Technology has time and again created many disruptive patterns in the economy. For people who identified and saw it coming, were able to benefit from it. If we just go back a decade, things were very different from today. One such disruption was roll out of 4G which helped emergence of various new businesses like Uber, Ola, Food Panda, Flipkart & Airbnb. These new generation companies are wiping out old business models like Meru Cab, Local Taxi Agency, Grocery stores and what not. People and businesses which saw them coming either refused to believe and got out of business, the smarter one realigned themselves with new business models to sustain in new & dynamic marketplace. All powered by speed of internet which is connecting customers & suppliers at lightening speed.
Technology however, keeps moving forward and this time disruption has found a new name called 5G. It is not just a faster version of 4G, in fact faster internet speed is only one aspect of it. The aim of 5G is to galvanize whole device ecosystem in an interconnected mesh of devices called IoT (Internet of Things). This will have very profound impact on the way market place is running. It will become a network of networks. We will surely look back after a decade and might say that things have changed so much from 2018.
Since 5G is a big topic and we want to write a comprehensive post covering major aspects that investors need to know, we will be publishing it as a two part series. Today, we will discuss about the features & layout of a 5G system, pros and cons of this technology and latest updates happening in 5G around the world. As usual, we will keep the language simple to understand so that you can easily understand the concepts. One does not need to be a communication engineer to understand 5G. However, this article is written by a communication engineer turned stock market analyst 🙂
What is 5G?
5G may have a different meaning to different people but the commonly agreed definition of 5G is based on service rather than product itself. 5G is seen as a platform which will enable users to enjoy consistent, seamless service over the wireless and across the devices. This means that consumer will not care how services are delivered, they are simply delivered whenever consumer needs them. They don’t need to look at signal strength of Vodafone or Airtel or nearby Wifi hotspot. All this is taken care by an interconnected mesh of devices which will ensure services & thereby connectivity is delivered via any multiple methods which is reliable. This is way different from 4G concept which has only enabled high speed mobile data internet. Beyond the mobile device, the magic of 4G ceases to exist. This puts a brake on consumer getting seamless connectivity experience. If your mobile is hemstitched off, your 4G experience comes down to zero and takes you back in old voice telephony age. 5G with its current concept is trying to tackle these issues by creating a network of networks whereby if one network fails to serve you, some other network will continue to service you. This may result in restriction of a few services but not all as it has been the case with 4G.
There are three main pillars which will enable success of 5G:
- eMBB (Enhanced Mobile Broadband): This is enhancement of existing mobile broadband to achieve higher data transfer speed up to Gibabytes per second kind of speeds. Such high data speeds will enable critical data transfer in nano seconds thereby enabling faster speed of execution. Think of an automated car driving at a speed of 90miles/hour, it has less than 5 seconds in a visible distance before it hits an obstruction. Such high speed will enable faster execution time leading to more responsive machines thereby automation which is fast enough to catch changing trends and take remedial actions.
- mMTC (Massive Machine Type Communications): In simple words, this is machines talking to each other. In 5G parlance, this reflects to machines communicating with each other for transferring time sensitive data. For example, weather department may put multiple sensors to send weather related data back to the main station where it can be compiled & used. These concepts have existed earlier, 5G aims to bring these concepts to the fore front & not just limit to specialized organizations. This can have a profound impact in emergence or driver-less car, as all cars can communicate with each other at machine level and resolve any accident possibilities. Same applied for road obstructions or turns. There can be devices which feed into the cars to maneuver as per requirements without requiring human intervention.
- URLLC (Ultra Reliable Low Latency Communications): Most advanced feature of 5G. This means a reliable connection of networks which communicates within each-other at very fast speed which ensures very low latency rates. Latency rate is observed between the time you click a hyperlink in you-tube to the time you-tube opens up that video for you. No matter how fast your laptop’s processing speed is, it will take a few milliseconds to a few seconds while your video starts to playback. 5G aims to reduce that gap with very reliable & extremely low latency communication. This will result in machines being able to take decisions in matter of micro seconds. This will come handy in case of remote surgery where a surgeon in US can perform surgery in India using 5G technology.
By using above pillars, 5G ecosystem wants to achieve below objective as laid out during Dec-2014 GSMA paper ‘Understanding 5G: Perspectives on future technological advancements in mobile’.
- 1-10Gbps connections to end points in the field
- 1 millisecond end-to-end round trip delay
- 1000x bandwidth per unit area
- 10-100x number of connected devices per square kilometer
- 99.999% availability
- Perception of 100% coverage
- 90% reduction in network energy usage
- Up to ten year battery life for low-power, machine-type devices
The advantages & disadvantages of 5G:
Advantages: Lets talk about advantages first. With 5G, we can make lot of dumb devices talk to each other like washing machine, hair dryer to dog collar. All these smart devices while talking to the network can have a profound impact on society & economy. Such impacts are large scale in nature. Imagine, all electronics devices around you suddenly becoming smart. There will be lot of new business cases emerging as per usage patterns of these devices. Don’t worry a washing machine will never have a camera. It will continue washing function just that it will be internet enabled. However, it can definitely observe a pattern in usage and report it back to the network. All this data will be stored into big data and thanks to artificial intelligence, new commercial use cases will emerge based on analysis of this data.
Who knows if 4G wonders of today (flipkart or airbnb) will be able to survive the onslaught from new players which will be using such immersive 5G technology to predict consumer behavior.
Disadvantages: By now, you would have guessed that privacy is one big challenge if 5G has to achieve its full potential. There are other challenges as well. With airwaves, the problem is if you increase the frequency from a few mega hertz (MHz) to Giga Hertz (GHz), you can achieve supersonic data speed. These data speeds are much sought after in 5G ecosystem. However, with higher frequency, the coverage areas reduces significantly since higher frequency waves (in GHz) can not penetrate thick concrete walls or other obstructions in the metros. The only solution is to install more antennas to ensure good coverage. Installing more antennas will cost more to connectivity providers. This also can potentially be more hazardous for human health as microwave radiation will increase with more antennas around. The optimal trade off between higher frequency & data speed is around 6GHz. Currently, all 4G system uses 700 to 1800 MHz spectrum as they allow better concrete penetration thereby less towers for telecom companies.
Latest in 5G around the world
So the question is by when we will be experiencing 5G? As a technology, 5G is still into its final stages of definitions. Different bodies like IEEE or GSMA have their own versions of 5G vision which is similar but not the same. It is usual for any emerging technology as it goes through rounds of iterations. The encouraging part is that 5G will start to be rolled out in pilot phases starting late 2018 during Winter Olympics in South Korea. It is expected to present its’s full case during UEFA Euro 2020 and thereafter it should become mainstream technology in developed world starting EMEA. During this event, it will be a good chance to showcase 5G capabilities in media. Organizers are bringing in communication providers & regulators on one platform to enable immersive experience to the fans. There will be virtual & augmented reality games during & after the games to entertain fans. Civic bodies are planning automatic transport system to & for between stadium & the city. Even security agencies are collaborating to use 5G to pin down potential threats during the event.
5G is going to be disruptive because it is activating & connecting many more devices than ever before. The kind of business application and their scope can be increase multifold. We will talk about it in details in our next article dedicated to business.
In developing world, it may take a few more years (may be 2022) before 5G is rolled out. One thing to note here is that no technology can ensure same service levels across the world. While there are definitions of 4G, all of us experience 4G suddenly behaving like 2G in India. So, service quality from providers & regulation from bodies like TRAI are key for 5G to achieve its full potential in developing countries like India.
Even with these limitations, 5G will certainly bring a lot of change in our economy & social life in due course of time. It may get delayed but impact is inevitable to all economies of the world.
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