the companies will be the first beneficiaries of the 5G
While 5G will account for 1.8 billion connections by 2025, GSMA predicts that a large part of them will be generated within companies.
GSMA, the professional organisation of the mobile industry, has published its annual analysis of the global state of the mobile economy. Not surprisingly, it is dominated by 5G trends. Like many other industry experts, GSMA expects 2020 to be a pivotal year for 5G, that will go from a simple advertising argument to a concrete reality... but only if network operators persuade their customers that the move from 4G to 5G is worth it.
While statistics released by GSMA show that one in five mobile connections will run on 5G by 2025, representing 1.8 billion connections, the report notes that “4G is still the queen”. More than half of global connections are currently supported by 4G, and this proportion is expected to reach 56% by 2025.
From the point of view of consumers, the desire to switch to 5G is by no means automatic, although attitudes towards this technology vary from one country to another. European, Japanese and American customers “seem more satisfied with 4G so far,” according to the report, with only about 20% of the public planning to move to 5G. While in China, 70% of respondents indicated that they plan to move to 5G.
A potential still unknown
In addition, many users are not aware of the real potential of 5G. The majority of respondents said they expected this technology to improve the speed of mobile data transmission, while only one-third acknowledged that 5G could provide “new and innovative services”.
It is true that many faster connectivity applications will benefit the industry rather than consumers, and the argument that 5G use cases will primarily affect businesses is now well known. Indeed, one of the report’s predictions for 2025 is that “5G is becoming the first generation in mobile history to have a greater impact on businesses than on consumers”.
However, many companies are still reluctant to move to 5G because they don’t see what more technology will bring than 4G. While a majority of companies “recognize the benefits of 5G speed gains,” explains GSMA, «other improvements (such as network cutting, advanced computing and low latency services) are not widely appreciated, many believing that 4G remains "pretty good".
A delicate deployment
Lack of public awareness is not the only barrier to faster connectivity; GSMA’s analysis has pointed out that challenges persist at the level of deployment itself. Indeed, the deployment of 5G is not without cost: operators are expected to invest around $1 trillion worldwide over the next five years, 80% of which will be dedicated to 5G networks.
A substantial investment that comes at a time when operators' incomes have been stagnating in recent times. At the same time, Apple, Amazon and Alphabet have each seen their revenues increase from $100 billion to $200 billion since 2010, while those generated by mobile phone operators have either stagnated or experienced much slower growth than before.
To survive, network providers will need to find revenue sources outside of their telecommunications services. The report suggests looking at areas such as pay-TV, media and entertainment, or advertising.
Towards industry 4.0
But despite the challenges faced by 5G, GSMA has predicted that this technology will bring two thousand two hundred billion dollars to the global economy by 2034, with the emergence of major use cases in the areas of autonomous vehicles and intelligent manufacturing. Low latency and ultra-fast connectivity will effectively revolutionize factory workshops, real-time remote monitoring of robots and processes to the use of 5G augmented reality simulations to better train the hand-and increase productivity.
“The ultimate goal of smart manufacturing would be an independently controlled plant,” the report states. A first example of the benefits of smart factories is the mobile phone factory operated by the Changying Precision Technology Company in Dongguan City, China. Opened a few years ago, the plant replaced 90% of its human workforce with 60 robotic arms working 24 hours a day. The results are convincing: automation has led to a 250% increase in productivity and an 80% decrease in defects.
In order to achieve similar results on a larger scale, GSMA stressed that the efforts will have to come jointly from industry and government. Public policies need to be directed towards faster and more efficient deployment of technology, for example by simplifying and standardizing planning procedures and site acquisition regulations.
The Frequency Puzzle
The report showed that nearly 70% of network providers indicated that limited access to radio spectrum was the main obstacle to their 5G network investment project. Governments should, therefore, ensure that operators have easier access to the frequencies they need to operate their networks.
However, spectrum allocation is an ongoing problem in Europe, where operators still have to pay huge amounts to access limited resources. European political obstacles may partly explain the geographical differences in the use of 5G foreseen by GSMA.
While in the United States and China, about half of mobile connections in 2025 will be 5G, according to the organisation, the same statistic falls to 34% in Europe. It remains to be seen how the start of the 5G on the Old Continent will go.
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