Like the advent of Generation Z in the workplace, 5G will carry a disruptive ripple effect, starting with telecom and cascading across the wider consumer and business worlds. Switzerland was the first in Europe to roll out 5G in May of 2019 and over 16 cities in the UK will follow by the end of 2019. Beyond this, 5G has already spread throughout Asia. In this series, we’ll look at how this new technology will require telecom companies to reimagine their operations and ways of working to remain competitive. Further, we’ll arm readers with takeaways to thrive in this changing landscape.
The need to react quickly
5G is likely to bring even more disruption to industries than 4G, and at an even faster pace. 4G helped give rise to autonomous vehicles as well as technologies that powered the gig workforce and the proliferation of the “sharing economy.” Utilizing 4G, companies like Uber exploded onto the scene and transformed the competitive landscape. It’s no surprise that 4G is still the biggest tech offering since Facebook in 2012. 5G promises to bring just as much opportunity and disruptive potential, but it’s currently unclear exactly what form this will take.
Telecom companies should take note: 5G needs new ways of working and approaches to organisational strategy that will enable them to capitalise on the increase in Over-The-Top (OTT) service providers (e.g. Netflix and Whatsapp), fixed wireless access (wireless internet) opportunities, and network slicing. 5G enables customers to cross all sections of the product spectrum in one transaction – there are no longer siloed pockets of “data customers,” “mobile customers,” or “broadband customers.” For example, with OTT video and IP based video, will future video product offerings be considered a video product or a data product? Customers will not pay for the higher price of 5G unless they see a reason to do so, so companies must uncover new sources of innovation and value that span the holistic customer journey.
So, what makes 5G so special?
- Speed and low latency. It will be at least several dozen times faster than 4G and will have a nearly instantaneous response time, supporting services such as ultra-high definition video streaming, large file downloads and virtual reality. These features will also enable real-time interactivity of services that use the cloud - this is a must for safely realising high-tech dreams like self-driving cars, connected cities, true cloud based gaming, and remote surgery.
- Better penetration in buildings. 5G brings the ability to integrate across all frameworks – e.g. mobile, fixed broadband, small cell, wi-fi, Bluetooth, edge technologies, etc. This ultimately creates one integrated, more seamless network that can penetrate buildings more effectively.
- Increased battery life. The increased battery efficiency that 5G will deliver (a 90 percent reduction in network energy usage) means that some devices can go for months or even years without being recharged. Low-power and low-cost 5G modules can be installed not only in personal devices, such as mobile phones, but also in everyday objects and city infrastructure, enabling unprecedented connectivity and entirely new services and use cases for mobile data, where other solutions were too expensive or not feasible.
- Network slicing. This capability allows operators to tailor networks based on customer use case, helping to improve the efficiency and effectiveness of how network resources are allocated.
Telecom companies are the first piece in the puzzle to delivering 5G. In fact, according to our proprietary , over half (65 percent) of respondents in the Media, Entertainment, and Communications industry cite 5G Buildout and 5G Commercialization as strategic priorities for 2019.
Although it is currently difficult to build a business case around 5G, given the ambiguity and high cost of implementation, they are in a do-or-die situation and this is where innovation plays a critical role. Indeed, 90 percent of respondents in our survey cited Product and Service Innovation as a priority for this year. In the pursuit of innovation, artificial intelligence (AI) is critical to handling the speed and transaction volumes that 5G will bring.
There is no doubt that 5G carries tremendous disruptive potential, and in part two of our series, we’ll dive into the actionable steps that telecom leaders can take to thrive in a 5G world.