5G: Innovation, disruption and opportunity ahead

The next and most radical generation of mobile communications – fifth generation (5G) – is several years away. A clear picture of how it will work, and who the prime movers will be, has yet to emerge. But it will come, and when it does, it will radically change the technologies and business models of the mobile telecommunications industry. More than that, 5G is widely expected to be a defining stage in the global evolution of IT in general, affecting almost all parts of industry and society.

Because of its importance (and likely far-reaching consequences), 5G is a sector that 451 Research has been examining as part of a 451 Foresight project. This research initiative is intended to help IT-industry stakeholders identify and consider opportunities and threats presented by new technologies and industry developments at an early stage. The project is concerned not only with the direct impact of a technology in its main 'home' sector, it also focuses on the indirect impact of technologies across different sectors, sometimes in combination with other developments.

This report highlights some of the key findings from a forthcoming 451 Foresight Report, The Coming Revolution: 5G and its Impact on IT. Our full report explores the potential technological and business effects of 5G mobile-networking technology on the IT industry over the next decade. We address associated webinars and workshops, and aim to be useful to technology business managers and investors working within and outside the mobile sector.

The 451 Take

Our research suggests that 5G will potentially have an energizing and catalytic effect on a whole array of technology and services in IT. But as one might expect from a major project, the overall picture is nuanced and confused. The move to 5G will be multispeed –some quarters will perceive threats, some opportunities, and some a mix of both. Perhaps the biggest single lesson is that any supplier that is touched by the mobile Internet, the Internet of Things (IoT), cloud services and consumer electronics or automation needs to track and assess the coming impact of 5G. Few will be left unaffected.
5G recap

The 5G mobile-network initiative is an international, industry-wide project to define the next generation of mobile networks, supported by telecom operators, equipment providers and governments. Its backers intend to be a radical step change forward – not only in the field of mobile-networking technology, but also for consumer and business IT more generally.

The 5G project is ambitious. Initial requirements (in various industry papers) suggest it will require the development and deployment at scale of multiple new technologies, as well as significant financial investments by operators and stakeholders. Industry consensus points to 5G as more than a generational change in mobile radios: it is envisioned as a fundamental change across the network architecture, largely due to virtualization technologies.

The widely supported goals of 5G

  • Increased data volume: 1,000x increase over current levels. This means it will be possible for many people and devices, sending large files, to transact across a wireless connection without performance impact.
  • Low latency: 5x reduction in transit time. The low-latency requirement of as little as 1ms (in certain cases) end-to-end round trip is intended to enable real-time control applications to run across the 5G network. Some have identified a round trip of 5ms as a goal.
  • Faster data-transfer speed: 10-100x higher speeds. Improvements in bandwidth have characterized every new generation of wireless networks. The goal of 5G is to support 1-10Gbps connections to endpoints in the field.
  • More devices: 10-100x devices. 5G intends to increase the number supported in a given area by a factor of between 10x and 100x (thereby enabling IoT) ‚Äì sometimes stated as one million devices per square kilometer ‚Äì with devices able to travel at up to 500km per hour.
  • Energy efficiency: The 5G initiative aims to extend device battery life by a factor of 10, and reduce core network consumption by 90%.
  • High availability: The aspirational goal of 5G is to create the perception of five-nines availability, achieved through distributed loads and redundancy.
  • 100% coverage: The ability to provide good coverage in all areas is another aspirational goal of 5G ‚Äì the extent and achievability of this is highly debatable.
  • Rapid service deployment: One goal is to rapidly reduce the time it takes to deploy 5G network connections, using self-organizing network technology.

Confusion, opportunity and threat

There is no doubting the serious intention – as well as global momentum and likely investment – behind the 5G project. Below, we discuss selected findings from our Foresight report.

5G is not just another G – it will trigger a wave of innovation. It is intended to support converged communications and computing across public networks. Communication capabilities and computing power will combine and extend across networks and devices, and information and computing power will be instantaneously available. This will encourage a wave of innovation in applications, services and functions built to run on the new infrastructure.

5G innovations will spread far and wide. Key areas where innovation will be needed are mobile technology (radio, low-latency, high-density transmission; core networks and management software; mobile devices), real-time analytics, edge-of-network datacenters, and new (still to be determined) applications and services such as semi-autonomous vehicles, augmented reality IoT.

5G implementation will be very patchy. Those behind a more visionary approach will be less risk-averse, and will seek to leapfrog others in securing advantage. Those with a more conservative view will aim to get more from 4G/LTE existing investments. The speed and extent of 5G deployment will also depend on local demand for 5G capabilities not possible on 3G/4G: government intervention; the business models of parties required to invest; the effectiveness of new technologies at scale; and the clarity of the business cases, which may involve multiple players collaborating to provide services. All these factors will vary widely.

Uncertainty still surrounds several key technologies required for 5G. Not all the technologies required for 5G are yet proven, especially at commercial scale. Nor is it clear that target capabilities such as sub-one-millisecond responses will be supported by business cases and justify the investments required. Areas requiring particular investment are low-latency services, low-power devices and networks, and the ability to support huge numbers of devices. There also needs to be a harmonized approach to spectrum release to support these capabilities.

5G will not mean universal coverage for many years. The technology does not promise that everyone, everywhere, on the planet – or even in all developed countries – will be connected with high-bandwidth services. There is no requirement (yet) in 5G for minimal coverage levels, and investment in increasing coverage will continue to depend on business cases. This will limit deployment of some services/applications, and will create opportunity and market fragmentation in some areas.

IT players need to think IoT now, and 5G soon. Whether it is real-time analytics, datacenter design, location-based Web services, or social networks and digital currencies – 5G will affect demand patterns, possibly from as early as 2018 in some geographies. IT companies need to understand what is coming with 5G and develop clearer strategies. Those developing IoT technologies using other wireless platforms will need to consider 5G and related issues of licensing, billing, security, spectrum/radio allocation and energy efficiency.

Governments and operators have differing ambitions for 5G. Many governments want to get ahead in 5G and digital living, while national and leading operators may be more concerned with shareholder returns. This could create conflict, especially in geographies such as Europe, where government expectations are high. In some cases, this could lead to the creation of private-public partnerships to raise finance, and achieve government infrastructure targets.

Then there is the X Factor. Competition to 5G could yet wreck the economics: it is currently supported by almost everyone, and at this point, there are no credible alternative approaches that span wide areas. This is partly because it is designed at a high level, where the scope for disagreement is less. But alternative technologies, such as LoRA or Weightless-N, could emerge as viable options for low-bandwidth edge-computing requirements for IoT – thereby taking a major driver off the table for 5G. In addition, new suppliers and standards may yet emerge, especially using unregulated spectrum in high-density areas.