5G’s opportunities for the industry

5G is the driver of hyperconnectivity, digital transformation and the economy of the future

5G, as explained in previous analyses is a new technology evolution that builds a path for countless products, services and applications. The deployment of 5G will change our day-to-day lives in various ways by enabling actions that seem like science fiction today but will become a reality tomorrow.

Some of the key trends that will rely the most on 5G are cloud-based virtual reality and augmented reality. These two environments require handling a massive amount of data as well as devices capable of processing all that information.

To date, the developments of many virtual and augmented reality programmers are limited because they cannot find a network that supports the applications they are creating. There is where 5G becomes a fundamental part by creating the possibility of adding new services and use experiences in the everyday lives of users and the industry. Some of the opportunities include feeder automation in connected energy, security and inspection drones, live broadcasting in UHD for social media and artificial intelligence personal assistants.

There are many 5G use cases, depending on the industries involved. Upon considering market trends and their reliance on 5G, we have selected the top five opportunities that we believe are the most relevant and revolutionary for the industry:

 

1. Connected vehicles – Autonomous remote driving and platooning

ABI Research estimates that there will be 60.3 million vehicles connected to 5G by 2025. This number will continue to grow between 2025 and 2030 due to traditional vehicle replacement cycles ranging from 7 to 10 years.

This is one of the biggest use cases for most trials involving 5G technology. This technology is required because of the amount of sensors that play a key role as well as the vehicle’s communication capacity with its surroundings, other vehicles and traffic signs. Reducing direct human intervention increases the need for more frequent information exchanges between the vehicle control system and the cloud-based backend systems, a series of patterns that influence the vehicle’s response in real time .

The biggest technology trends that drive the mobility revolution (autonomous driving, cooperative mobility, preventive maintenance and data collection from sensors) require secure, reliable, low-latency broadband connectivity.

For example, 4G has a latency of 50 ms, which means that if a car travels at 100 km/h when a sensor detects an order, the vehicle will cover 1.5 meters as it processes what needs to be done. This distance is critical when it comes to safety. On the other hand, 5G has a latency of less than one millisecond, resulting in the necessary performance for highway speeds and dense urban settings. Only 5G can meet all of these rigorous connectivity requirements to provide additional location information and enable high-precision navigation thanks to the broadband connections and low-latency flows from other vehicles and roadway infrastructures.

As the role of connectivity grows, the connected vehicle market is ready for a radical transformation to become a key enabler of safer and more sustainable mobility.

 

2. Smart industry – Cloud-based wireless robotics

Fixed connections continue to dominate in terms of the number of industrial IoT connections. 5G is expected have a compound annual growth rate (CAGR) of 464% between 2022 and 2026.

Some of the industry’s main advances include shifts towards lean manufacturing, digitalization and improved flexibility in work and production processes. The industry has recently also experienced a strong change towards the Industrial Internet of Things (IIoT).

Historically, manufacturers have turned to wired technologies for their connected applications. Although wireless solutions such as Wi-Fi, Bluetooth and WirelessHART have been making their way into factories, these wireless solutions have limitations as far as security and reliable bandwidth. For example, robots coordinated in a real-time isochronic manner (pendulum format) require a network latency of less than one millisecond, which is only possible with 5G.

With the arrival of 5G, the expected benefits for the industry are increased productivity (through collaborative robots and augmented reality glasses to guide workers), shorter downtimes and lower maintenance costs (through constant monitoring or machine learning), and reduced inventory and logistics costs.

In late 2017, there were 18 million condition-based monitoring connections throughout the world, and this number is expected to reach 88 million by 2025. The same will occur with the number of industrial robots worldwide, which will grow from 360,000 to 105 million. In any case, if manufacturing companies want to make the most of the Industrial Internet of Things, they must implement an end-to-end solution that covers the supply chain, the production facility and the entire product life cycle.

 

3. eHealth – Remote diagnosis and treatment

The amount invested in the smart health market is expected to surpass $230 billion by 2025. 5G will provide connectivity for an increasingly higher proportion of this investment.

Along with connected vehicles, eHealth is one of the fields with the strongest future potential. In the last five years, the adoption of technologies with wireless connectivity in medical devices has risen. Health professionals have started to integrate remote solutions for diagnosis via audio/video, surgery, and health monitoring (telemedicine) using portable devices and wearables.

A remote diagnosis, such as a wireless endoscopy or ultrasound, depends on the interaction between the patient and the device terminal. The sensitivity of the doctor’s actions requires a network with a lower latency than what is currently available.

eHealth has many applications, such as the elderly. In Spain, the population segment over 65 years of age currently represents 19% of the total, compared with 82% in 1960. This number will jump to 262% in 2031, although it has already reached 25% in Asturias and other regions.

In fact, the worldwide population over 55 years of age will almost double between 2000 and 2030, rising from 12% to 20%. Using data from the UN, Moody’s Analytics has reported that certain countries (the United Kingdom, Japan, Germany, Italy, the United States and France) will become “super aged” in several years, meaning that at least 20% of their population will be 65 or older.

Faced with this situation, the health sector has the chance to develop a fully personalized medical consultation service that works with AI medical systems operated by doctors connected via 5G. In a recent survey, B2B ABI Research discovered that 42% of the respondents in this sector have solid plans for 5G deployments and they are certain of their role as providers of advanced health solutions.

The evolution of technology in the health profession is being driven in North America as well as in the German and North Asian markets. Emerging applications include cloud-based data analysis, artificial intelligence medical assistants, ambulance communications using 5G and remote diagnosis.

 

4. Home entertainment – Wireless UHD 8K video and cloud-based gaming

5G is expected to handle a receptive and immersive 4K gaming experience at 90 fps with an end-to-end latency of 10 ms overall and an end-to-end latency of 1 ms for use cases that require extremely low latency.

One of the first commercial use cases for 5G will be fixed wireless access, which is designed to provide Internet access to homes that use wireless mobile network technology instead of landlines. Fixed wireless access, or WTTx (wireless to the x), can significantly shorten the network’s deployment time and does not require digging ditches, laying fiber optic cables or installing posts.

With WTTx, a telecommunications provider can provide a platform for a series of value-added services for smart homes that can be improved by integrating an artificial intelligence digital assistant, analyzing data aggregation and developing software applications.

At the end of 2017, the number of homes with fixed broadband subscriptions was 854 million, which is equivalent to only 44% of global households. According to predictions, 350 million homes could potentially have WTTx by 2020. As we can see, the forecasts for growth and efficiency are fairly positive.

In the world of home entertainment, the top applications are linked to networks, watching videos, gaming and smart homes. TV, gaming and automated home applications will position la telecommunications providers at the heart of smart homes since an 8K video at data speeds of more than 100 Mbps will require the bandwidth available through 5G. According to estimates, lower prices and new subscription-based UHD television services will drive half of television users throughout the world to use 4K/8K devices by 2020.

 

5. Smart cities – AI-powered video surveillance

The estimated revenue from value-added services in the non-consumer video surveillance market was $12 billion in 2017 and is expected to reach $21 billion by 2025.

To date, smart cities have classified video surveillance as another vertical in their model, alongside sensor deployment. A city’s video surveillance system is a valuable tool that improves security and safety, while boosting the productivity of businesses and institutions.

The demand for video surveillance is driven by innovation in video camera technology and the availability of cloud storage that makes it possible to collect and analyze data in real time so as to predict undesirable or dangerous situations. The evolution of wireless surveillance cameras to 4K Full HD in the 5G era will expand the useful applications and simplify their implementation.

The improved functionality of the latest video surveillance cameras—such as high video frame rates, HD and WDR (Wide Dynamic Range, which makes it possible to capture images in low-light situations)—will generate significant data traffic. HD traffic requires 50 Mbps, but this number can exceed 120 Mbps in the case of 8K video at 60 fps

For the next generation of video surveillance services, smart cities must shift from the traditional commercial model based on “implementing and delivering the system.” Once this is accomplished, smart cities will migrate to a video surveillance as a service (VSaaS) model. In VSaaS, the process of recording and storing the video, along with managing and monitoring the hardware and services, is done through the cloud and delivered by the service provider.

According to data, more than 180 million cameras have been deployed in China to implement the “citizen score” system. The cameras are equipped with artificial intelligence solutions (so far, “only” 20 million of the 180 million are equipped with AI) to “evaluate” the behavior of citizens and adjust their citizen score accordingly.

 

Conclusions

Although the initial opportunities linked to 5G will appear in the telecommunications sector, the corporate sector must pay special attention to any client mentions of the aforementioned use cases.

Nevertheless, the first major obstacle will be faced by telecommunications providers since the development of 5G will require them to build the networks of the future, faster than ever and with a minimum impact on their business processes.

Telecommunications providers will need a clear strategy to improve their existing transport networks which sustaining the macro networks that will bear most of the weight. To do so, they must migrate to an SDN and NFV environment as a measure for reducing the complexities and costs of their transport networks.

It is estimated that there will be 80 billion connected devices by 2025. The Internet of Things (IoT) strives to simultaneously connect our homes, vehicles, watches and cities to the network, as well as to cover the growing demand for real-time data analysis used to predict and execute processes. This is why 5G is the driver of hyperconnectivity, digital transformation and the economy of the future. 5G will be a key technology in meeting the requirements and needs of a connected society as well as in digitalizing other industries.

 

Gregorio Recio
gregorio.recio@nae.es

Gorka Riocerezo
gorka.riocerezo@nae.es

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Nae works with telecom operators, large companies and public administrations to anticipate the challenges of market growth and transformation, improving their business strategy and operational efficiency. The company has offices in Spain, Colombia, Mexico, Brazil and Costa Rica, and has a team of over 400 professionals.