The race for dominance in telecom is going on steadfastly with fifth generation (5G) of mobile network is set get standardized by 2020. The industry is expecting that 5G will solve not only current problems of telecom connectivity but also the problems that may arise in future. The countries and carrier companies that are capable of building network infrastructure and enable device connectivity in the fastest manner will take advantage of being a first-mover. They have to build a nationwide wireless 5G network available for users much before others. 5G technology is revolutionary and not just the next version of 4G or a simple upgrade of speed and capacity. There will be upgrades on performance and power efficiency to have far-reaching impacts like the development of smart cities, connected cars, and networked business communities.
Why winning matters?
There is a virtuous cycle of Users, Data and Services. A top industry consulting firm has released a report about 5G technologies. It has mentioned about the benefits of so-called data network effect in which early leadership in these technologies will give the advantage of having more users who will, in turn, generate more data. More data about the users helps in improving the services and will create interests for more users for availing the services. Thus countries adopting 5G first will enable them to experience disproportionate advantages in a macroeconomic environment of the digital world compared to others. At the macro-level, there will be an advantage to reach the customers with specific and customized services. Indirect benefits like fast economic activity and job growth. Smart cities will be developed to change the very way of doing business through 5G rollouts. The first country to transition to 5G will define who has the edge in development and leadership in technology.
What if it is lost?
Europe is falling behind in the race for 5G user cases mainly due to a lack of urgency among large mobile operators. Building the infrastructure is not fast enough in the US to compete with other countries who have adopted the technology early. It is lagging behind countries like China, Japan, and Turkey who are planning to launch 5G by 2020. A consulting firm has estimated that establishing 5G networks in the US itself could result in three million jobs through construction and maintenance related works. It is likely to post a growth of $500 billion in GDP. But these things are not going to affect the domestic jobs only because other countries like China becomes first to implement 5G.
What does it take to win?
Deploying 5G technology is likely to cost upwards of around two hundred billion USD in a year. Carriers have to spend more for the next five to 10 years and the government can take a small share of the spending. The 5G network’s architecture requires a change from deployment to getting necessary permits. The total investment of around three hundred billion will be required by U.S. network providers as per the some of the estimates.
Who will win?
Recent developments indicate that based on efforts being exerted Asian Telcos and tech giants are coming forward first in rolling out the 5G network and making it on air. Authorities predict that cities such as Tokyo and Seoul, Shanghai, Hong Kong will have access to 5G from 2020 onwards.
Markets like China or South Korea have cooperation at the local level and face much less friction than the governments in the US. It is an advantage when it comes to rolling out their infrastructure. United States and Europe are lagging behind in this race to build a faster nationwide wireless network that uses 5G Technologies. So the prediction is that China is the likely winner followed by Asian countries like South Korea and Japan in a crowded 5G race.