid success of these use cases stands in contrast to earlier phases of 5G evolution, where network upgrades did not always deliver the market reception or revenues that operators hoped. Why is this time different? First, operators are no longer pitching abstract network features. They’re delivering tangible solutions — RedCap IoT packages for Smart Grids and Smart Cities, 5G private networks for industry, temporary network slices and MCPTT — to real business challenges. Additionally, operators have already validated these use cases in military and government contexts. Now, it’s simply a matter of repackaging them into scalable market-ready solutions for enterprises and industry.
The biggest change, however, comes from 5G networks themselves. 5G SA was designed explicitly to support more complex deployments, with a very high density of devices handling higher traffic volumes and performing more advanced operations. These networks also support more advanced systemwide security, as well as intelligent traffic handling to ensure that growing IoT traffic doesn’t degrade quality for conventional mobility customers. For the first time, operators have networks that can deliver all of that at scale, making diverse new 5G revenue streams not just possible, but sustainable.
