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The day the world’s first commercial 5G services promised a “great leap” is still crystal clear in my memory. I remember two things from that day: I was interviewed on the launch that took place days before the planned launch date “by order,” and the two parties racing to launch were from countries known for sending innovation out into the world. As it happened, the day went down in history without many of the details on how the “great leap” would be achieved. Some people thought 5G would change the world, and that was how most people came to hear about it even though many did not see an immediate need for it. Optimism was high within the telecoms industry, but spectrum and new revenue streams were likely the reasons behind the push for 5G.

Fast forward two years, and the “great leap” is still up in the air seeking a safe landing, with much of the earlier intense anticipation for 5G being met with a dose of reality. It is hard to call it “hype” if going by the same standards used to assess 3G and 4G, but no one can deny the remaining presence of an expectation gap. While we did expect 5G to go global eventually, we did not expect it to have made so much more progress and so fast. It feels like more has been achieved in these past two years than the entire time the industry has been tinkering with 4G. The expectation gap with 5G is not as big as it used to be with 3G and 4G. People are slowly finding a need for 5G, and lower per-Gb pricing is just one example.

It is still about need and timing

Industries underwent necessary changes due to COVID-19, and 5G was part of the solution. However, to say that COVID-19 expedited 5G in totality is not entirely true. 5G development in certain areas (e.g., new rollouts) and standards development were impacted by COVID-19, and only some verticals (e.g., healthcare) have benefited immediately from 5G, although change is on the horizon for many other verticals. It seems COVID-19 has made the justification for 5G, where there was one, stronger. For example, 5G was on track pre-COVID-19 to solve the lack of staff, regardless of whether it was due to qualification, location or cost, with automation. With COVID-19, necessity was added to the list—as a shift to robotics, contactless and online was triggered to avoid close contact—and the timeline was brought forward.

Complementary to 4G, 5G has every chance of succeeding

5G, which is software-based and potentially open-source and cloud-based, offers flexibility with less complexity at more attractive per-Gb price points. OSS/BSS for 5G has finally caught up to remove bottlenecks in rolling out innovation and new business models and enable the necessary charging and billing functionality to aid in 5G monetization. The potential to enable new industries that have no legacy is tremendous. The latest release allows for the creation of more value-added solutions, which can drive economic growth. When this happens, the technology adoption gap between developed and developing countries, and the corresponding per capita income gap, will narrow. This is the outcome sought by local governments. As a complement to 4G, 5G fits nicely to power real-time and mission-critical solutions, especially from the cloud. For example, the Guangzhou 5G Smart Transportation City implementation powered by ZTE, China Mobile, the Guangzhou Municipal Transportation Bureau and several other companies now benefits over 20 million people, various vertical industry players and local government agencies in Guangzhou City, China.

If 5G is so great, what is slowing it down?

Everyone has to start somewhere. Some succeed, and some fail. In a long journey, it is only a failure if we do not get it right before we reach the end. It will be a long journey with 5G. We have not yet succeeded. We face a supply and demand gap and a host of execution challenges, but there is still time for the industry to get it right. On the supply side, we have overzealous techies that are good at facilitating and enabling everything. Their top reasons for the slow progress with 5G are the lack of spectrum and the delay due to the never-ending evolution of standards. The chances are high that either 6G will extend backward or better 5G sequels such as 5G Advanced, 5.5G, 5.75G or 5.90G will be introduced. I wonder if it is plausible for 5G to take off faster if we could focus all available spectrum in the world on 5G while continuing to make it better.

In my opinion, technology is only not good enough and spectrum is only not enough if one is unclear about what one is trying to achieve. Some businesses have solved needs with the most basic technology (e.g., Rainforest Connection), and there are telco groups (e.g., Telenor) that can do better on connectivity with less spectrum than competitors. Within other verticals, there are companies doing well with designs that show an understanding of future mobility needs (e.g., Volkswagen). What is needed is a greater understanding of the current state of digitizing, digital transformation and commercial considerations—understanding that purging legacy technology to make way for new technology is never an easy sell. Business cases must consider the risks associated with high, one-time capital expenditure. Assuming costs are lowered with 5G, there are also regulations, people and process considerations. The idea of saving human lives as a justification for 5G (e.g., mining in China) can help sway the decision, but long-term change is driven by regulation and not businesses volunteering to address human rights.

While the telecoms industry is now more realistic with the use of technology and is applying it where needed (e.g., Globe’s early implementation of FWA in 2019), 5G requires expertise in other verticals to understand where best to apply 5G. The business cases for 5G are either too complex or too simple. The telcos now face a dilemma. They need to decide where to focus, where to develop expertise and where to be a connectivity provider. Some say telcos are having an identity crisis. While there is some truth in that, there are also signs of desperation as cloud providers and third-party private network providers encroach on the 5G pie. While they are not known for their expertise in creating solutions, the large players, like Singtel and Telekom Malaysia, do have the opportunity to sell the solutions to enterprises they already serve. Telcos need to see if they can get a clear value proposition and enterprise strategy and, from there, figure out how they will scale. Telcos can no longer just sell to businesses that will buy—strategy matters.

The next stage of growth requires different skill sets

I think we are on the right path with 5G thanks to the dreamers, innovators, makers and doers of the world. I particularly would like to applaud Huawei for its Blade AAU and Openet for its Evolved Charging Suite 8.0. A good plan can become a great plan with a few tweaks, and it is time for the visionaries, strategists, disruptors and orchestrators to step forward and take on the task of sending this good work out into the world. The future with 5G is unfolding within a rapidly redefining world. The next stage will be bigger and broader, and it will need different skill sets to succeed. It is time for us to re-evaluate our 5G strategies to get it right. It is good that local governments support 5G. It would be ideal if Asia’s economies can benefit from a plan (“Make Asia Great”) and a roadmap to leverage 5G because when the “great leap” lands on progress, we can all appreciate the race to launch 5G that we won.

To read more articles by Mei Lee Quah, visit https://frost.ly/67r

About Quah Mei Lee

Quah Mei LeeQuah Mei Lee is an Associate Director with Frost & Sullivan’s ICT practice where she leads Mobile & Wireless Research for Asia-Pacific. Her area of expertise lies in telecoms and payments strategy with a specific interest in 5G and payments.

Quah Mei LeeQuah Mei Lee

Quah Mei Lee is an Associate Director with Frost & Sullivan’s ICT practice where she leads Mobile & Wireless Research for Asia-Pacific. Her area of expertise lies in telecoms and payments strategy with a specific interest in 5G and payments.

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