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5G: The new standard promises much, but full implementation will take time

29 April 2019 Josh Builta

Digital Orbit is an executive briefing from IHS Markit that tracks how six transformative technologies are disrupting life and industry. Here in the third installment of the series, we focus on the next-generation mobile standard known as 5G.

After intense anticipation and industry preparation, commercial networks for 5G are finally starting to become available. Late 2018 saw the initial deployment of 5G with a handful of fixed-wireless access (FWA) launches from the likes of Verizon. This year, mobile 5G network launches are set to take place across the globe, including the US, China, South Korea, Japan, and several countries in the Middle East.

As the successor to 4G LTE, 5G is positioned to transform virtually all aspects of everyday life. Yet our of the six transformative technologies studied by the Digital Orbit briefing, 5G was judged to be the least ready for widescale adoption by industries such as healthcare and manufacturing.

Digital Orbit image: The path to 5G

5G matters—but we're not there just yet

5G is significant because it brings three compelling benefits: faster data speeds, lower latency, and increased connectivity. These capabilities will enable new use cases, such as driverless cars, immersive entertainment, zero-delay virtual reality, uninterrupted video, and no-latency gaming. On the industrial front, 5G will be key to expanding and realizing the full promise of the internet of things (IoT), with its impact to be felt in smart homes, smart cities, and smart industries.

But while initial 5G network launches have started, many key features of the technology will not be available immediately. 5G network rollouts in 2019 will largely focus on the enhanced mobile broadband (eMBB) element of 5G, which in many ways is an extension of the capabilities that already exist with 4G LTE and LTE Advanced.

The release of the wider range of 5G capabilities will unfold in a phased approach over the next few years. For instance, ultra-reliable low-latency communications (URLLC), which will allow 5G to support mission-critical applications such as autonomous vehicles, is unlikely to roll out before 2020. Similarly, the first 5G specifications for Massive IoT are not scheduled for completion until early next year.

Given this extended timeline, it is not surprising that Digital Orbit readiness scores for 5G varied widely by industry. With their focus on eMBB, the initial 5G launches are tightly aligned with the needs of the telecoms and consumer sectors. For industries like healthcare and manufacturing, the future capabilities of 5G will be the ones that count, preparing the technology for adoption in those sectors.

Where to, from here?

The marketplace implicitly understands that 5G represents an unprecedented growth opportunity, with the projected initial launch of 5G smartphones set to generate record shipment volumes. What many may not realize, however, is that the rollout of 5G is a process involving multiple major updates, with these updates adding new capabilities over time.

Each release will also deliver new challenges and opportunities in every industry for which new use cases are envisioned. The rollout will likely trigger a race among mobile network operators to take advantage of the performance enhancements presented by 5G. Future revisions will spur similar competitive battles, with 5G expanding into other markets beyond mobile communications, such as mission-critical applications and Massive IoT deployments.

For companies throughout the technology supply chain—from network operators, to smartphone brands, to industrial and automotive device manufacturers and electronics suppliers—understanding the changes brought by each phase of 5G deployment will be extremely important.

This way, companies can capitalize on the latest capabilities made possible by 5G to gain a competitive advantage—or they risk falling behind.

For more details, visit our Digital Orbit section, where you can also download a free white paper.

Josh Builta is senior principal analyst for transformative technologies at IHS Markit
Posted 29 April 2019


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