5G, Who?

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Recently I had a chance to be involved in a research project on the micro-economic impact of 5G on urban metropolitan regions. A deep dive in the invisible networks above our heads with high pay-offs, but for who?

Far from being implemented

The question to be asked here was one concerning the added value that 5G can deliver in terms of economic value for an urban context. After conducting a few interviews, it soon became apparent that 5G is currently far from being implemented, but also that it was not immediately clear who was actually eagerly anticipating 5G. A clear incentive was noticeable for the local telco operators, there was also an urge for suppliers of broadband antennas and other 5G-related equipment to be able to work with 5G, but for the end user (residential or industrial) there was not much to say at that moment.

The operators and suppliers saw great added value in the fact that 5G will allow mobile surfing at higher speeds, will be more efficient in terms of energy consumption and will have an ultra-low latency. In this way users can seamlessly use broadband internet both at home and on the road. They will be able to watch 4K, 8K and even higher resolution films on a mobile device and autonomous vehicles will experience less latency when processing and communicating data for their autonomous navigation.

The greatest added value of 5G

Having said that, the aforementioned use cases mainly connect with a residential use of 5G. This segment of the market is large in terms of number of end users, but in all likelihood, not willing to pay an additional cost for the use of 5G, nor for the updating of the regional network, but this is not the crux of the story. The greatest added value of 5G appears to be situated in the possibility of dividing the network into slices, just as a server can divide its working memory and storage over different virtual machines. This type of use case can be important in guaranteeing broadband capacity for critical business processes or for services that can be of vital importance to citizens. In this way, it seems that the biggest change that 5G can bring about lies with the industrial actors and governments.

So, what does that mean for operators? Well it means that the business model for operators will need to be complemented with the provision of 5G services that cater specifically to industrial actors and government actors, as these actors will need support in implementing 5G driven solutions. Much of the developments in terms of edge computing for industrial applications are dependent on current and future developments in chipsets that can be integrated and used for IoT purposes. As the scientific world predicts, those will allow most of the computational effort to remain on the sites where the IoT devices are being used.

Willingness to pay additional fees

Whilst operators will need to address the added value of 5G for these industrial use cases, these industrial actors will also need to invest in new complementary mobile technologies that allow them to truly take advantage of the 5G technology. Providing an answer therefore on the question, who is sitting around waiting for 5G, we can conclude that the group of people consisting of the producers of edge computing solutions, those providing the network infrastructure and needed technologies and those who manage and exploit these networks, clearly stand to gain from the implementation. It does remain to be seen however if industrial and residential actors will be willing to pay additional fees for services that they do not yet see the value for.

To be continued.