In my mind, 5G fundamentally changes the game by enabling, for the first time, innovation at scale and speed. And this innovation is anchored across a number of new capabilities, or what some in the industry are increasingly referring to as “currencies” – Verizon CEO Hans Vestberg refers to a total of 8 that are in play! Beyond the whopping mobile broadband capacity gain with average user experience rates now in the hundreds of Mbps and potentially approaching 1Gps+ over the next few years (!), 5G brings an approximate 10X factor improvement in increased connection density (think Internet of Things [IoT] applications) and latency reduction (critical, for example, in emerging self-driving transport applications).Other “currencies” include significant improvements in reliability, data volume, energy efficiency, mobility, and service deployment velocity. What, then, are the 5G use cases enabled with these new currencies? A now famous and international standards based 5G technology triangle neatly summarizes the rapidly growing potential consumer and business application landscape (see figure below). Let us explore some details associated with this triangle.
Enhanced Mobile Broadband (eMBB)
eMBB represents the logical extension of 4G/LTE capability, enabling much higher throughputs (up to 10X as much and even more) to support diverse applications ranging from new high performance and low latency immersive experiences (AR/VR/XR), to high quality video streaming and web access.
Massive Machine Type Communications (mMTC)
mMTC builds on the very modest 4G/LTE Internet of Things (IoT) capabilities to support a much larger number of devices (up to 1 Million+/sq. km) with significantly lower connectivity costs, enhanced coverage, and long battery life. One of the well publicized mMTC showpieces is smart cities.
Ultra-High Reliability and Low Latency Communications (URLLC)
URLLC can fundamentally transform diverse industries with support for ultra-reliable, available, low-latency links enabling efficient control of critical infrastructure (e.g., drones, factory automation, power grids), self-driving transport, emergency medical response, and enhanced public safety.
Given the large performance variation within the technology triangle, it is also especially useful to consider specific eMBB, mMTC, and URLLC use cases across the potential interaction spectrum – machine to machine, machine to human, and human to human. So, for example, a “smart vehicle” communicating directly with another nearby “smart vehicle” as part of a 5G V2V (vehicle to vehicle) solution falls under the machine to machine interaction involving a particular URLLC use case. Similarly, a “smart vehicle” communicating directly with a “smart pedestrian” as part of a safety related mMTC V2P (vehicle to pedestrian) use case falls under the machine to human interaction. And finally, an HD multi-party video call involving some AR/VR elements would constitute an eMBB use case with a human to human interaction.
5G Technology Overview
To support all these amazing and compelling new capabilities, 5G brings to the table a truly impressive ensemble of new technologies including innovative RF (radio frequency) spectrum management (e.g., millimeter wave [mmWave] expansion, dynamic sharing, unlicensed/licensed spectrum support), network densification options (e.g., small cells and massive MIMO [multiple input/multiple output] antenna structures), and new flexible architectures (e.g., edge computing, network slicing, and open radio access network [O-RAN]). The dramatic spectrum expansion options enabled by 5G are eye popping, in particular:
- Low Bands - < 1GHz supporting longer range for mMTC and some eMBB applications
- Mid Bands - 1-6GHz supporting high throughputs and broad coverage for eMBB and URLLC applications
- High Bands - > 24GHz supporting shorter range, extreme throughputs for eMBB applications
It is interesting to contrast the above rich 5G spectrum diversity options (i.e., 600MHz to eventually 100GHz+) to current/legacy 4G options which operate over a much narrower range (i.e., 700MHz to 2.5GHz). Spectrum is a very scarce, and hence, very expensive resource. The more you have available, the more innovation and potential economic benefit that can be realized. This is one of the key reasons as to why 5G has generated so much industry enthusiasm. Most interestingly, the mmWave spectrum has generated a lot of intrigue not only because of the massive new capacity it will enable, but also because of the related potential and controversial health/environment related concerns (more on that later). Closely linked to the mmWave expansion is the associated densification that is needed in the form of massive deployment of small cells which, for North America alone, is projected to run into potentally several million! Densifaction efforts are not new given the experiences over the past decade with 4G deployments. However, the scale needed for 5G is just so signficant and disruptive that relevant ecosystem players will need to carefully plan to ensure streamlined regulatory and installation processes, certainly a very challenging road ahead.
One of the most powerful core components of the 5G architecture that enables a service provider to dynamically support a specific service level agreement (SLA) consisting of a particular subset of these “currencies” is network slicing. In effect, a slice represents one of many independent, isolated, and virtualized networks that are supported within the underlying 5G physical network and each addressing a specific business use case/SLA. As the 5G network deployment continues to expand aggressively over the next few years and, in the process, network slicing (alongside supporting infrastructure such as edge computing) becomes fully operationalized, there is a growing industry consensus that there will be a seismic shift in the use case monetization from consumers (B2C) to enterprises and industrial applications (B2B).
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5G Commercialization Status
Early 5G deployments in the USA, Europe and parts of Asia began in 2019. Canadian deployments have followed earlier in 2020 and are accelerating into 2021. A 2020 GSMA report suggests that the contribution of mobile to the overall North American economy will approach about 5% of GDP by 2025 with 5G representing approximately 50% of connections. Also, recent Accenture reports suggest that:
- US: Mobile CSPs will invest approximately $275B in 5G infrastructure over the next few years, potentially creating up to 3M jobs and boost annual GDP by $500B.
- Canada: 5G technology could add ~ $40 Billion in annual GDP and create up to 250,000 permanent new jobs by 2026.
These early deployments have, for the most part, focused on the amazing throughput gain with commercial efforts associated with the other key currencies including latency reduction and increased connection density to be rolled out over the next couple of years. We really are at the beginning of what is likely to be an approximate 10-year 5G ramp/deployment cycle. A recent 2020 McKinsey brief highlights the emerging broader global connectivity spectrum at play consisting of “advanced connectivity” (i.e., evolution of existing wired and wireless infrastructure including low to mid band 5G and WiFi 6) and more revolutionary “frontier connectivity” (which includes high band 5G and LEO satellites), which will drive trillions of dollars of global GDP increase over the next decade.
What is most intriguing is that this 5G ramp is coinciding with dramatic advances in a wide range of other disruptive technologies including IoT, AI/ML/FL, AR/VR/XR, Robotics, SDN, Multi-Cloud, Serverless and Edge Computing, Blockchain/DLT, and Quantum Computing.
Indeed, this next decade will witness an unprecedented level of innovation driven by new social and business models underpinned by the disruptive combinatorial effects associated with these diverse technologies and ecosystems. In the recently published article The Future is Faster Than You Think, authors Diamandis/Kotler characterize these effects as a convergence phenomenon:
“The new news is that formerly independent waves of accelerating technology are beginning to converge with other independent waves of accelerating technology….and if we struggle to track the growth of singular innovations, we’re downright helpless in the face of converging ones.”
In many ways, 5G will be increasingly positioned at the center of this convergence equation pushed by ongoing supply side Moore’s Law - like cost efficiencies and pulled forward by demand side Metcalfe’s Law - like network effects. Salesforce’s John Carney refers to the pending 2020 'Perfect Storm' of 5G, AI and Digital Natives that will heavily disrupt communications service providers (CSPs). And 5G is expected to figure prominently in the so-called “three great rebalancings – machines, platform and crowd” as espoused by McAfee and Brynjolfsson in their excellent recent book, Machine, Platform, Crowd: Harnessing our Digital Future.
Convergence and innovation at scale and speed, as mentioned above, represent two of the key distinguishing features of 5G. A third one, which is perhaps the most significant is complexity. The self-driving transport use case represents the most iconic 5G example of complexity. This is not only because it pushes the performance envelope on all three elements of the famous technology triangle, but also drives unique challenges across political, socio-economic, ethical, and legal dimensions. MIT’s intriguing recent “Moral Machine” experiments involving various ethical dilemmas (e.g., the well known “Trolley Problem”) with self-driving cars reveal significant global cross-cultural differences. These differences attest to this complexity, and this, to just one aspect comprising a wide spectrum of dimensions to the broader self-driving use case challenge.
Complexity, 5G and the Race to Control the “Edge”
Physicist Stephen Hawking famously declared that the 21st century would be “the century of complexity”. The convergence phenomenon discussed previously can also be recast as a game in managing complexity – both within a single ecosystem and across multiple ecosystems. Although clear definitions of complexity represent an ongoing industry and academic challenge, there is a growing consensus that it is anchored on two key thought tracks – emergence over scale and self-organization over time. The rise of so-called smart cities, enabled in large part by new mobile technologies such as 5G and WiFi 6, are wonderful examples of complex adaptive systems. Note that many of the iconic self-driving use case scenarios (some of which were briefly discussed above) fall under this smart cities complexity framework.
With increasing complexity, business stakes are skyrocketing with a corresponding escalation in competitive intensity. And there is no better example of this new level of feverish intensity than the dramatic race to control the edge. Clear definitions of the edge, as with complexity, continue to be a highly active debate within international standards bodies and platform/technology provider marketing circles. Edge computing use cases are focused on addressing some of the key aforementioned currencies including latency and capacity but also, and increasingly, privacy and security. How the 5G-powered edge will develop and complement the “traditional” public cloud infrastructure that has matured over the last 10 years has already resulted in some intriguing new industry “partnerships” between, for example, public cloud platform players and telecom operators. There are certainly legitimate concerns within the telecom corridors that telcos will become the “bag carriers and bellboys of the edge market, while FAANG (Facebook, Amazon, Apple, Netflix and Google) plus Microsoft run the show” (as has largely been the case over the last decade with the massive global deployment of 4G). One thing that is becoming increasingly clear, however, is that the deployment of 5G will amplify the differences (and opportunities!) between cloud-native vs. edge-native thinking across people, process, technology, and even geopolitical dimensions.
5G Techno-Geopolitics and Huawei – The inevitability of a digital iron curtain?
One intriguing recent development over the last few years is the role of Huawei in the global 5G equipment supply chain. The ongoing trade related tensions involving China and the US brought Canada into the mix when the Canadian RCMP, in compliance with the existing US – Canada extradition treaty, arrested Huawei’s CFO, Meng Wanzhou, in Vancouver in December 2018. This action, in conjunction with Canada’s ongoing security-related review of Huawei related to the pending 5G deployment in Canada further enmeshed Canada in escalating geopolitics. Parallel to this sensitive situation, the US March 2020 enactment of the Secure and Trusted Communications Networks Act added further fuel to the 5G-related geopolitical tensions by not only explicitly targeting China-based Huawei and ZTE but also by sending clear messages to its “Five Eyes” partners (i.e., Canada, Australia, UK, and New Zealand). Indeed, the UK just reversed its January 2020 decision and has now given UK mobile operators until the end of this year to purchase and by 2027 to phase out all Huawei 5G equipment. Also, in August, the US Department of State announced further expansion of their “Clean Network” program with heavy focus on “protection” of new 5G infrastructure from Chinese suppliers.
And to add more spice to the equation, Huawei has been recently implicated in concerted espionage efforts contributing in part to the downfall/bankruptcy of one of Canada’s (aka “the West’s”) tech darlings, Nortel, in 2009 (and where incidentally, I spent the first third of my technology career).
These events spell trouble, not only for resetting global supply chains, but also for the growing balkanization of the internet, or what others have called the inevitable rise of a new digital iron curtain. This 5G ecosystem fracture has now literally expanded to the skies and beyond with China’s completion of its rival GPS system called Beidou and will soon be reinforced with the emerging and highly contentious global Low Earth Orbit (LEO) satellite battle. These developments add additional dimensions of complexity to this race to control the increasingly geopolitical and 5G-infused edge.
Understanding history over the last century certainly provides some relevant insights into the growing techno-geopolitics of today. More specifically, in a recent fascinating opinion piece in the Wall Street Journal, American historian Katherine Epstein emphasizes a central theme: “In challenging Britain’s hegemony, a century ago, U.S. tactics look similar to Beijing’s today…In short, the US was the China of the Age…” Some particularly interesting food for thought!
Speaking of history and beyond these critical geopolitical issues discussed previously, it will certainly be curious over the coming years as we will inevitably look back to the beginning of this decade and assess how COVID-19 shaped the 5G launch and degree of success on both the consumer and business side.
COVID-19 Impact on 5G Commercialization
Given the deep negative 2020 COVID-19 related economic impacts and continuing risks and “unknowns” going forward, where does this leave the commercialization status of 5G? The key annual Mobile World Congress (MWC) event at Barcelona in February 2020, which was expected to become the 5G monster showcase, was cancelled because of the pandemic forcing a serious resetting of 5G go-to-market strategies across the globe. This was supposed to be the big 5G commercialization year. On the supply side, network infrastructure investments have continued to gain momentum in the US and China but somewhat checked by delayed 5G spectrum auctions in parts of the EU and Canada. On the demand side, even with innovative early 5G handsets, for example, Samsung’s S20 line hitting the market, there have been, not unexpectedly, short term impacts. Lurking just around the corner, however, is the “Apple effect”, particularly in North America and Europe, as the market eagerly awaits for Apple’s entry into the 5G world in the fall with its expected refreshed 5G powered iPhone line. Google has also entered the mix with their own refreshed 5G Pixel line announced at the end of September. And, rather intriguingly, Blackberry will now be launching a 5G phone in 2021. Let the games begin!
In their recent quarterly earnings call, the Microsoft CEO said, “We’ve seen two years’ worth of digital transformation in two months”. This bodes well not only for accelerated migration to the cloud but also accentuates the need to prepare for the coming 5G powered edge and the awesome innovation that this will enable.
Beyond the geopolitics and COVID-19 related questions, there are several other fundamental 5G related commercialization challenges that, if not tackled early on with transparency, active public engagement as well as innovation, may result in adverse impacts to the anticipated widespread 5G success. This is further explored in my next blog post entitled “Inconvenient” Elephants in the Room – 5G Potential Impacts on Health and Environment”.
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About John Nikolopoulos John Nikolopoulos is a Mobile/Cloud/Telecom/IT global technology/consulting executive with 25+ years in senior leadership roles in Sales, BD/GTM, Product/P&L Management, and Solution/Systems Architecture teams driving global channels, partnerships & enterprise deployments with $billions of global sales in diverse industry verticals within F500/Large Cap enterprises (Accenture, Nortel, and Sagemcom ) as well as high profile start-ups such as Corvis Corp., where he was part of the senior GTM/execution team leading to one of the largest exits in tech industry history with a 1.1 billion$ IPO. John has a significant international technical publication (50+) and public speaking record, contributed to multiple patent filings, achieved senior member status within the IEEE, and gained extensive Wall Street/Silicon Valley Analyst/Board of Directors executive communications experience.
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