What is 5G ? An Australian View Of A Global Technology

A quick summary of 5G technology and what it means to you

  • 5G is the 5th generation of mobile technology, due for delivery in Australia around 2020, although standards are still being agreed.
  • To users, it will represent a number of advantages, the biggest of which is incredible data bandwidth, more than 50 times what 4G offers .
  • 5G data is likely to make you feel like you have ‘unlimited bandwidth’ and immediate download of everything you want. For example, downloading a full 8GB High Definition movie to your phone could take less than 10 seconds.
  • Other advantages include lower power consumption. That’s is important both for the batteries in the many millions of Internet Of Things products and the daily life of the screen on your own phone.
  • 5G could underpin driverless cars and incredible levels of digital personalization. It will increase competition from overseas workers who, through the use of the technology, will appear more than ever to be part of a local team.
  • But 5G is a huge cost to the phone companies, incurred at a time when their revenues are being taken by Over The Top players. Could it cause consolidation in the telco market ?

Introducing 5G in Australia

5G is the 5th Generation of communications technology offered by the GSMA (the GSM Association). GSM is the Global System for Mobile Telecommunication – it’s the set of standards put in place to ‘agree’ how phones ‘talk’ to phone companies and how phone companies ‘talk’ to each other. The GSMA is how all of those moving part, bodies, manufacturers and companies fit together.

In essence, to you, 5G just means faster data transfer from the wireless network you use (e.g. Vodafone) to your phone. See below for just how fast that will be. It’s likely that users will experience apparently ‘limitless bandwidth.’ Imagine that everything you want to download comes to your phone straight away. You want your entire music catalogue on your handset – done. Want to watch a film. The whole thing is there immediately.

This evolution of mobile communications technology has been happening for the last 20 years. You might be familiar with terms like 4G / LTE which we have gone to some lengths to explain on our site. The predecessor to 4G, 3G, arrived in Australia around 2005 and manifested in several forms, one of which the ‘Next G’ network for Telstra users, you might remember. They spent a lot of time marketing it.

Before 3G was 2G, GPRS (General Packet Radio System) with it’s much hyped and never delivered ‘WAP’ revenues. Prior to that (although it wasn’t called this at the time came ‘1G’), simple GSM.

These generations represent global agreements which is why you can set off with your phone in Australia and it’ll still work in almost any country. The body responsible for coordinating parties to agree the standards is the GSMA.

A lot has happened since GSM started. BlackBerry mobilized the internet using GPRS providing email wherever you are and even very rudimentary web browsing. The iPhone used 3G’s faster data speeds to enable web browsing. Basic video, albeit often low resolution also arrived with 3G. The ‘Three’ network in the UK and over here launched telling us we would all use 3G for video calling. Now we take watching video for granted on 4G phones. Maps are standard today and we expect them to load fast.

Companies like Optus and OVO Mobile are increasingly using the technology to differentiate themselves in a largely homogenous market. When everyone has the same standards and the same phones, differentiation is hard on technology but content can make you stand out.

5G will underpin the next level of data and internet services that will be brought to Australia. Simultaneously, it will support an Internet of Things, cars and wearables connected to the internet. 21bn devices will be connected in the next 4 years say Gartner.

Australia is one of the world’s fastest adopters of technology. We can expect phones to start to support the facility before then. Rollouts of new networks tend to begin in city areas, where the population is most densely inhabited. The phone companies have learned from their experience with 4G. Changing over to 5G has already been considered.

If history is anything to go by, Vodafone stand to win big with their 5G deployment. As a global organization, they have more than 35 phone companies around the world which need to move to 5G. They tend to start fast, rolling out quickly in one territory and take the lessons they’ve learned to other countries around the world. They have the international muscle to influence the GSMA and they have the operating companies to practice on. History suggests that Vodafone might build the best network quickest.

What is the state of 5G in Australia now ?

Not a lot has been said about 5G in Australia. Around the world, however, the work required to set the standards for 5G networks is still being developed. In the UK and USA trial schemes are underway. Verizon in the US is notably dipping its toes in the 5G pool, experimenting. Phone manufacturers too are engaging with the GSMA to get their side right. The South Koran government are spending more than $1bn and want a trial in place, at least in part to support their national manufacturer, Samsung.

5G in Australia – how will the customer experience work ?

  • Unlimited capacity :
    The best way to demonstrate the speeds most consumers will need is using video. Video files are the biggest files most people need. With 5G, an 8GB High Def movie will comes down to your phone in 10 seconds compared to over an hour on 4G. You won’t be doing this all the time though. There will be a smaller number of times that you and someone else are requesting something on the network at the same time. The result is likely to be the perception of unlimited download speeds. Web pages, currently constrained by 4G networks will get heavier and have more functionality built in. We will have richer experiences on mobile as just one of the many changes we will see.
  • Preferences in the clouds :
    We lead increasingly digital lives. We leave digital fingerprints and trails wherever we go. We have digital browsing histories, bookmarks, address details and cookies. We have histories of previously clicked links and searched term lists. Imagine that whenever you get in a car everything about your history and preferences is downloaded instantly and used to personalize your experience. Your favorite TV shows are all there for you to watch. If there is going to be an accident, say the car has started slipping on ice – the car will sense it’s slipping and, usie the speed of 5G to notified the vehicle in front before the incident occurs. This might seem incredible to you but millisecond switching already takes place to move you from one cell tower to another as you drive down the motorway and you don’t even notice
  • Zero latency :
    Latency is the time taken to send a data packet as part of a transfer. At the moment, that takes a seemly trivial 50 ms but 5G will drop that down to 0 ms. The effect could be substantial when you consider the cumulative number of connections your phone makes each hour, day or year.

And the target to deliver all of this is only 2020 in Australia.

5G – Uses and use cases.

How real customers will experience and use 5G.

  • Video calling:
    We will use 5G for what we know : Video calling / Facetime. 5G might include facilities to allocate and prioritize traffic over the network to improve services. Facilities like speech and face to face meetings benefit from allocated bandwidth because conversation suffers noticibly if a delay is introduced.
  • Facebook:
    We mention Facebook in this context because what they are proposing is significant in terms of the bandwidth they might use. Facebook are betting big on things like Artificial Realty, one of those applications which it’s hard to anticipate bandwith requirements for. But at some point, Facebook will release an artificial reality social network.
  • Working:
    Telecommuting and video conferencing will be possible in a way that’s hard to imagine now. It’ll be easy to set up a facility to talk about work in a group conversation, seeing other’s work or face on the screen, like they are in the room next to you. There are good bits and bad bits to this. As we move to a ‘Gig economy’ we are likely to enjoy facilities like this which allow us to team better. It does, however, simultaneously, open Australians up to competition from millions (billions ?) of trained individuals overseas who also have 5G and can now compete to replace us in those quickly cobbled together teams.
  • Connected devices:
    The IoT stands to benefit from super low power drain from 5G networks. Some are targeting up to 10 years for devices between charges. When long battery lives are combined with the eSIM the result could lead to an asset being in the field for many years, switching providers.

5G technology – how will it work ?

Those who understand the technology that will be used in the ongoing operation of 5G networks say the international standard will offer a ‘superfast, green and soft’ solution. The energy usage of the new network will be materially decreased compared to previous versions, to allow the sea of connected IoT devices to access it. Obviously that has environmental as well as battery ramifications. Like many things these days, management and optimization will be done using software which is why they describe 5G as soft.

5G will also affect the quality of the calls you make. VoLTE lead to the replacement of the existing alternative. At the moment, there is a nearly entirely separate digital network used to transmit your voice signal (as opposed to the data you need) With 5G, at some point, the old voice transmission network will be turned off and the only way to talk will be over VoLTE. This is likely to invalidate a lot of handsets so it might be a while before such a theoretical facility is deployed.

Finally, 5G technology could change the skyline. 5G protocols and hardware are, as we say, still being defined. One hardware solution could involve smaller antennae or a solution which, at the moment, seems weird: One antenna to ‘fish’ for the signal of a phone wanting to make a calls with another taking the call over when it’s been found for the bulk of the communication. Depending on the standards which are approved, this sort of approach could improve coverage.

5G Commercials – making money out of 5G

Who’d be a telco ? Phone companies like Optus, Telstra and Vodafone are just like the private equity companies which build roads. They spend a fortune on the infrastructure and then charge everyone a little bit, each time they use it, to go on a trip or to make a call. The thing about being a phone company is that they have to rip the road up and rebuild it much better every 10 years.

The value in telco is rolling up to the OTT (Over The Top) players. The WhatsApps, the Facebooks, the You Tubes etc. are the people making the money out of customers’ mobile network use. The incredible cost of another network rollout may lead to some rationalization in the network investments being undertaken. It could even cause the aggregation of some phone companies. It costs $bns to deploy 5G. One argument we’ve made before is that potentially, the best thing to do for competition in Australia, is to close down the 3 competing networks and build one which is then resold by all of them.

The consolidation of networks remove the cost of the network and focus the phone companies where they should be – on the pricing of their service and the customer service they offer rather than building, maintaining, improving and charging us all for the privilege of using their networks.

And it’s not just the hardware, software and services which have to be paid for and rolled out by the phone companies. They also have frequency spectrum to pay for which is auctioned by the government and costs billions. In the UK, everyone got a penny tax cut because the phone companies paid for all the bandwidth they needed when 3G spectrums were sold.

Summing up 5G and its impacts

It’s sometimes hard to know how new technologies will reveal themselves in our lives. 3G was touted as a brave new world which would lead to us all video calling each other. The suggestion, I remember clearly, when I was at Vodafone in the UK was that we would all be watching streamed Sky News on our phones when 3G data speeds launched. It happened, slowly, you might expect a very small number of people to do that now. But the future they touted never really materialized in the way we’d hoped at launch. For example, I’ve personally never watched Sky News on my phone.

5G standards should be agreed by 2018. At it won’t all be good news. 5G may render previously functional, older handsets unusable. The speeds they promise us with a new ‘G’ don’t always materialize either. Look at 4G. With multiple handsets attached to a tower / network at one time, the service slows noticeably. The same is likely to be true for 5G. The download speeds the industry claim are almost always laboratory speeds which real users in the real world won’t get. That said, 5G could be so fast that, for the applications we use now, we could experience in every practical sense the limitless bandwidth they propose. It will be other, more data intensive applications, those we don’t use yet because they haven’t been invented, that will cause the problems.

Pricing comes from value and, to most people, what’s valuable is what’s scarce. But how do you charge someone for a service which is not being competed for? At any one time, the proportion of the available 5G bandwidth being used is going to be tiny. Explaining that to people is going to be tough.

Often, the question is about technical vs cultural adoption as in the case of the video calling and sky sports for 3G. How will Australians react to such a revolutionary step forward ? Will they see a need ?

Such an array of hardware and software connecting everything is going to require better data management. There is an opportunity for those who work outside telco to act. Telco billing systems are already old and clunky – up to a quarter century in some cases. Data management facilities, when you can analyze behaviors, usage patterns, predict faults and personalize network services will be valuable to the networks. To me, the most interesting aspect of 5G is the personalization that it will enable. It’s the generation of all this data which seems set to influence our lives the most. Companies using what they know about you to provide the best services possible.

And finally, 5G probably won’t be the last G. Seeing what 6G might look like is like going beyond the singularity. It’s as impossible to guess now, in the same way that judging a world of infinite bandwidth of 5G would be possible as the 3G networks were deployed.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.