Launched in 2019, 5G is poised to be a major disruptor
5G is the topic on everyone’s minds. It is poised to become an unprecedented driver of innovation in both industry and services, promising to deliver a jump in performance and usher in a host of new applications. We saw a host of rollouts on every continent in 2019.
Technological disruption, a sovereignty issue, 5G began to take off in 2018
A major industrial game-changer, 5G is the centrepiece of a great many debates, not only technological but also economic, industrial, geopolitical, societal and environmental ones.
Finnish operator Elisa was the first to switch on its 5G network, back in June 2018. Operators in North America were next with mobile and fixed wireless 5G services. South Korea’s three operators introduced their 5G services in late December 2018, initially to business customers, and then to consumers in April 2019. In the second half of 2019, European operators began rolling out their 5G mobile services, with the UK becoming the first fully 5G nation in August. And European operators that did not introduce 5G services in 2019 are also expected to do so this year, to meet the targets set by the European Commission’s 5G Action Plan. IDATE DigiWorld expects to see 1.7 billion 5G SIM cards registered at the end of 2025, of which more than 60% in Asia due to the sheer size of the Chinese and Indian populations.
5G connections will increase significantly by 2025
Growing number of 5G launches in 2019
5G service launches worldwide
New players arriving and new value chains being forged
5G will no doubt disrupt the mobile telephone industry’s value chain. The savoir-faire and expertise that veteran telcos are already applying to 4G will be vital for 5G, which remains a cellular technology. But 5G also has a range of entirely new technical properties that players along the value chain will embrace, to innovate and create new services and resulting applications. It will also pave the way for a new ecosystem with new use cases that will make use of AI, IoT, virtual and augmented reality.
Germany’s regulator has set aside frequencies for manufacturers’ future factory initiatives, and France is gearing up to do the same.
There is no shortage of uncertainties weighing on veteran telcos, including the need to share the revenue that will result from the value chain’s destruction and the advent of new players.
5G ushering new players onto the value chain
Traditional and 5G value chains
5G spectrum allocations in Europe lagging behind
Radio spectrum is a scarce and precious resource, and the exploding demand for mobile data requires 5G to employ it as fairly and efficiently as possible. 5G spectrum allocation procedures have been taking place in Europe and the rest of the world in recent months. But, compared to the United States and South Korea, spectrum awards for all of the bands identified for 5G are slow in coming. It is in the centimetre and millimetre wave bands above 15 GHz that awards are lagging the most, and Italy was the only EU Member State to have allocated 26 GHz band spectrum at the start of 2020. Several European countries have awarded mid-band spectrum for 5G. But some major mobile markets have yet to begin the process, which will naturally impede the development of 5G, aggravate the region’s lateness in launching services and have an impact on the entire regional and national industry.
The US and South Korea have the jump on spectrum awards
Spectrum awards worldwide by frequency band
Rakuten Mobile, from MVNO to virtual 5G operator
Between 2014 and 2018, Rakuten Mobile forged itself a place as a low-cost MVNO, a financially appealing alternative to Japan’s three incumbent mobile operators. At the start of 2018, Japan’s telecoms regulator (Ministry of Industrial Affairs and Communication) awarded Rakuten 4G frequencies, officially making it the country’s fourth mobile operator, with an entire network to build from scratch. The company announced that it wanted to complete construction by October 2019, i.e. within 18 months having obtained mobile frequencies, and to make it a 4G network that was ready for entirely virtualised and cloud native 5G. This fully virtualised, programmable and automated infrastructure should enable the company to generate substantial savings, increase capacity and make the transition to 5G with ease. A process that should be able to be achieved with a simple update.