Why 5G really matters

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Why 5G really matters

Enterprises will see major benefits from an exponential expansion in connectivity

The latest generation of mobile technology - 5G - is going to change the world. But not in the ways you might think. Not withstanding the hype about remote surgery, autonomous vehicles, delivery drones and other high-profile applications, 5G’s biggest impact is set to be behind the scenes: inside factories, warehouses, depots and industrial plants.

More digital, more data and better decisions

Supporting faster throughput, lower latency, greater reliability and a higher density of connections, this versatile new mobile technology will usher in the next phase of digital transformation for enterprises across the economy. In essence, 5G will make it cost-effective for companies to reliably and securely monitor many more of their assets than they do today. As a result, management teams will have the detailed real-time data they need to make more timely and better-informed decisions.

By bringing connectivity to many more machines and tools, 5G will also enable new levels of remote control and automation, allowing all kinds of equipment to exchange information in real-time. As a result, increasingly autonomous machines will optimize their own actions in response to what is going on around them. For example, a connected freight vehicle could inform a robotic unloading system and a production line exactly when it will arrive, enabling much greater coordination between these components of the supply chain. Designed to support “massive machine type communications” (both over wide areas and deep indoors), 5G opens up these kinds of use cases for the first time.

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A seismic impact on the economy

More broadly, 5G will enable mobile operators to accommodate the fast rising demand for mobile data traffic, as people access more and more multimedia services online, by supporting ‘eMBB’ (enhanced mobile broadband). But the value that 5G can ultimately create is not constrained by the number of people and the amount of time they have for consuming information: Over time, 5G could connect tens of billions things to other things. As vast numbers of things come online, the net impact on productivity and automation could have a seismic impact on the macro economy, boosting GDP significantly1.

Metcalf’s Law states that the value of a network is the square of the number of connections and thus each connection is “worth” more than the last. It is normally used to describe the effect of people connecting to the phone network or Internet, but Deloitte believes connected devices will also follow Metcalf’s Law, rather than a linear rule model.

Moreover, 5G will generate a step change in the quality of connectivity, as well as the quantity of the connectivity. As well as delivering far more bandwidth than 4G, 5G is designed to support ultra reliable low latency communications (‘URLLC’), so that best effort propositions can be replaced by guaranteed availability. The new mobile technology can also support network slicing, enabling operators to dedicate a ’slice’ of their network to a specific application or user segment.

At the same time, 5G will help pave the way for multi access edge computing (MEC) providing an IT service environment and cloud-computing capabilities at the edge of the mobile network, in close proximity to end-users. MEC will increase both reliability and responsiveness, helping to support precision operations and remote management of machines and assets.

The potential enterprise use cases for ultra-reliable and low latency connectivity are only limited by imagination. For example, engineers will have fingertip control over maintenance robots, enabling them to supervise intricate repairs using live video feeds and data from sensors. In a similar vein, connected cameras could continuously monitor every segment of a production line, capturing images that can be analysed in real-time for any signs of defects or inefficiencies in the process. As these systems capture more and more data, software will learn why and when faults will occur, enabling the production line to take preventive action. In the public sector, 5G will bring similar predictive capabilities to the management of transport networks, healthcare systems and municipal services, such as street lighting and waste disposal.

Selective step by selective step

Of course, none of this will happen over night: it will take time for 5G to be deployed across Europe, partly because it could take years for all the necessary spectrum to become available. In the Netherlands, the 700MHz spectrum band is set to be auctioned at the beginning of next year, and higher-capacity 5G frequencies (e.g. 3.5 GHz) with the true 5G characteristics will be released at the end of 2021 or beginning of 2022 only.

Initially, 5G adoption by businesses will be selective. The early use cases will likely involve the replacement of existing private local area network (LAN) solutions, as 5G will improve on their capabilities and increase flexibility and scalability. In some cases, 5G will work alongside 4G and the existing enterprise networks, filling in the gaps, and ensuring that connectivity is always available to manage the information flow at scale. Operating in licensed spectrum, 5G should be able to offer greater privacy and safety than Wi-Fi, while also delivering a more reliable quality of service.

In many cases, enterprises will source their 5G connectivity from telecoms operators, which could use this highly-capable and versatile technology to strengthen their position in the ICT value chain. But some regulators also seem willing to allocate spectrum to enterprises to allow them to independently build their own private 5G networks. Some firms, such as BMW, Daimler and Volkswagen in Germany, and Augurre in France, are exploring this option.

In summary, 5G is set to transform the way enterprises work, primarily because companies can mould this versatile technology to meet their specific needs, adding connected sensors and actuators to everything from small tools to blast furnaces. Unlike previous generations of mobile technologies, 5G is designed to bring billions of things online and deliver new levels of insight and automation.


a study by Deloitte found that 5G could increase Scotland’s GDP by up to 8.3% in the long-term.

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