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5G - ready for business

Autonomous vehicles outnumber human drivers, making accidents and traffic congestion almost a thing of the past. Life-saving surgery is delivered by a team of experts, gathered from across the globe and assembled virtually. New products are delivered to consumers in days and weeks – not years. There is barely a distinction between the physical and virtual experience of a concert or sports fixture. In some cities, smart energy and pollution management means climate change has been reversed.  

These are not futuristic fantasies, but examples of a world we could soon be living in: the world that 5G – the fifth-generation standard for cellular networks and wireless connectivity – will create.

What is 5G?

Much more than a new generation of wireless connectivity, 5G is the technology that will transform our experience of the connected world – unlocking a wave of innovation across every area of our lives. From virtual reality experiences that will revolutionize consumer entertainment to robotics that will rewrite the rules of manufacturing and AI that will transform the healthcare provision, 5G will provide the foundation for a raft of disruptive technologies to reach maturity. 

“In a world that increasingly runs on the transfer of huge volumes of data, the step-change 5G will create in capacity, bandwidth and latency represents a megatrend that will catalyze multiple technological revolutions,” says Gabriela Styf Sjöman, chief strategy officer, Nokia. “Areas of innovation that have been gradually emerging – from blockchain to augmented and virtual reality, artificial intelligence, and robotics – will rapidly accelerate their development as 5G makes high speed, live-streaming data a reliable reality. In turn, our capacity to collaborate remotely, to operate autonomously and to manage resources more intelligently will increase by orders of magnitude. We will enter the era of digital-by-default.”

The path to 5G

path to 5G

Dr Sally Eaves, tech influencer and global strategic advisor, says that 5G is “not just an evolutionary development from 4G, it’s a transformational development, a big integrator and enabler. It’s empowering data and it’s offering us a whole new array of services, some of which we haven’t even imagined yet.  

"5G provides the bricks that everything else is built on. Without it we can’t talk seriously about technologies like AI or edge computing. The infrastructure is transformative, like the advent of motorways or the electricity grid. They were stepping stones that allowed major changes to happen. We should view 5G in a similar light.”  

In this way, 5G is set to provide not just new experiences but huge economic benefit: a study by Nokia Bell Labs Consulting (to be explored in full in the next chapter), has found that 5G has the potential to deliver $8trillion in value to businesses, economies and societies globally by the year 2030.

Yet many technologies are cited as transformative, and the path from idea to implementation can be longer and more complex than first assumed. It is important to understand why 5G is not just hugely significant in principle, but ready to be implemented in practice.

Acceleration and innovation

It’s been a volatile and uncertain year. The spread of COVID-19 initially seemed to undermine expectations that 2020 would be the year when widespread 5G deployment took hold. The immediate focus shifted from exploration, expansion and deployment of new technologies into corporate rescue and recovery. In many cases, spending stalled, business leaders had to manage risk differently, and critical industry gatherings fell by the wayside.

“For a short period of time, it looked like we might go backwards, rather than forwards,” Sally recalls. “But then the world responded. Businesses moved to remote working, schools introduced remote learning, and healthcare providers switched to telemedicine. As we adapted to ‘the new normal’, technology held up well, people quickly began to see the imperative of technology, and the business case for 5G became stronger than ever.” 

Research commissioned by Nokia and explored throughout the next five chapters underlines that, rather than stepping back from technology investment in the wake of the pandemic, large companies have doubled down. Of the IT purchasing decision-makers we surveyed in eight markets, 45% said they had accelerated their digital transformation programs as a result of COVID-19, compared to just 18% who have not.

How has COVID-19 impacted organizations’ strategic technology planning?

Impact of Covid

With the pandemic reshaping consumer behavior and working patterns, companies have had to provide more virtual experiences to both their customers and employees. As the research suggests, that has made the imperative for technology investment greater. 

“The significant increase in demand for connectivity resulting from virtual working positions 5G as a growing necessity, not a luxury,” says Gabriela. “A third of decision-makers in our survey identified ‘improved connectivity of the workforce’ as a benefit they expect from future investment in 5G, likely due to the fact mobile connectivity of the workforce remains a number one priority for IT teams. 31% also pointed to increased workforce productivity and 28% increased collaboration. Meanwhile 34% said that they fear being outpaced by the competition if they don’t implement 5G and 28% said they believed growth will be impaired.”  

Leaders’ fears for their organizations if they fail to invest in 5G in the next three years

Leaders fear

A recent report by the European Commission’s 5G Observatory underlined the growing importance of 5G in a world more reliant on virtual interaction, noting that “in the medium to longer term, it is likely that this crisis will increase the awareness for the need for digital solutions, e.g. in telehealth, increased teleworking (which also calls for higher network capacity and bit rates), fixed wireless access and many features supported by 5G networks.”

COVID-19 flagged these deficiencies in organizations’ technology road maps

COVID-19 flagged deficiencies

While the pandemic has brought the need for next-generation wireless connectivity into the foreground, 5G’s emergence is also being expedited by specific regulatory and technical developments. By the end of this year, EU member states are mandated to have made ‘pioneer bands’ available to providers, and at least one spectrum auction is planned in all 26 countries. In the US, the Federal Communications Commission (FCC) held the largest spectrum auction in its history during August 2020, selling thousands of licenses, with more mid-band auctions planned for later in the year. 

Governance has also progressed, with the publication of Release 16, a new set of global standards for 5G that will provide the foundation for some of its most important use cases, from allowing vehicles to connect and communicate directly, to single-tower location mapping, and private network capabilities that will be needed to unlock the intensive needs of Industrial IoT and robotics. Release 16, Sally comments, “is incredibly significant. It goes into so many different areas that weren’t covered under previous standards. The way this has been put together will open up so many new use cases for the future, especially in automotive and industrial IoT.” 

It also, she believes, reflects a growing acknowledgement that collaboration is needed to unlock the full potential of 5G and the benefits it offers to society. “If we don’t collaborate, customers will suffer because there will be a slowdown in innovation, prices will go up and societal transformation will be held back. We need to foster more and more collaboration so we can avoid people being left behind. This is a business and societal issue.”

The tipping point

The combination of mature technological capability, spectrum availability, significant advances in governance, a reinvigorated appetite for innovation across the public and private sector, and cultural readiness for change at a global level, means that we are approaching a defining moment for 5G. 

Yet barriers to adoption remain. According to our research, awareness, investment and adoption vary significantly between different countries and industries. While there are some successful early movers, many have catching up to do. 

In other words, while the potential for 5G could not be clearer, there is still much work to be done.

The following chapters in this report will examine that path to progress – how the economic value of 5G will be realized, who is leading the charge, and how key challenges can be overcome. 

Next: Bell Labs Consulting on the economic benefits