Harnessing the Power of 5G Networks

Roughly every ten years, the wireless industry rolls out a new generation of mobile network technology. In 1982, the first 1G system was launched, followed a decade later by the first 2G system, then the first 3G system in 2001, and finally, in 2012, the 4G system we use today.

Following that pattern, the next generation—5G—is due by 2022, but most industry experts expect it to be ready even sooner. That’s good news because 4G simply can’t keep up with the explosive growth of data usage in recent years.

According to a press release from AT&T, data traffic on its network soared by more than 150,000 percent from 2007 through 2015, and 60 percent of that data in 2015 consisted of video.1

Much of that growth can attributed to the rising popularity of video on social media. According to Tech Insider, Facebook CEO Mark Zuckerberg said in November 2015 that Facebook users view 8 billion videos on the site every day.2

While it’s clear that 4G is becoming outdated, no one knows exactly what 5G will be like, because the official standard for the new technology has yet to be defined. According to Tech Republic, the blueprint for 5G will only be drawn after standards organizations such as the 3GPP, ITU, and IEEE—as well as government agencies, universities, and special interest groups—have all weighed in on the design. That’s expected to happen around 2018.3

So far, however, everyone agrees that 5G will need to meet three criteria:

1.     It must be able to deliver a download at 1 gigabyte per second when the new standard is first launched, and then keep getting faster in the years ahead. That means an entire movie could be downloaded in a few seconds, rather than in the several minutes it takes today.

2.     It must reduce latency to less than one millisecond. Latency is the lag time it takes for the technology to respond to a command. In video streaming, it now takes several seconds, or even minutes, after the play button is pressed before a movie will begin. With 5G, AT&T predicts that latency will drop to 1 to 5 milliseconds.

3.     It must use less energy than 4G. According to CNET, a networked sensor in a remote location will be able to operate for a decade before its battery will need to be replaced.

What makes 5G exciting isn’t just that it will make your smartphone smarter, more powerful, and more efficient. The real benefits will come from the other truly revolutionary technologies that it will enable. Consider the following applications, all of which have been explored in previous issues of Trends:

•       The Internet of Things will become a reality because the billions of networked devices and sensors will need less power, will last much longer, and will be able to exchange information faster and with less friction.

•       Virtual reality will finally reach its potential for both gaming and business applications—including virtual meetings between remote office workers, and virtual training for factory workers on how to repair robots.

•       Robots working with humans and other robots in factories and distribution centers will be able to get work done faster, more safely, and more efficiently when they can exchange information at quicker speeds.

•       Medical care will be transformed as doctors will be able to perform remote surgery on patients located thousands of miles away by using wirelessly controlled robotic hands linked to a 5G network.

•       Hundreds of millions of driverless vehicles will become safe enough to operate on roads autonomously because the virtual elimination of latency will mean that a car or truck will respond instantaneously to the need to activate the brakes or swerve around an object in the road, rather than taking a few, potentially fatal, seconds to process the information.

All of these amazing applications depend on the increased speed of 5G, which leads to an important question: Just how fast will 5G be?

Nokia has reported that it achieved download speeds of 30 gigabits per second in 5G tests—an improvement of 1,000 times over 4G.

However, as CNN Money pointed out, in the real world, when trees and buildings get in the way, and millions of other devices are on the same network, users won’t get the same results.4 However, more realistic estimates of the acceleration vary from 10 to 100 times the speed of 4G.

That increase in speed won’t come cheap. South Korea estimates that its companies will need to invest more than $300 billion to develop the technology and infrastructure for 5G. In the U.S., with a larger land mass and a population that is more than six times larger, we expect that the investment will be in the tens of trillions.

Some of that cost will be passed on to consumers in the form of higher bills for mobile service. Consumers will also need to buy new smartphones and other mobile devices because the new technology will not be backwards-compatible. But there’s no question that once 5G is launched, users will gladly pay a premium for faster, more reliable service.

Based on our analysis of this trend, we offer the following forecasts:

First, 5G will become available in the U.S. by 2020.

That’s the consensus of a diverse set of prognosticators. However, South Korea has already invested $1.5 billion in 5G and may introduce an early version of the mobile technology in time for the 2018 Winter Olympic Games that it is hosting in PyeonChang. Because the 5G standard is unlikely to be finalized by that time, any smartphones or devices that consumers will purchase at exorbitant prices could become quickly obsolete in the same way that Betamax owners ended up on the losing side of the standards war that was won by VHS.

Second, while the 5G standard has not yet been established, it is already becoming likely that it will use “multiple input multiple output” (MiMo) technology.

According to articles in Tech Republic and The Guardian, instead of relying on one or two antennae as wireless devices do today to connect to the network, MiMo will be able to leverage more than 100 small antennae.5 And to expand and improve coverage, 5G developers are likely to go beyond today’s cell towers to include small, router-sized stations that could be strapped to lampposts, installed in homes, and even embedded in bricks in the walls of buildings.

Third, the rollout of 5G will provide further evidence of the superiority of free-market capitalism in improving the well being of the world’s population.

Innovations like 5G (and of course, countless previous inventions like the automobile, the electric light bulb, the airplane, the supercomputer, and the smartphone) could only emerge in a society that rewards entrepreneurship. Unlike centralized economies like China’s, where state-run enterprises spend billions of dollars to maintain the status quo and prevent social upheaval, private investment in the U.S. is targeted at great ideas with proven commercial potential. Meanwhile, Russia, under Vladimir Putin, is reviving the geopolitical hostility of the Soviet era while its teetering economy, built on the misguided theory that oil will always be expensive, continues to crumble. China, Russia, North Korea, and other nations that suppress free thinking and free markets will continue to look to countries like the United States, Japan, Finland, and South Korea for the innovations they can’t develop on their own. And by the time those totalitarian countries succeed in leasing, copying, or pirating 5G technology, the U.S. and other free-market innovators will be ready to unleash 6G to an eager world.

References

1.     For more information regarding AT&T’s 5G roadmap, visit their website at: http://about.att.com/story/unveils_5g_roadmap_including_trials.html

2.     Tech Insider, November 4, 2015, “Facebook Is Now Generating 8 Billion Video Views Per Day from Just 500 Million People—Here’s How That’s Possible,” by Alyson Shontell. © 2015 Business Insider, Inc. All rights reserved. http://www.techinsider.io/facebook-is-now-generating-8-billion-video-views-per-day-2015-11

3.     TechRepublic, December 15, 2014, “The Race to 5G: Inside the Fight for the Future of Mobile as We Know It,” by Joe Best. © CBS Interactive. All rights reserved. http://www.techrepublic.com/article/does-the-world-really-need-5g/

4.     CNNMoney, February 9, 2016, “What a World with 5G Will Look Like,” by David Goldman. © 2016 Cable News Network. A Time Warner Company. All rights reserved. http://money.cnn.com/2016/02/09/technology/5g/

5.     The Guardian, August 26, 2014, “The 5G Network: When Will It Launch and What Will It Mean for Consumers?” by J.T. Ripton. © 2014 Guardian News and Media Limited. All rights reserved. http://www.theguardian.com/media-network/media-network-blog/2014/aug/26/5g-network-launch-mobile-consumers-connectivity-download