What 5G means to different players in the ecosystem.

5G is capturing the mind space in the technology and business events, news and the net through social forums and posts. Commercial networks have been launched in some places. These early launches are primarily focused on eMBB and FWA. 5G networks in true commercial sense bringing in all that 5G is expected to bring about will take some time considering the myriad cogwheels to fall in place.  As 5G takes to the wings, how do different actors in the game look at it? What are the different perspectives that comes to the fore ? In this post, we look at some key players. 

1.Governments:

There are three major areas where the national governments look at the world of 5G.

a. Increase the exchequer with as much money as possible by auctioning 5G bands. Flog the 5G spectrum as much as possible and make up for the deficit in revenues from other areas.

We have seen in the recent auctions in Germany, 420 MHz spectrum in the 2 GHz and 3.6 GHz bands was allotted for  $7.3 billion.

In Italy, the 5G spectrum in the  3.4 -3.6 GHz, 26 GHz and 700 MHz bands for a total of 1260 MHz increased the government coffers by as much as $7.6 billion.

In India, the auctions are yet to take place but the base price is set at $ 70 M per MHz with service providers expected to shell out $ 7 B for 100 MHz countrywide spectrum in the 3.4-2.6 GHz band.

While revenue is a prime consideration, there is increased awareness that 5G can deliver to the society and the economy

b. Means of extending broadband to more areas and the population.

c.  Being one of the pillars for Industry 4.0 by being one in the quad of 5G, AI, IoT and, block chain.

As governments realize the potential of 5G to make impact on the society and economy, the temptation to rake in as much as possible is something hard to resist. Of course countries like South Korea have kept 5G spectrum prices low and so has Australia. (Australia: $ 5 Million per MHZ, South Korea: 18 Million per MHz)..

d. Political and economic warfare- The stakes are high in the fight for dominance and hegemony in the emerging high technology space be it AI or 5G. When these fights gets enmeshed with security issues - real and perceived, the brew can become quite heady. So brace on for more action in this front.

2. Multilateral agencies-UN, ITU, World Economic Forum

The sustainable development goals for 2030 agenda was adopted by the United Nations in 2015. It is expected that ICT can play a major role in meeting each of the UN Sustainable Development Goals (SDGs) like -Zero Hunger, No Poverty ,Quality Education extending to all of the 17 goals.  5G is set to play an important role in achieving the SDGs to address critical areas related to humanity and the earth as we know it.

4. Service providers - The search is on for the holy grail for future sustenance. Will 5G help in bringing new users and more usage? Will IoT do the same? Can IoT using 5G as the access layer deliver?  Voice has reached saturation levels in many regions. With the increased usage of messaging and voice applications, the future as they say is in data. And data carries voice as one of its myriad applications. 5G gives the needed platform to transform into a more integrated service provider to serve the different needs and types of users. Some providers have already started services and others are in the pipeline, waiting for the opportune time. There are essentially two types of service providers- -ones that will take the lead in deploying 5G and drive the ecosystem and use cases while there will be others who will wait to see how the 5G business case develops and wait for ecosystem (like devices )  to be in place to take the plunge. For the early adopters,  the race is on to being the first in the continent, the first in the region and the first state in the country!

5. OEMS – In the current business space, the fate of the many of the OEMs is intrinsically linked with that of the Service Providers. For the manufacturers of technology infrastructure, 5G would mean the race to bring to the market, products and solutions meeting the 3GPP specifications and the needs of the users. The potential of 5G needs to be translated to the needs on the ground. As the early commercial launches take place in some countries, for other geographies it is the time for Trials and Pre-commercial Proof of concepts to showcase the abilities of this new technology. There is wholesome anticipation in the success of 5G. 

6. Regulator- Besides the obvious task of spectrum allocations, amount of spectrum, spectrum bands and in some cases determining auction base prices this important stakeholder will have its hands full. The regulator has to ensure the orderly behavior of the market and keep the end user interests in consideration. That is the job as we understand it. 5G as a technology is simply not an enhancement to 4G but is much more. The user is not only a human with a subscription who likes to keeps his data usage in check and have voice calls without dropping. Now we will have IoT devices riding over 5G. Enterprise users and Smart city infrastructures will use 5G as an access layer. Throw in ML, AI, cloud computing  and applications like connected cars and connected industries, the regulator has to work out news ways of ensuring quality of service to the varied users. It has to figure out the rules to penalize providers in case of violations. The search will be on for new metrics to capture the technical and other business information. What to regulate, How much to control and how much to leave to the market forces is a job cut out for the regulator!

5G- The Technological Advancement and the Economy

5G is expected to bring transformational changes in the economy. The reach of 5G will touch multiple areas of the economy – industries, medical, education, entertainment and many others. The potential extends beyond the obvious ones as the gains achieved will spur improvements in areas we even don’t know at this point. Will these gains happen the moment 5G is launched? Nobody is naïve to think so and even the most ardent of believers know it will take its own pace and time. A lot of number crunching has been done to study the impact in monetary terms. If you happen to pick up any consultancy report, you can see the numbers popping out in terms of millions and billions of dollars. These numbers vary with the assumptions they take and timelines they consider but one thing comes out clearly- the economic benefits will creep in or roll on depending on whom you ask. But are there gains only?

Technological advancements help to do things more efficiently.  The work that we do become easier to accomplish and this, in turn helps more to be done with the same inputs. However, the advancements translate over a period.  The learnings and gains that come in from the early deployments help to spread the message and hence results in more diffusion of the technology. Any new technology needs time to be fully exploited. We don’t need to look further than the Internet -the ARPANET in the 1960s, to the development of TCP/IP in the 70s, to the WWW in the ‘90s.  In the second decade of the 21^st century, the internet is now all-encompassing. In the present age, the economic implications of a breakdown of the internet can be far-reaching.

For 5G as a technology to render the anticipated benefits, we can study it by dividing the future implications into the short term and the medium to long term. As the 5G ecosystem develops, certain segments of the ecosystem have to bear the initial weight so that the future brings in the expected benefits. Let us see how the near term unfolds.

For one, the OEMs have to invest in R&D and come up with the needed equipment to power on 5G- the hardware and the software. The New radio (NR) in various frequency bands, the evolved core with 5G EPC and 5GC riding on the cloud-native base. Standards are ongoing for 5G and with 3GPP and ITU expected to finalize the standards and specifications by late 2019 or early 2020. The OEMs have to invest resources in many fields to bring the commercial systems on the ground. Many of them are already taking off and as the specifications are frozen to meet the intended objectives, a lot of money needs to be pumped in- to develop, test and market. But it does not stop with the OEMs.

The service providers have to test and deploy the new infrastructure. And they need to ensure that the new 5G systems -the radio and the core integrate with the existing ones with as less pain as possible. Moreover, the current business systems tuned for 3G and 4G will need to transform. Imagine a scenario when users carrying out a critical transaction based on 5G technology encounter some network issue. The user will make a   call to the Customer Care to ask for a resolution of the problem.  The caller may land in a situation -Dial 1 for Postpaid, 2 for prepaid … . By the time she lands on to a human operator, the time-dependent need may all be over. With Critical IOT, mission sensitive applications riding on 5G, the existing customer care will need to be shaped up to ensure that the response to the customer is ultra-fast as fast as the ultra-latency that 5G technology promises. This upgrade of business process systems through AI and automation will call for investment in systems and for enhancing the knowledge and skills of the workforce.  Customer care is given as an illustration but that is only one aspect. Other business operation systems will also need to be upgraded to cater to the new scenario.

The short-term challenges extend to other players in the ecosystem. For instance, the regulator and the policymakers. Do they offer the 5G spectrum at reduced prices to boost the 5G investments and hence the market or do they keep the price high in the hope that high revenues will flow to the government coffers at the very start? The economic impact extends even further. Let us think about the dealers and retailers who earn a livelihood by selling new connections. Voice connections are reaching stable levels in many places. 5G is designed to bring in enterprises, factories and other institutions on the bandwagon. Surely an enterprise won’t go to a retailer sitting in a small outlet for a connection. The needs of the enterprise will need to be understood by the seller of the services. For instance, a nationwide enterprise may ask for low latency connections across multiple cities for their AR/VR requirements. The retailer now has to think of new ways to morph to sustain his livelihood. Probably it will open new vistas for him like what we saw when an unemployed driver giving his services occasionally got transformed into an Uber driver.

The ecosystem of 5G will be much wider in length than the current Gs- 3G and 4G. It will stretch across verticals and sectors clubbed with other technology inroads- AI and Industry 4.0. The increase of throughput and connections is taken as granted. As 5G makes its way out of the labs to ground trials and POCs and to actual commercial deployments, we will hear new use cases and new areas where it will impact the society and the economy. The industry has come a long way since the last decades of the century gone by. There is a bright light around the corner that holds immense promise. We need to trudge a little bit along the way to the new paradigm.