What's behind the race to 5G?
In name, it may feel like just one small step from 4G. But the fifth generation of cellular networks represents a huge leap for industry and society.
In 2020, research conducted by Nokia Bell Labs found that 5G has the potential to contribute $8 trillion to global GDP by 2030, with industries as diverse as mining, entertainment, transportation and healthcare all set to reap enormous benefits.
Buzz has been building around 5G for some time now. But when should we expect to start seeing the benefits of the next-generation network, and where will it be felt first?
5G is rolling out faster than any previous generation of mobile network
Over 550 5G-ready devices had been announced by January 2021, with nearly 60% of them commercially available. The number of 5G subscribers is growing faster than for any previous generation, too – reaching 17.9m in its first four quarters. Compare that with 4G, which took 10 quarters to reach the same milestone.
The COVID-19 pandemic initially slowed the progress of 5G, but it soon turned into a catalyst. As people became reliant on communications networks for work, education and social contact, the need for high-speed, high-bandwidth connectivity became acute and many operators redoubled their 5G deployment efforts.
What’s behind the rapid uptake of 5G?
There are two main drivers behind the rapid rollout of 5G. The first is a looming capacity challenge with 4G/LTE. Demand for mobile streaming video in particular is testing the limits of fourth-generation networks in congested areas.
With continued growth in data traffic, there’s indications that 4G/LTE will hit a capacity limit
By adding vast amounts of capacity to the network, 5G will open up new consumer entertainment possibilities – including high-definition streaming on the go and glitch-free cloud gaming on mobile devices. Its ultra-fast speeds mean many consumers may choose to use it for home broadband, too.
The real promise is in the enterprise
But the real promise of 5G lies in its potential for the enterprise. With its increased bandwidth, ultra-low latency, enhanced security, and the ability to connect one million devices per 0.38 square miles, 5G will make possible many new and transformative applications of technology.
It will enable equipment and vehicles to be controlled remotely, making operations like mining and inspections safer. It will be the enabling network for adaptive city infrastructure (think road systems that automatically divert traffic if there’s an accident, or when air pollution levels reach a certain level). In healthcare, it will enable doctors to conduct remote diagnoses and even remote surgery.
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Combined with AI capabilities at the edge of the network, it will accelerate the introduction of autonomous vehicles, capable of sensing and responding in real time to their surroundings. It will take remote work and learning to a whole new level, enabling people to meet, interact and carry out tasks in rich virtual reality or augmented reality environments.
In manufacturing, meanwhile, private deployments like the one at our own ‘factory of the future’ in Oulu are already showing how 5G networks will – among other things – enable robots to navigate and collaborate on the factory floor, and intelligent video analytics to monitor operations 24/7.
When will we start to feel the benefits of 5G?
The potential applications of 5G often sound futuristic, and many still are. But the present is quickly catching up.
While most of the current deployments are non-standalone 5G, leveraging existing 4G/LTE infrastructure, we’re now starting to see the first 5G standalone networks being built. They draw on the technical specifications in Release 16 of 5G to bring lower latency for industrial uses and new capabilities like network slicing to create dedicated bandwidth for specific applications.
Companies are getting on board, too. Just over one-quarter (26%) of the companies we surveyed for our enterprise 5G readiness report are starting to implement 5G technology now, with 7% already using it in their operations. Geographically, Saudi Arabia and the United States were leading the way, with 13% and 12% of organizations respectively ranking as 5G-mature.
As the technical specifications of 5G continue to evolve, and more spectrum becomes available for 5G communications, we’ll start to see some of the more advanced IoT and edge AI applications of 5G become reality from 2022 onwards.
What needs to happen for the promise of 5G to become reality?
But the 5G revolution won’t happen on its own. A few things need to happen for industry and society at large to enjoy its full potential.
Firstly, government need to make spectrum available for operators to deploy 5G services. Spectrum auctions are underway in earnest around the world, paving the way for an imminent explosion in 5G availability and 5G-powered innovation. But spectrum alone isn’t enough: governments will also need to build regulatory frameworks that incentivize investment in 5G networks and infrastructure.
Companies too, should move now to understand the benefits that 5G can deliver to their business, and if they haven’t yet done so, start planning for its implementation. There are huge advantages to be gained now, from facilitating remote working to enabling new services and operating models.
As Nokia’s Chief Strategy Officer Gabriela Styf Sjöman says in our 5G Readiness Report: “To capture the tremendous opportunities of 5G, organizations must start or intensify their planning now and accelerate business model innovation to remain competitive in a rapidly digitalizing global economy. Beyond investment in the technology itself, this will require modernizing operations, processes and ways of working to capture the full potential of 5G”.
A huge opportunity for CSPs
Communications service providers (CSPs) also have a key role to play. As well as providing and managing the networks, there are many opportunities to act as an expert adviser to government and industry, guiding organizations of all kinds to make the most of 5G’s potential.
There are many attractive new business models to explore, too – from developing new service bundles, to deploying blazing-fast private 5G networks, to partnering with connected equipment providers to offer innovative new capabilities.
As 5G opens up thousands of new use cases across industry and society, CSPs have a chance to redefine their role and find new routes into exciting and high-value markets. While those that move early will have an advantage, the race to 5G is one where ultimately everyone wins.
Dive deeper with our 5G Readiness Report
Our 5G Readiness Report takes an in-depth look at the current state of 5G planning and adoption across organizations, industries and countries. Read it now and learn more about:
- The economic potential of 5G
- Current readiness by industry and country
- Use cases driving 5G adoption today
- Barriers to business adoption – and how they can be overcome
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