The road to 5G

07 Mar 2017

It’s not hard to find superlatives to describe the world 5G technology will create. This is the “fourth industrial revolution,” a world of unprecedented connectivity where the consumer experience will reach new pinnacles and artificial intelligence and machine learning will transform everyday life.

According to Qualcomm chief executive Steve Mollenkopf, 5G goes far beyond scaling up speed and bandwidth and reducing latency. Sure, we are being tantalized with the vision of a world where a 5-GHz signal offers speeds of up to 1Gbps for tens of connections, but what will it actually do?

“5G will have an impact similar to the introduction of electricity, or the car, affecting entire economies, and benefiting entire societies,” Mollenkopf told the recent Consumer Electronics Show in Las Vegas.

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“Today, billions of mobile devices with extraordinary power are uniting with advancements in robotics, artificial intelligence, autonomous vehicles, nanotechnology and so much more. Entire industries will change and emerge as data speeds go up and data costs come down.”

Sounds exciting, and it probably will be. But there is a lot to go through before 5G arrives in 2020, and another time lag before the technology starts to deliver on its promise.

In the meantime, milestones are ticking by as the telecoms industry matures. The original iPhone is marking its 10 year anniversary as operators like AT&T finally stop supporting it. Meanwhile 2G networks are being turned off in Singapore this year.

In the 5G world, vendors are teaming up with operators around the world to build their networks, tests are being completed and the results announced, but we are less than three years away from 2020.

How will that impact the business models of incumbent telcos? The advent of 5G has many of them paddling desperately to transform and survive.

Companies like Blackberry are betting their entire future on 5G, as their effort swings from manufacturing devices no-one wants anymore to creating software for 5G connected vehicles. The probability is that there will be corporate carnage in the industry as some dinosaurs become extinct, while new and better adapted species evolve.

Already, the advent of 5G is driving unprecedented industry collaboration. China Mobile, for example, is working with 40 global companies on its 5G offering and many of them - such as General Motors - are from outside the traditional ICT sector.

So the vision might be growing clearer the closer we get, but the likelihood is that 5G will be a slow roll-out, and no Big Bang. Right now we have LTE, and that seems to be delivering pretty well as the boundaries of 4G are pushed out.

According to the GSMA, there are four key applications which 5G can do which LTE cannot: augmented reality, virtual reality, the tactile internet and autonomous driving. One thing which is for certain is that the 5G networks won’t be cheap to build.

Major Chinese operators, for example, are about to spend around $45 billion by 2020 to achieve nationwide 5G coverage, an investment which could also have the benefit - for China - of its technology and services becoming the de facto global standard.

Investment of that magnitude will need some serious return on investment (ROI) if it is to pay off. Given that China is the world’s number one mobile phone market, with 1.3 billion subscribers, that could be a reasonable bet.

Add to that the fact that the Beijing Government is pushing the implementation of autonomous vehicles by 2025, and wants self-driving cars to comprise 10% of the market by 2030, and the 5G business case has a new dimension.

After all, it’s not just about delivering new services to smartphones. Autonomous cars are only one area of application. There are revolutions planned in health care and logistics, for example, which will totally transform the way services are delivered.

In South Korea, SK Telecom announced in January that it would invest $4.2 billion (5 trillion won) on new businesses based around artificial intelligence, autonomous driving, and the Internet of Things (IoT).


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