Recently, I met a customer and we started to talk about the opportunities of vertical markets. What is vertical market? If you searched Wikipedia, the explanation is as below:
“A vertical market is a market in which vendors offer goods and services specific to an industry, trade, profession, or other group of customers with specialized needs.”
There are many vertical markets and each one has its own industrial culture and practice. Nowadays, the telecommunication market is very competitive. A vertical market will give companies, especially small and mid-size companies, opportunities to survive and even grow.
In my domain, I noticed that some vertical markets are sticking to old technology. One of the examples is the public safety or mission critical communication market. It can be subdivided into several verticals: police & law enforcement, firefighting, emergency medical services, border security, and military & defence. In fact, the same old communication technology is also being used by other vertical markets such as public utilities, transportation, commercial & residential security, mining & oil, manufacturing plants, etc. The communication technology of these markets is dominated by the land mobile radio/trunk radio system for several decades. The system is voice based and narrowband. Cost is high but user experience is bad. There are many reasons for not moving to a broadband network, such as the lack of the regulations & standards, spectrum allocation, readiness of network, government policy, knowledge & expertise of users. However, I believe the key catalyst for change should be initiated by the government.
In some countries, they are very open and fast moving to adopt new technologies. A good example is South Korea. The government is encouraging and pushes enterprises to move to new technologies. For example, railway communication in South Korea is going to have a dramatic change. They are building their high-speed train and will use LTE-R as the communication technology. LTE-R was developed for next-generation mission-critical communication dedicated for railway operations and maintenance. What sets 4G or 5G based LTE-R apart from the analogue or 2G GSM based technologies is that they provide stable multimedia services. Compared to the one-to-one voice call service between the control centre, station employee and the train engineer that has been available so far, LTE-R technology enables multimedia-based group call services on top of the voice call service. This technology better equips rail operators in case of any accidents because it transmits real-time video of the station to the central control centre. Additionally, real-time group/individual communication is made possible between the train engineer and control centre.
Another thing that I would like to highlight is that such vertical markets need a lot of local customization. Different countries have different call scenarios and topologies. Of course, the infrastructure is usually dominated by the key vendors, such as Nokia, Airbus, Ericsson or Huawei. But for the application level, it will be the place for local companies and usually they are small and mid-size companies. Take the same example of South Korea – there are several active players in LTE-R that are not big.
I strongly believe that mission critical communication is just one of the examples of moving from legacy technology to IP broadband communication technology. There should be similar situation for other verticals. When the communication is moved to IP broadband, it provides flexibility, scalability and extensibility. Innovation can be added and creativity is unlimited. It is also an opportunity for local companies and a stimulus for the local economy.
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