The dawn of a new technological revolution is upon us. 5G will impact our lives in more ways than we think. Unlike its predecessors though, 5G is a technological paradigm shift, probably similar only to the shift from typewriter to computer. 5G will become the enabler of an entire ecosystem of fully connected intelligent sensors and devices.
The new technology has the potential to unlock up to $12.3 trillion of revenue across a broad range of industries, these being just the most obvious ones:
5G will facilitate manufacturing with the integration of Artificial Intelligence (AI), which will upgrade the factory machines with self- learning capabilities, improve the manufacturing process by promoting efficiency. AI will create fully automated factory spaces that can be invested in by new market entrants looking for manufacturing facilities.
The 5G framework offers cloud and edge computing power, which will lead on to robotic connection and change the dynamic to a more flexible & safe factory environment. Better connectivity with 5G will enable the machines to become more precise with robotic inventions taking over hazardous tasks from humans, reducing injury in the workplace and eventually cutting costs.
5G in the Healthcare industry is increasing connectivity with electronic health records, which is starting to create a ‘Digital Health Ecosystem’.
Technology startups are inventing wearable devices, which allows tracking of patient progress and communication with a healthcare professional at never before seen speeds.
5G will inevitably increase efficiency, cost-effectiveness and innovation within one of the largest industries. Innovative developments will increase with AI data collection that will upgrade the system as a whole. Changes such as ‘Remote surgery’, better patient monitoring and primary care, with emphasis on prevention, will prevail.
Smart technology, combined with innovative entrepreneurs, has started to generate transitional tech such as connected wristbands for patient monitoring & disease prevention.
5G looks to prevent illness by providing doctors with devices and ways to proactively monitor patients with insights in real-time, turning acute care into preventative care.
Patient diagnostics will become faster, more accurate and efficient with portable mobile medical devices.
5G will facilitate the wireless ultrasound of cancer detection devices which are connected to smartphones & tablets.
This incredibly fast and data-driven spatial network can process 1000 times faster than 4G, which will rival traditional forms of medical devices. 5G will upgrade, disrupt and drive innovation forward quicker in the healthcare system like never before.
This industry is preparing for real disruption from 5G. The 5G Automotive Association (5GAA) will be the first transport industry affiliation to be run by 5G technology. Automotive will adopt this new structure and technology quickly, which will be crucial for autonomous vehicles.
Cars will be able to communicate with 5G with other infrastructures on the expansive network and produce better vehicle coordination.
Top players in the automotive business such as Audi, BMW & Volkswagen are looking actively to invest in 5G.
5G will benefit the environment greatly by implementing cellular connective buses across global cities such as Singapore, Helsinki and Paris.
To reduce environmental issues such as congestion and lower emissions caused by old modes of transport and overcrowding, 5G can play a vital role by developing mobility — as — a — service (MaaS). By 2025 the landscape of transportation will have transformed beyond recognition.
And at the centre of this shift, the companies holding the keys to this new world, are the carrier companies (known as telcos).
The telco industry is a tough one. Margins are constantly under pressure and growth can only happen vertical as the technology and services are getting commoditized. Adding to the mix the telco industry is heavily regulated — with government bodies going as far as slashing profitable products like roaming fees in the EU.
However, the industry context should not be used as an excuse for the telcos historic inability to capitalise on trends and do other forms of innovation than just incremental. Telcos are notoriously bad at innovation and they’ve already been disrupted once when they lost the SMS business to the WhatsApp (and similar solutions). They’ve also seen major drops in call usage when people transferred from normal phone calls to FaceTime and Skype and other VoIP services.
At the centre of the problem is the telcos inability to do business model innovation and to commit to growing their portfolio beyond the core. The addiction to past success and the ‘gravitational pull’ of the legacy business model of selling subscriptions is preventing them from spotting major opportunities like 5G.
The transition from 4G to 5G will not be the same as the transition from 2G to 3G or from 3G to 4G. Beyond the clear technological benefits, 5G will allow for new business models.
The new business model are expected to be in one of these three buckets:
- enhanced mobile broadband (eMBB). This one is straightforward and really close the telcos existing core: faster data to handsets. Most likely the telcos will deploythe legacy subscription business model to generate quick revenue from the technology. EE has started putting 5G in high-density areas of six UK cities, with a further ten promised for 2019.
- ultra-reliable and low-latency communications (URLLC). Ultra-reliable and low latency communications (URLLC) opens up business model opportunities where safety and life-critical tasks are part of the value proposition. Here we can talk about service solutions for telesurgery for example.
- and massive machine-type communications (mMTC). As the name suggests this is the IoT that everyone’s been talking about for years. With 5G this will be come everyday reality. It will be just a matter of creativity and customer empathy to come up with services (and products) in this arena.
Telcos are ideally positioned to be the first to capitalize on this new wave as they will own the infrastructure. Owning the infrastructure and being in the spotlight at this major inflection point in the history of technology gives telcos a second chance at proving that the disruption lessons of the past have been internalized.
Will telcos be able to diversify their business model portfolio? Will they capitalize on trends with new business models beyond the sale of subscriptions and access to infrastructure? Will telcos be able to create new business models that capitalize on their favourable position in the value chain? Or will they just be contempt with the current business model for which they will now be charging a ‘new technology’ premium?