5G as a catalyst for socioeconomic growth

August 02, 2021 | 15:16
5G is a platform for innovation, and because of its socioeconomic multiplier effect, it will serve as the critical infrastructure that will spur Vietnam’s Industry 4.0 and digital transformation initiatives.
By Denis Brunetti President of Vietnam, Myanmar, Cambodia and Laos, Ericsson
Denis Brunetti President of Vietnam, Myanmar, Cambodia and Laos, Ericsson

While 5G services today mainly address consumer use cases like enhanced mobile broadband, 5G network capabilities go far beyond previous generations of mobile communications with higher capacity, lower latency, and high reliability and security.

Ericsson predicts that by 2026, 5G networks will carry more than half of the world’s mobile data traffic. Enhanced broadband will be a way for service providers to manage cost and quality for end-users, and this is in line with what consumers want. More than 70 per cent of consumers expect 5G to provide better performance such as faster speed, better reliability, and lower latency, according to an Ericsson Consumer Lab study. That will enable consumer offerings around gaming, video, and AR/VR.

There are more than 160 5G live networks globally today with more than 800 5G devices commercially available. Ericsson today powers 93 live 5G networks in 45 countries, with 143 commercial 5G agreements signed. 5G subscriber uptake is gaining momentum, and we foresee 5G will cover 25 per cent of the world’s population by end of this year.

Gamechanger for consumers

5G in the initial stage of introduction will help communication service providers manage the growing data needs of consumers more efficiently. Since the first 5G network launched in April 2019, 53 per cent of traffic in South Korea is carried over the 5G network today.

The monthly average data consumption per 5G subscriber in South Korea is 26.3GB, over 2.9 times bigger than that of 4G subscribers at 9GB. Thus, the initial payback for 5G to telecom service providers is a lower cost to address traffic growth. According to Ericsson’s economic study of enhanced mobile broadband, evolution to 5G will enable 10 times lower cost per gigabyte than 4G.

Ericsson’s Harnessing the 5G Consumer Potential report notes that service providers globally could generate up to $131 billion by 2030 from digital service revenues by proactively bundling and marketing 5G use cases such as enhanced video, AR/VR, and cloud gaming.

For some, fixed wireless access will be a key growth opportunity to address a new market or underserved customers. We have also carried out an economic study of fixed wireless access, and investment payback time is less than two years when connecting underserved suburb households using the existing mobile wireless network. Fixed wireless access has started in North America, but we also see it gaining momentum in other parts of the world. Industry digitalisation is happening across all segments, and private networks and enterprise networking services are examples of areas already leveraging cellular and 5G technologies.

We will likely find the most transformative use cases in critical Internet of Things (IoT) infrastructure where the speed, latency, and security of the 5G network will be key. Here we can see 5G’s potential to transform industries and society at large – with use cases such as smart manufacturing, smart cities, self-driving cars, and advanced healthcare applications to name a few. We foresee 5G will continue to gain great momentum over the next few years, led by North America, where 84 per cent of mobile subscriptions will be on 5G by 2026 – while 5G penetration will be more than 50 per cent in Northeast Asia, the Gulf countries, and western Europe by 2026. According to the June edition of the Ericsson

Mobility Report, mobile subscriptions in Southeast Asia and Oceania have now exceeded 1.1 billion, with 5G subscriptions being just below the two million mark. 5G subscriptions are expected to grow strongly over the next few years with a forecast total of about 400 million by 2026.

5G for enterprises

5G opens up opportunities for service providers beyond consumers to explore new revenue streams. Healthcare, manufacturing, automotives, and the energy/utility sectors represent the largest value pools for services created or enhanced by 5G.

In fact, there are many implementations already carried out today around the world. This covers various segments which include manufacturing, ports and airports, energy, mining, and oil and gas. As an example from the mining segment, Telia in Sweden will build and manage a dedicated local 5G-ready mobile network for mining company

Boliden at Aitik, the world’s most efficient open-pit copper mine located in the north of Sweden. As for ports, and as an example in the UK, BT is providing wireless connectivity for Belfast harbour. In the manufacturing segment, Telefónica, Ericsson, and Mercedes-Benz are building the world’s first 5G mobile network for automobile production in Germany. This factory, called Factory 56, will be the blueprint for all future vehicle assembly facilities around the world.

Mercedes-Benz wanted a flexible and high performance, and connected infrastructure to replace their traditional assembly line with automated driverless transport systems. So, the company selected a private commercial 5G network. The expected results from the factory include optimised existing production processes through data linking or product tracking on the assembly line; keeping sensitive production data on the premises; and improving end-to-end networking across the entire value-added chain – from development and design to suppliers and customers.

These and numerous existing and future 5G use-cases can potentially bring a paradigm shift across enterprises helping them become more efficient and future-ready as well as sustainable. The possibilities that IoT, 4G, and 5G create for enterprises will not only put enterprises on a fast track to meet the demands of the new world but, more importantly, contribute to the socioeconomic development of Vietnam.

By Denis Brunetti

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