Excitement generated by the arrival of 5G technology is as intense as any since the original spectrum auctions that gave birth to the digital wireless industry three decades ago. While natural to ask about unrealistic expectations, such questions about 5G’s impact miss the point. We typically view new technology developments in the context of the current state of the art, but instead, should imagine the unintended consequences.
Simply considering 5G’s development as a linear evolution of wireless infrastructure, we may not see the potential that will actually be unleashed by the increase in bandwidth, accessibility, and computing power made possible by 5G as well as the intelligence it creates within the network. In this context, it is important to not just understand how 5G changes the direct consumer experience, but how it introduces inanimate objects as active users of wireless infrastructure.
At J.D. Power, we are tracking the rise of multiple opportunities associated with this latest technology metamorphosis.
4G as prologue to 5G
It is first useful to review quickly how 4G – and the concept of Long Term Evolution (LTE) – changed the wireless landscape for consumers and the industry as a whole.
The 4G evolution (long term or otherwise) did far more than simply advance the quality and integrity of wireless communications. The ability to deliver high-capacity data services did not just improve talking and texting, a capability already incorporated in the 3G world; it created a mobile, seamless, and ubiquitous platform that made the app economy possible. It introduced an entirely new way for consumers to access an array of new unanticipated services that changed the user experience and created new industries – and diminished others. It changed not only how consumers communicate, but how they initiate and maintain relationships, entertain themselves, and get from point-A-to-point-B with just a few swipes of the screen in an efficient and totally cashless manner.
The rise of innovative mobile-focused startups would not have been possible without the emergence of 4G LTE. Consider streaming video and taxi medallions. Could anyone pinpoint how the rise of 4G LTE contributed to exponential growth in online video, while simultaneously leading to the devastating devaluation of the New York City taxi medallion and local equivalents around the world? Such unforeseen second order effects are what make the rise of 5G so exciting, and at the same time, disruptive to the point of driving corporate anxiety.
Anticipating the unintended consequences of 5G
As 5G infrastructure builds out, quality of services already enjoyed will improve and innovative areas of economic activity will get a shot in the arm. Fundamental relationships consumers have with the content they love, the devices they depend on, and the people and organizations with whom they interact will change.
Let’s start with how consumer relationships with network service providers (NSPs) might evolve as the result of 5G.
Currently, the NSP community consists of three basic (and ever-converging) groups – cable companies, telecom providers, and satellite operators – all engaged in a pitched battle for consumers who are already changing the way they access services.
Quality of home content services has increased substantially over the past decade or so, yet traditional NSPs have been losing video subscribers to over-the-top (OTT) disruptors like Netflix at an alarming rate. OTT providers have been riding over the cable, fiber, and wireless infrastructures of NSPs with little to no capital investment to deliver high-quality services wherever and whenever consumers want.
The rise of 5G may help reverse this trend for NSPs, if they redefine their relationships with consumers. As new bandwidth-intensive services such as high-quality gaming and 4K (and later 8K) video emerge, there are at least three important consequences:
● More complexity to manage
● Less tolerance for service interruptions
● A nearly endless need of wireline broadband pipe connecting the 5G wireless infrastructure to the rest of the network
With 5G, NSPs can better manage these in-home and on-the-go experiences, elevating their relationship with subscribers in new and important ways as well as provide the crucial “middle pipe” link from device to source. In a recent celebration of its partners at Mobile World Congress LA, Verizon Business CEO Tami Erwin said her firm currently lays some 1,400 route miles of fiber each month in preparation for the 5G future, the largest scale construction project in the country.
5G as an internet of things enabler
The rise of in-home internet of things (IoT) services is creating compelling demand for a new generation of services enabled by 5G. Across numerous industries, 5G will lead to faster decision-making and real-time multi-vector monitoring. Service providers will be able to manage greater complexity associated with the interaction of discrete devices in an integrated manner to deliver new value propositions. In healthcare, services and products will depend on high-quality, highly secure networks to carry an unending stream of telemetry communication about patients. Manufacturing and logistics companies will have greater control over critical elements of their operations at a far more granular level. As their workforces age, utility companies and government agencies will be able to provide more efficient services with fewer people. The list goes on. The result will be the rise of new social, community, and healthcare services, but also a challenge to incumbent providers of such services to grow their product portfolio.
Despite some Chicken Little-like admonitions, firms should know the sky is intact and will remain so. At the same time, virtually all parts of the way we live and work will feel the 5G touch. The needle on consumer expectations will move for most, if not all, organizations. The winners in the 5G world are already doing the virtuous work to consider the unintended and potentially disruptive consequences on that crucial measure before their arrival.
Ian Greenblatt leads J.D. Power’s Technology, Media and Telecommunications Intelligence, including a new IoT sub-practice, and drives market strategy across the rapidly converging landscape, which encompasses the entire communication sector. You can reach him by email at [email protected] and follow him on Twitter at @GreenblattTMT.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.