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Angus Ward, CEO, BearingPoint/Beyond investigates the arrival of 5G and its impact on IoT
The ‘real’ beginning of the 5G era is now upon us, a much-hyped technology that promises to deliver the higher bandwidth and ultra-reliable, low-latency communications needed for the next generation of Internet of Things (IoT).
At the start of 2020, 33 Communications Service Providers (CSPs) across 18 countries had launched commercial 5G services with another 77 operators set to follow suit in the year. While the global pandemic we are experiencing has slowed down some of this year’s implementations, it is only boosting 5G development and has led many enterprises to hit the ‘fast-forward’ button on IoT/5G technology solutions. Indeed, 5G investments are recovering because enterprises recognise the importance of both public and private networks to accelerate the digitalisation and automation of their businesses, allowing them to continue to operate during the pandemic. We expect this trend to unfold globally as Covid-19 makes digitalising physical assets, automating through industry 4.0 and securing supply chains more relevant than ever.
However, to capitalise on this opportunity, CSPs need to change how they work with enterprises and small medium businesses and how they are selling 5G and IoT propositions. Enterprises want solutions that would drive their digital transformation faster and address the business problems they are looking to solve. These solutions must be simple to buy, fast to implement and easy to consume. Indeed, our recent research showed that 75% of enterprises believed 5G is highly relevant, but 62% would only purchase 5G as part of a pre-integrated solution that better fits their business needs.
4G/LTE, the most popular and most-used network today, notably gave us the high-speed connections we needed to be able to stream high-definition video on our smartphones. 5G brings much more than that. Firstly, 5G provides faster transmissions. 5G data transfer speeds are projected to be ten times higher than what is possible with 4G, which means we can access files, programs and remote applications in seconds.
Secondly, 5G reduces latency ten-fold, allowing a greater capacity of remote execution. Although it’s not always noticeable, there is often a brief lag in time from when data is sent to when it’s received. Thanks to 5G’s ultra-low latency communications and the increase in the number of sensors, machinery or logistics of an industrial plant, for example, can be managed remotely in real-time.
Given the technology’s ability to handle bigger data volumes and the increased network capacity it provides, more people and therefore more devices will be able to connect to the network, have access to instant connections to the Internet and communicate in real-time.
Finally, 5G makes creating subnetworks possible, providing connectivity that is more tailored to specific needs such as prioritising the connections of some users. Considering all this, it’s no wonder 5G has been described as the mobile standard for all connected ‘Things’.
A broad range of industries and sectors are set to benefit from the emergence of 5G and IoT as a means to digitally transform both their operations and business models – healthcare and manufacturing in particular. Indeed, our latest research in partnership with Omdia, predicts that manufacturing should benefit more than any other vertical from 5G. Globally, manufacturers stand to gain $4.6tn from 5G adoption over the term of Omdia’s forecast, in 2035, which is 5.4% of total sector output.
5G clearly a key role to play, however for transformation to succeed, connectivity alone is not enough. It needs to be integrated with other technologies such as IoT,Edge or AI and requires collaboration between different technology and vertical players. In fact, 95% of businesses believe that building partner ecosystem to deliver solutions that better fit their needs is more important than 5G technology.
Building effective IoT solutions is a team sport and enterprises know that. They don’t expect CSPs to have all of the answers. But they do expect industry players to collaborate to provide solutions to their business challenges.
This clearly shows that by creating a partner ecosystem that comprises CSPs, vendors, solution providers, and channel partners – all bringing complimentary capabilities to the table – CSPs will be able to penetrate new value chains while enterprises will be able to realize the possibilities of 5G and unlock IoT’s potential.
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