Blue-futeristic-globe-What-is-5g-for?

Blog

What is 5G for?

Telecom Insights 2020 shed new light on how the Netherlands can benefit from 5G

Will the need for recovery and renewal, in the wake of the pandemic, open doors for 5G? With many policymakers and lobbyists calling for a shift to a cleaner, greener economy, the new cellular technology could take on a pivotal role in the next phase of Europe’s development.

As it can be used to track and monitor large numbers of assets, 5G could significantly reduce waste by supporting predictive maintenance and greater sharing and reuse of resources. That was one of several 5G opportunities identified by participants in Telecom Insights 2020, organized by Telecompaper in the Netherlands in late November.

Although 5G has yet to capture most Europeans’ imagination, some speakers at the event were bullish on the technology’s potential to bring new value to consumers, as well as companies. But experts also flagged the need to contain deployment costs and limit the number of new base stations by enabling operators to share 5G radio infrastructure.

Driving the circular economy

In a joint presentation, Ingrid Laane and Julia Krauwer of ABN Amro outlined how 5G could drive sustainable growth within the Netherlands, both by improving productivity and enabling the circular economy – the idea that assets and resources should be reused wherever possible, rather than being discarded. As 5G networks can support very large numbers of connections simultaneously, they could provide both consumers and companies with a much better view of the condition of their assets and how they are being used.  The resulting data and insights could make transport systems more efficient, boost agricultural output and increase automation in industry, Laane and Krauwer pointed out.  

The end result may be a cleaner and leaner economy. "Sustainability and ‘smartization’ of the public space will become a spearhead," Heimen Visser of Primevest Capital Partners, told the event.  Primevest is working with the Bank Nederlandse Gemeenten to help municipalities in the Netherlands make cities’ public spaces more sustainable by offering public and private applications like 5G and EV charging in line with the ‘Omgevingswet’.

Keep me updated

Be the first to receive updates on this topic

Sign up now

Time for an acceleration?

Although 5G networks are now live in the Netherlands, the 3.5Ghz spectrum won't be aucitioned untill 2022, meaning lags many of its European counterparts in deploying the "real 5G". That allows operators to learn from what is happening elswhere, but the consensus at Telecom Insights event was that the Netherlands now needs to embrace 5G more wholeheartedly. Most attendees favored an acceleration in the rollout of 5G in higher-frequencies, in particular, where there is more capacity than in lower frequency spectrum bands

Although the 4G networks in the Netherlands are among the best performing in the world and hardly suffer from congestion, growing demand for high definition multimedia content is fueling explosive growth in data traffic. Therefore, investment in 5G networks will be required in the near future. Moreover, 5G networks are up to 90% more energy efficient per traffic unit than legacy 4G networks1, thereby promising to cut telcos’ costs and environmental impact.  

However, as radio signals in higher frequency bands don’t travel as far as they do in lower frequency bands, high capacity 5G networks will need to encompass a large number of base stations. If several operators were to each go to the expense of deploying their own high frequency 5G networks, that could damage the business case for 5G, while also raising alarm bells among citizens concerned about the aesthetics and health implications of large numbers of base stations.

One network, rather than three?

Jan-Piet Nelissen, a Partner at Deloitte, made the case for the development of a single 5G network, which can be used by all competing operators. He suggested they share the radio access infrastructure (antennas and base stations) but build their own 5G core networks to allow for differentiation. The proposal received a positive response from many attendees  - one telco executive echoed this view, noting that operators should compete in the services layer. With the subject now up for further discussions among industry executives, one representative of an infrastructure player flagged the importance of a building a mutual understanding of the exact scope of the technical elements to be shared. 

Another major takeaway from the event is that Telco's are still figuring out how 5G can bring value to consumers. They need to get their head around this issue and soon – almost all mobile operators generate the bulk of their revenues in the consumer market. Operators often talk about using 5G to provide online gamers with highly-responsive connectivity, but after that, ideas tend to dry up. Olaf Swantee, the former CEO of Sunrise Switzerland, highlighted how 5G can also be used to bring fixed wireless broadband to households, but this opportunity is relatively small in the Netherlands, where the existing fixed-line infrastructure is extensive. 

Right now, many consumers are skeptical about 5G. Only 42% of Dutch respondents in the Deloitte Global Mobile Consumer Survey 2020 expect to have better connectivity when they move to 5G. Tellingly, 68% of the Dutch consumers surveyed said they are not willing to pay a premium for 5G, up from 62% a year earlier. Now is the time to counter this skepticism. In our next blog post, we will take a closer look at how Telco's can use 5G to enhance and enrich their consumer offerings.  

Did you find this useful?