5G Global Outlook

5G Global Outlook

5G has often been pitched as a race among countries to attain technological superiority and global dominance. Even though, this view may not necessarily be true, indications point to a competitive atmosphere across the globe, in the deployment of 5G technology, which arguably show that some sort of race is definitely on. As we approach 2019, we should begin to witness several launches, releases, validation and tests and anticipate spectrum debates leading up to World Radio Congress (WRC) 2019. In different parts of the world, operators are starting to launch 5G with specific use cases relevant to their domestic market.  In this piece, I summarize the early attractive use cases for 5G within different parts of the world and conclude with some recommendations for the continent of Africa.

In the US, it is anticipated that 5G will be used to deliver Gigabits of data throughput and serve as a last mile technology for fixed broadband connectivity. 5G based fixed wireless would therefore serve as an alternative to fixed broadband connectivity due to its advantages such as lower cost and higher speed. Verizon plans to launch its 5G Home Service in four cities within the US on the 1st October 2018. As part of offers to attract consumers, Verizon has also stated that its 5G Home subscribers will be able to purchase 5G mobile devices as soon as they become available.

The US has the highest number of tech-savvy mobile consumers and would therefore see an early adoption of 5G in consumer applications like immersive television, AR/VR devices for gaming, entertainment services with advanced video capabilities, sports coverage broadcasting offering 360-degree view etc. This shows that the US Market is definitely going hard for the consumers. As the markets mature and cross industry alliances are formed, we should see 5G being used in the US for enterprise applications like connected cars, smart cities etc.

5G in automotive

China, unlike the US, seems much focused on the enterprise market for 5G, from the start. China is home to some of the largest car manufacturers in the world and is therefore taking a leading role in converging the automotive sector with the ICT industry with diverse applications in connected cars, autonomous vehicles etc. This has also been supported by the policies of the Chinese Government, with its ‘Made in China 2025’ ambitious plan to make China a leader within this space. China, also boasts as home to some of the world’s biggest factories and is looking to deploy 5G in smart manufacturing applications for the realization of Industry 4.0 as well as provide an increased connectivity for UAVs etc.

In comparison with the US and China, Europe definitely seems to be lagging behind in terms of adoption and deployment. Focus on 4G, market fragmentation, business models for 5G, lack of commitment, complicated regulation etc. among the 28 countries are some of the factors hindering the adoption of 5G in Europe. One good thing here is that Europe can learn from the mistakes of the other countries leading the 5G race.

Surprisingly, it has also been reported that the Middle East and North Africa (MENA) region will be an early adopter of 5G due to the growing demand for broadband, rising subscriber usage and smartphone usage, Government support etc. In fact, Etisalat has indicated that it will launch a 5G network in the UAE in 2020. Anticipated use cases for 5G include AR/VR services, immersive television, remote monitoring of oil wells, smart agriculture initiatives etc.

Africa is definitely watching the 5G race cautiously as most operators are currently deploying their 4G networks. Subscribers still rely on the 2G network, hence it seems out of place to mention 5G in Africa. Smart phone adoption within the continent is around 35% and affordability seems one of the biggest barriers hindering the adoption of 3G and 4G. The widespread adoption of smart phones like Tecno within the continent is already helping to reduce some of these barriers. However, these barriers can further be lowered by increasing the manufacturing of smart phones locally and accelerating the release of new spectrum. The current rise of Mobile Virtual Network Operators (MVNO) within the continent should also trigger a reduction in telecom services. As reported this week, South African banks are now becoming MVNOs, in their own right. This would no doubt act as a game changer for the continent, especially regarding the deployment and investment for 5G.

Timeline towards 5G [Source: Analysys Mason, 2014]
Even though 5G requires huge investment, it is important to note that there is potential for revenue generation from verticals like smart agriculture and health care applications (as demonstrated by Prof. Ndubuisi Ekekwe who is leading a digital revolution in the agricultural space and deploying AI in health care via Medcera) and this would no doubt help telcos justify their investment. The first trial of 5G within the continent was however announced by Ericsson and MTN in South Africa.

One thing that is common here – Countries that have been favored as early adopters all seem to enjoy support from their Government, even though 5G seems to be disrupting the telecom industry. The favorable policies no doubt translate into an enabling environment for operators and investors looking to deploy 5G.

Furthermore, this piece shows that early 5G use cases vary across the different regions of the globe from fixed wireless in the US, enterprise applications in China to remote monitoring of oil wells in MENA. For those within developing countries who question whether 5G would be of any use, I think the key lies in finding local applications within the verticals which present the greatest market opportunities in Africa. For instance, infrastructural deficit may hinder the deployment of 5G for smart cities application but there is a growing market for 5G in smart agriculture, health care initiatives, fintech etc. in Africa.

Besides, it’s anticipated that 4G would most likely act as a pillar for 5G. And 4G and 5G networks will likely co-exist before a transition to standalone 5G network occurs. Hence, it is crucial that telcos continue to invest in both fibre infrastructure and their 4G networks for a successful 5G deployment. This shows that telcos who are currently deploying and enhancing their 4G network in Africa are definitely on the right path.

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