The economic implications of 5G

September 02, 2015 //By Jean-Pierre Joosting
The wireless world is currently undergoing an innovative period where the fundamentals of networks that have been in place for decades are experiencing rapid change and upheaval. This is underpinned by the drive to 5G whatever the final technology and network architecture that might arise.

Consider that as we move to NFV (Network Functions Virtualisation) and SDN (Software Defined Networks) the architecture of a network can be configured in a matter of days rather than months. Cloud resources for the control plane can be added incrementally at the click of a button. Operators can configure resources on the fly and allocate resources where demand is needed. Intelligence will appear at the edge of the network as well as the core and routing protocols can look to local needs first, even going directly from one UE to another without the need for brute force IP routing through the network core.

Even the antennas, which have not changed much in architecture are not immune. Massive MIMO and 3D beam forming hold the promise of boosting throughput ten fold while reducing power requirements. Then with 5G comes the prospect of mm-Wave bands running along side traditional sub-6-GHz bands ramping up the available spectrum by one or two orders of magnitude. Combine all this with more efficient modulation schemes and intelligent software defined networks and the economic case for 5G becomes apparent.

Consumers want fully functional video anywhere they find themselves such is the demand being placed on mobile broadband. Needless to say, everyone sees the need for a network that offers throughput that is at least 10 to 100x better than what 4G can deliver today, and with strict latency requirements, all at lower power levels. Further businesses are looking at the IoT to reduce costs and streamline operations. Here 5G needs to deliver the latency requirements so that critical operations do not fail. Such use cases include delivery of medical data by remote monitors, the remote operation of heavy machinery, or telemetry of critical equipment. Remote surgery or remote medical intervention by doctors while a patient is on the way to hospital in an ambulance are further examples, but they both require high bandwidth and low latency to be trusted.

What does this mean for economics? One key aspect here is that 5G will open up many more use cases for the network and give birth to new businesses as did the advent of the smartphone. However, what it gives with one hand it will take with the other. 5G will result in much better efficiencies and higher productivity. An analogous technology that did this was the rise of the PC. Will 5G destroy jobs? It will but it will also create new jobs and enable industries that are not feasible without the IoT. For example, consider solar farms with thousands of panels that track the sun and use a wireless sensor network to control and monitor all these panels. If, for example, such an installation could leverage a 5G network for a fraction of the cost of a proprietary network it would have a better economic case both in terms of CAPEX (standard wireless sensor network) and OPEX (no need to maintain the network or upgrade it).

Another industry that would be able to implement huge savings costs and add many new capabilities is medicine. As people age the need for monitoring becomes important. We already see systems being sold such as panic alarms that contact the relevant paramedics when there is a problem, but a smartphone and 5G network would enable cost-effective remote monitoring of the quality that is available in a hospital today. Further, it would enable monitoring in real-time with low latency keeping many people out of hospitals and lowering costs. Many new monitoring use cases will also arise. Data captured for specific events such as sleep apnea, for example, would empower doctors and save lives.

As we move to self-aware cars, and autonomous driving, there is a lot of discussion on the networks that need to be built to enable intelligent highways and such. A 5G network would provide a low latency, cost effective alternative to custom systems. However, latency in emergency situations would be critical. For the first time a vehicle could transmit important bio data on the victims in a car crash long before the emergency services arrive.

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