Innovative and technological advancements correspond closely with new avenues of revenue as well as entirely unique business models. One trend that is often forgotten in discussions surrounding Industry 4.0 is the nature of connectivity: what is the value of 5G mobile networks? How will this value transform the global economy, and more specifically optimize the quality of the solutions that Ambrosus is capable of offering to various industries?

In order to precisely breakdown the value of 5G technology for the Ambrosus Ecosystem, a distinction must first be made between 4G and 5G networks; their capabilities, how they differ, and what the real value of upgrading to 5G may be. With such a foundation, an explanation of the business proposition behind 5G networks, especially in relation to the Industrial Internet of Things (IIoT) is provided. Finally, the Ambrosus Ecosystem is discussed insofar as 5G technology will be able to vastly improve the efficiency, security, and forms of data transmitted to AMB-NET.

Understanding the Mobile Revolution: 4G and 5G

Due to the ease from which telecommunications technology has advanced over the past two decades, it is easy to overlook the magnitude of change that has taken place: it was not until 2003 that mobile networks became more widely used than fixed landlines. 3G network connectivity, in its early stages, allowed for calling and other basic forms of communication, but still required a number of years before efficient and large amounts of data could be transacted across networks. At the turn of the decade in 2009 and 2010, 4G network capacities began to be offered by telecommunications companies. As an article from 2009 attests to, at the time 4G/LTE was seen to be nothing short of revolutionary in its potential to reduce the need for expensive hardware, make networks easier to manage, while also significantly increasing the speed and quality of data (ultra-broadband access).

Nevertheless, 4G LTE and its accompanying video streaming, sending and receiving of large files of data, and real-time face-to-face communication, is in the process of being surpassed just shy of a decade later by the next generation telecommunications technology — 5G. In comparison with its predecessor, 5G technology promises to drastically increase the amount of data that the average person consumes from virtually anywhere in the world (according to some estimates each person will consume 1.7 Megabytes of data per second, by 2020). According to an article by Jabil, the new 5G networks will be “capable of processing 1000x the mobile data volume,” while also possessing a higher speed (lower latency), “dropping from 50 milliseconds to 1 millisecond”. In short, 5G unlike previous mobile networks, possesses the capability of optimizing existing technology and scaling it to unprecedented levels.

(Source: Huawei Technologies)

Importantly, however, as the Jabil article goes on to detail, 5G has only recently started to become a buzzword in the telecommunications industry, and is not expected to be widely adopted until around 2020. By that time, mobile subscriptions around the globe are predicted “to reach close to 9 billion” total users, while the number of IoT devices connected to one another or a central network, is expected to be closer to 16 billion. ‘Early 5G’ as it has been labelled, will remain intermixed with 4G LTE networks: according to a report by Red Chalk, this more specifically entails “4G networks remaining the foundation, particularly for mobility”, while “5G coverage will be limited to outdoor, pedestrian centric areas where frequencies can easily reach users.” By the mid-2020s however, this interim measure is expected to be surpassed in favor of solely 5G networks. At such a time, a Deloitte study estimates that 5G networks will be able to support “at a minimum, 1 million connected devices per square kilometers.”

The Business Proposition of 5G Networks

In preparation for the coming 5G (r)evolution, enterprises, consultants, and governments have begun to question the business potential of 5G networks, and how they may facilitate new forms of value or productivity. Listed below, are the most important projected impacts of 5G networks on the global economy:

1. Machine Learning and the Industrial Internet of Things:

Accompanying the 4th Industrial Revolution, a number of cutting edge technologies increasingly depend upon mobile networks. 5G Networks, are the core ‘facilitator’ of instantaneous data transmission between machines, in transportation hubs, and among managers and devices. As an example of the speed that 5G networks will be capable of providing, the aforementioned Deloitte study explains how “estimates suggest that 5G could offer maximum theoretical speeds up to 10Gbps; more than 100 times the advertised speed for 4G networks” (2).

In terms of the Industrial Internet of Things, the core value proposition of 5G Networks directly corresponds to the need for real-time data transmission between smart devices, and artificially intelligent machines. By providing a low, stable and predictable latency, 5G networks allow sensors to process and respond to information within 1 millisecond. According to a study by Ericsson, 5G networks can allow for “connectivity and automation on the factory floor, on an unprecedented scale which would transform the manufacturing sector.” By the same logic, M2M (machine to machine) interaction in homes, cities, and elsewhere also stands to be faster, more secure, and more capable of storing and transmitting ever larger amounts of data.

2. Increases in Productivity, Efficiency, and Communications

With better speeds and capabilities of storing and transmitting data, 5G networks are capable of significantly improving business strategies. The largest and perhaps most exciting of such innovations, would be the implementation of wireless cloud offices — whereby large magnitudes of data can be stored, edited, and transmitted on-the-go from anywhere in the world. Equally important is the potential of entirely new business models and on-demand services built upon the foundation of 5G networks. Deloitte, a well-respected consulting agency, predicts that “5G could enable $12.3 trillion of global sales activity by 2035 across multiple industry sectors” due to applications being able to run at “7 times faster response rates and 12 times faster download speeds” than current mobile networks (9). While still difficult to imagine, the increase in data accessibility will allow companies to make decisions and react to unexpected problems in a much faster and controlled manner.

3. Small and Medium Sized Business Growth

Finally, 5G networks also possess the capability of ‘levelling’ the playing field by increasing the business potential and viability of small and medium sized enterprises. In a survey report by Qualcomm, 80% of the respondents expected small businesses to grow, and larger amounts of global competition to be the result of the 5G mobile value chain. Accompanying such predictions, Qualcomm itself estimated that in the next two decades, 5G networks would generate up to $3.5 trillion in revenue while also creating up to 25 million new jobs. Altogether, a paradigm shift in the value of mobile devices, applications, and digital connectivity will be inaugurated through the widespread adoption of 5G mobile networks.