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.