ISAC will be the Next Big Thing in Telecom

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On Sept. 15, Ericsson hosted industry analysts at the Boston Public Library. The company focused on industry trends and how its portfolio and partnerships intersect with them. The event covered the company’s major enterprise- and government-related portfolio areas at a high level, including private networks (Enterprise Wireless Solutions and Mission Critical Communications), network APIs (Vonage), and financial services (Ericsson Mobile Financial Services). A slate of partners and customers also participated in some of the sessions to delve deeper into market trends and how ecosystem partnerships are helping Ericsson address market needs.

Ericsson is best positioned to lead Western ISAC deployments

Among the ideas for how the telecom industry can derive new revenue from networks, integrated sensing and communication (ISAC) holds the most promise, and Ericsson is positioned to be one of the biggest beneficiaries of this trend. Regardless of who owns and controls ISAC systems (e.g., communication service providers [CSPs], government and defense entities, enterprises), more radios will be deployed in the field to monitor environments such as lower airspace for commercial and national security reasons. Governments worldwide are exploring solutions to strengthen national security and prepare for a future where lower airspace and land-based transport systems become more congested and increasingly intertwined with digital systems like autonomous vehicles.
 
TBR believes Ericsson is the best-positioned RAN vendor to support ISAC in the Western world because it remains hyperfocused on RAN innovation and holds the largest market share in mobile infrastructure when excluding China. Western governments also view Ericsson as a trusted supplier of critical technology. The company’s sprint to obtain security clearances and other certifications to support government initiatives also puts it in an advantageous position to win related deals across the public sector, not only in ISAC but in the broader domain of mission-critical communications.

Impact and Opportunities

ISAC gains momentum

ISAC is one of the most relevant technologies currently being developed in the telecom sector. ISAC essentially turns the network into a radar system, capable of generating data such as location, velocity, and elevation, and identifying moving objects. In an era where warfighting increasingly relies on drones, ISAC is being assessed by the top levels of government and military forces globally. Evidence suggests all major defense-oriented nations are at least thinking about solutions that can map and monitor lower airspace, which is where the drone threat is most acute, as drones typically evade existing radar systems.
 
CSPs have an obvious role to play in ISAC, but the question remains how and to what extent. CSPs will need a clear monetization path to commercialize ISAC at scale. Other economic models are in the running, including governments buying their own private ISAC systems separate from CSP control, though these control points will likely be co-located, at least in part, on top of commercial, terrestrial networks.
 
There may even be multiple ISAC systems operational in a given environment, one controlled by the government and/or military and one or more run by a commercial player for commercial purposes (e.g., coordinating drone package delivery or flying taxis). In each of these situations, and regardless of whether the CSP is involved in the economic structure, RAN vendors like Ericsson would stand to benefit from the deployment of these systems as they would drive additional need for radios and core products and services.
 
The beauty of ISAC for the telecom industry is that there is no need to wait for the 6G specification to become commercially available; usable ISAC solutions can already be implemented using 5G Advanced and 5G core. ISAC trials are underway, and commercial deployments are expected to begin in 2027.

ISAC will drive incremental RAN investment

ISAC can leverage existing 5G network infrastructure, particularly Massive MIMO radios, though standardized ISAC remains an emerging capability that will mature through 5G-Advanced and 6G. Existing cellular networks were primarily designed to provide terrestrial coverage, meaning their antenna patterns and network configurations are not optimized for sensing lower airspace. Use cases such as drone detection will therefore require greater elevation-domain coverage, which can be enabled through beamforming, radio and antenna configuration, and potentially hardware upgrades where existing infrastructure is insufficient. Massive MIMO is particularly well suited for ISAC because its large antenna arrays and beam-steering capabilities can improve sensing coverage, accuracy and resolution.
 
TBR expects ISAC to create an incremental RAN products and services opportunity for RAN vendors such as Ericsson as network operators add sensing software, signal processing and edge compute capabilities and optimize their networks for sensing. One of the key benefits of ISAC, however, is that network operators can reuse much of their existing infrastructure, including sites, spectrum, transport and, in some cases, radios, limiting the need for large-scale network overlays. Investment beyond the RAN will also be required for sensing control, data processing and service delivery, but the larger opportunity is likely to come from integrating the RAN-based sensing layer with defense, public safety and commercial applications that consume and act on the sensing data.

Advanced private networks still rely heavily on government funding

Success stories about what 5G can do in enterprise environments are plentiful now, but the important consideration is whether these solutions are ROI-positive for the entities they are meant to benefit. Many advanced uses of private 5G networks rely on government sponsorship to get off the ground, including grants and tax breaks. One such example is how certain enterprises in Singapore are working with the telecom industry, especially SingTel and Ericsson, to show how advanced networks can deliver superior results, as demonstrated with the National University Health System in Singapore.

6G will be iterative on top of a 5G foundation

5G New Radio and 5G core are expected to migrate seamlessly to 6G specifications once standards are ratified. Many in the industry, TBR included, believe 6G will primarily be software-based upgrades on top of a 5G radio and 5G core foundation. Yes, net-new radios and core elements will likely be required as well, but giving operators an easier glide path to adoption of new capabilities will be the best path for the industry as it will provide CSPs with a more economical way to make the transition. With that said, new spectrum bands are expected to be in play leading up to the 6G era, many of which will require new hardware. AI RAN and edge computing will also likely drive some additional CSP investment, but the question remains when this will become meaningful.

Ericsson is making progress in the defense sector

Ericsson achieved several critical certifications over the past 12 months, including a top-level security clearance in the U.S., which enables the vendor to begin playing a more significant role in the rapidly growing defense communications sector. The vendor was also selected to be involved in the U.S. government’s SHIELD program, which includes the Golden Dome initiative. Ericsson will still struggle to muscle its way into a prime contractor position against incumbent defense contractors like L3Harris, Raytheon and Lockheed Martin; a partner model with the primes is likely the best path forward to monetizing opportunities in this sector. (TBR notes that Ericsson did not mention by name in presentation materials or have any defense partners participate in this year’s Ericsson Industry Analyst Day.) Specifically, Ericsson’s products can support aspects of mission-critical communications and command and control systems, including ISAC.

FOMO may catalyze demand for certain network slices

A trend is emerging in which leading CSPs offer prioritized connectivity for a premium price. In many cases, these slices are offered as part of special events like sports games and concerts, where a certain cohort of consumers may be willing to pay extra for better quality of service (QoS) during the event.
 
TBR believes this trend aligns with the K-shaped economy, marking a departure from the best-effort-for-all connectivity model of the past. However, in the case of telecom, the idea that connectivity QoS may degrade if people are not willing to pay more could drive some level of FOMO (fear of missing out) among participants in a given situation.
 
TBR notes that FOMO is a powerful driver of user behavior in other industries, such as travel insurance, where a cohort of travelers will pay extra up front for something they may or may not actually need to have peace of mind. Network connectivity services are similar. One mechanism for CSPs is to partner with ticket distributors such as Live Nation, which also owns Ticketmaster, where ticket buyers would be prompted at the point of sale to consider buying a special connectivity package with their ticket. Insurers already offer this at scale through similar partnerships, and it has proven lucrative.

Conclusion

ISAC is emerging as a potentially significant new growth opportunity for the telecom industry, and there is no need to wait for 6G; ISAC can be implemented now with existing 5G RAN and 5G core products. Regardless of who owns ISAC systems, Ericsson would be one of the biggest beneficiaries of this trend due to its leading position in RAN and strong position in core.
 
Network slicing also holds promise for the telecom industry, with CSPs increasingly offering these capabilities, but success will depend on ecosystem partnerships and clever marketing.