IBD: 5G Network Rollout Spending, Silicon, Entrepreneurship, Use Cases and Applications

Spending On 5G Network Rollout

Morgan Stanley estimates that about $225 billion will be spent on 5G network deployment from this year to 2025. The first 5G-enabled smartphones are just beginning to arrive, though access to 5G networks will be limited. Real-world tests of the technology are underway only in a few dozen U.S. cities and other locations worldwide.

Analysts disagree on where the first impact will be felt. Some say in commercial and industrial applications. Others see 5G technology initially gaining momentum on the consumer side, particularly in gaming. Industrial applications will come later, according to some analysts, as the competency of the technology proves itself. But long term, business applications are where 5G appears likely to have the greatest impact.

“It’s an exciting tech but a lot of hurry-up-and-wait, a lot of hype,” said Jason Leigh, IDC research analyst covering mobility. “Because of that, it’s hard to say which specific industries will really benefit most, but I think the biggest impact will be on the business side overall.”

In addition to network infrastructure providers such as EricssonHuawei, and Nokia, other beneficiaries of 5G network deployment include vendors exposed to the metro foundations and core cloud infrastructure. Cisco SystemsCiena, and Juniper Networks fall into this category, wrote analyst Simon Leopold at Raymond James in a research report on 5G.

More Chips Needed

The deployment of 5G infrastructure also requires lots of semiconductor content, mainly due to higher radio content tied to antenna counts. Analog DevicesMarvell Technology, and Xilinx have large 5G infrastructure content, and each has already experienced early benefits as 5G trials progress, Leopold said.

Chipmakers Intel and Qualcomm, meanwhile, are involved in 5G trials. The rollout also requires network densification, which involves replacing cell towers with smaller, more tightly spaced transmit/receivers and benefits apparatus suppliers such as CommScope.

A report from the Global Mobile Suppliers Association said there are about 201 operators globally that have initiated 5G efforts, as of January. That’s up from 154 the previous year. A 2018 survey by Ericsson found that nearly 20% of 900 companies interviewed aimed to do 5G-related proof-of-concept trials in that year. An additional 38% planned to run trials in 2019.

In 2016, Ericsson found that 59% of respondents thought 5G wouldn’t be on their radar for at least five years. By 2018, that number had fallen to just 11%.

Sparking A New Era Of Entrepreneurship

Altogether, that means the 5G network upgrade will eventually affect almost every aspect of business. This includes manufacturing, health care and emergency services, education, transportation , smart cities and smart homes.

It’s also expected to expand and improve the capabilities of drones and other aerial systems and enhance autonomous vehicles. 5G will also fast-forward the application of virtual reality and augmented reality in industrial applications.

“5G will spark an unprecedented new era of entrepreneurship and business opportunities as new technologies are created, tested and rolled out in cities across the country,” wrote Craig Silliman, Verizon’s executive vice president for public policy, in a December article.  He also said the 5G network will act as the backbone of the Fourth Industrial Revolution. And he asserted that robotics, 3D printing, artificial intelligence, virtual reality and drones will change almost every facet of society.

5G Use Cases and Applications

Morgan Stanley analyst Simon Flannery identified seven uses that could drive $156 billion of incremental annual revenue by 2030.

These are: $64 billion for manufacturing automation; $9 billion for cloud gaming; $18 billion for fixed wireless; $7 billion for autonomous vehicles; and $20 billion for surveillance and smart cities. He also estimates $4 billion for drones and $32 billion for remote health care services.

“The business opportunities for 5G are just exponentially bigger than previous-generation networks,” wrote Flannery, who covers North American telecom services. “And while the immediate opportunities may be limited, we believe revenue opportunities will emerge as technologies such as cloud-based gaming, autonomous vehicles, and remote surgery become mainstream.”

The first generation of mobile networks that debuted in the 1980s had the capacity to carry voice calls only. Then, 2G in the mid-1990s brought text messaging, basic data packages and partial internet services. As the new millennium began 3G ushered in the mobile internet, mobile computing, and the proliferation of apps. 4G (also called LTE) provided mobile broadband that allowed streaming video and audio and also enabled an explosion of social media apps and ride hailing services. Improvements to 4G technology continue, with rollouts in far-flung places still underway.

The power of 5G technology goes beyond current 4G wireless in several ways. For example, the time it will take for a wireless data signal to get a network response, known as latency, will shrink to about 1 millisecond, compared with 25 milliseconds with most 4G technology. It boasts bandwidth and data transmission rates more than 10 times faster than 4G LTE.

The number of devices that can connect to a 5G network, compared with existing 4G wireless towers, will also greatly expand. That’s particularly important to the rapidly expanding market for the Internet of Things. IoT is the global network of interconnected electronic devices embedded in everyday objects that share data. These will include smart homes, smart factories, smart power grids and other “systems of systems” networked configurations. There are currently more than 11 billion IoT connections worldwide; that’s expected to grow to more than 20 billion by 2020.

Among the earliest adopters could be gaming and the eSports venues, where services are already monetized and high speeds and ubiquitous connectivity are paramount.

In March, the Google unit of Alphabet announced Stadia. It’s a cloud-based gaming platform and a major move into the video game business.

Stadia is not an external console or set-top box. It is a cloud-based platform, accessible over the internet via a variety of formats.

Google‘s cloud servers will allow Stadia to stream games in 4K ultra-high definition and in 8K in the future. 5G is expected to play a crucial role in making it all work.

Microsoft is also creating its own cloud gaming service, dubbed xCloud.

“Games tend to be the tip of the spear for this kind of technology,” said Bill Morelli, chief of research for enterprise solutions at IHS Markit Technology. “While consumer segments will do better in the near term, business applications will emerge as 5G is more fully implemented and its capabilities are proven.”

Morelli doesn’t see major business applications using 5G emerging until about 2021 or 2022. While businesses are increasingly using digital technology in industrial fields, its been a slow process. Equipment replacement cycles are very long, and industry executives tend to be conservative when it comes to a major transformation.

Currently, the use of wired technology configurations far outweigh the use of wireless in industrial fields. Moreover, the bulk of wireless technology is not standard cellular wireless. It’s not considered fully reliable.

“Historically, cellular has not been a technology that was optimized for that sort of environment,” said Morelli. “But 5G is designed to close that gap, to do things with wireless you’re just not able to do today.”

One of the most anticipated uses is machine-to-machine communications, enhanced by IoT. It refers to direct communication between devices using any communications channel, including wired and wireless. IoT enables sensors or meters to communicate the data it receives so that they can be analyzed and acted upon.

Because 5G supports far more connections, it will provide the ability to connect embedded sensors in virtually everything, significantly accelerating enterprise adoption of IoT products and services.

In the development of smart cities, IoT and 5G will more closely monitor traffic flow and help reduce accidents. The addition of more sensors could also improve the distribution of utilities, monitor agriculture and improve infrastructure safety. This also includes crop monitors gauging water levels in agricultural environments and power-management systems in residential properties.

Many see IoT significantly increasing demand for microcontrollers, sensors, Wi-Fi and cellular chips, flash memory and high-performance processing units.

Among other technologies that will benefit from 5G expansion are drones and other autonomous aerial vehiclesUPS and FedEx are among the companies experimenting with autonomous vehicles and drone delivery.

The impact of 5G wireless will also be big in the health care market. It will accelerate the development and use of wearable devices for physical health monitoring and advance the medical equipment market in the development of surgical assistants and devices for remote surgery.

“There’s a lot to be excited about,” said IDC’s Leigh. “5G wireless will transform technology, but transferring that into dollars is another story.”

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3 thoughts on “IBD: 5G Network Rollout Spending, Silicon, Entrepreneurship, Use Cases and Applications

  1. 5G To Get Big Push For Live Sports

    Consumers are likely to first experience the new 5G speeds at sports events at large arenas.

    Network operators are targeting sports arenas for 5G rollouts and the arenas are planning to use the new speeds for better fan experiences.

    The majority (87%) of network operators intend to deliver new 5G services to major live sports and esports event organizers, according to a new study. More than half (52%) of operators plan to offer services to improve the fan experience in the arena, such as the ability to order food and beverages via mobile devices.

    The study comprised a survey of senior decision-makers at 60 of the world’s largest communications and media companies conducted by Ovum for Amdocs.

    By the end of 2020, most (91%) operators expect to have trialed 5G inside their venues and 93% pan to directly support mainstream sports in the 5G era. The majority (70%) of network operators say sports events have influenced their 5G rollouts.

    New consumer-facing services expected to be offered to support live sports events include multiscreen pay TV (83%), virtual reality (63%), augmented/mixed reality (63%) and digital advertising (53%).

    However, operators also see some challenges ahead, including lack of consumer interest in 5G use cases (23%), the willingness of 5G companies to collaborate (18%) and lack of appealing 5G devices (15%).

    To drive 5G adoption, operators plan to subsidize some devices, including personal hotspot devices (53%), smartphones (43%), tablets (33%), smart VTV devices (28%) and AR headsets (25%). The new 5G speeds are just around the corner, and the industry deploying those speeds plans to provide a market push.

    AJW Comment:
    But where will the 5G endpoint devices come from? Will they be smartphones, tablets or portable TVs?

  2. Percepto uses SK Telecom’s 5G network to fly autonomous drones

    Autonomous drones have successfully been flown by Percepto over SK Telecom’s 5G trial network.

    SK Telecom is the largest mobile operator in Korea and commercialised its 5G network in December 2018.

    Dain SNT, Percepto’s representative in Korea, has been collaborating with SK Telecom to apply Percepto’s solutions to SK Telecom’s commercial 5G network.

    Percepto is a drone-in-a-box (DIB) solution that provides a range of communications schemes to its global customers. It also offers autonomous flights over cellular networks. This milestone prepares Percepto to provide its customers with significant operational advantages including better real-time video stream quality; reduced battery consumption, which means longer mission times; and greater distances and readiness for greater data processing in real time.

    Earlier this year Percepto was recognised by Frost & Sullivan for its onboard computing processing capabilities, allowing Percepto to conduct real-time analytics. Supported by 5G networks, Percepto users are more likely to gain faster and more accurate aerial insights.

    “We are proud to have been selected by SK Telecom to demonstrate the potential of both 5G and autonomous drones,” said Percepto Chief Executive Officer Dor Abuahsira.


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