3 Apr 2020
EUR 400 million
Even those who find themselves skimming over the telecommunications reports in the business pages will know by now that not only is 5G coming, it’s practically here.
By Mr Tommi Uitto, President of Mobile Networks, Nokia
The latest generation of mobile network technology, developed as the next-step from the already superb 4G, has been picking up pace over the last few years. Operators and businesses in the Nordic and Baltic regions have been running trials and developing their services for years, and 2019 will see users feel its benefit for the first time.
Though it follows from 4G in naming convention – the technology itself goes much farther than the previous generation. Without being too technical, 4G was about building a better network and 5G is about enabling new business uses. It covers the penetration of network access, speed, latency, quality of service, availability of signal and more.
Where the value will come from
For network operators and service providers, the opportunity to add to the bottom line with 5G technology comes through helping other industries such as automotive and manufacturing transform. For those industries the potential value is seen through efficiency and new ways of creating and delivering services (autonomous vehicles are the classic example now). For consumers, who can deny the attractiveness of improved coverage and low latency for multi-player augmented and virtual reality gaming experiences?
We expect to see operators rolling out commercial offerings in 2019 or early 2020, and we can also say what market watchers can look out for. Recent research we undertook tells us that at a global level, the top three reasons operators will invest in executing on a 5G strategy were to improve customer experience; to provide the flexibility to support new revenue streams; and to increase revenues from enterprise and IoT.
In Europe specifically, Nokia sees near-term opportunities and interest from operators in industrial automation and smart grids to improve productivity and increase energy efficiency. Services based on more advanced applications like ultra-low latency communications such as drone-based emergency services and intelligent transportation solutions are being considered by less than 20% of operators in the research study at the moment – but these are still some of the most exciting opportunities for the new technology and will be the most recognisable as the next step in what we know.
5G in action already
In this region, we already have operators and businesses using 5G. In fact, the Nordic and Baltic regions have been among the first countries to do 5G roll-outs, pilots and trials besides the US, Korea, Japan, China, Australia and Middle East. The region has also been the site of many world first innovations, carrying on an admirable tradition of breaking new ground in telecommunications. Nokia itself has worked with partners to advance this technology, and in recent months was able to announce the introduction with Elisa of energy efficient liquid cooled base stations, the installation of cloud-native core technology in Telenor Group’s network in Denmark, Sweden and Norway to drive agility as the company prepares for 5G rollout (alongside extensive testing in Denmark), and the worlds first deployment of 5G in an industrial environment in Oulu together with Telia.
Across the region, operators and enterprises are building capability to realize new applications and services. Telia has launched 5G networks already in Finland, Sweden and Estonia as well as introducing a 5G robot to Helsinki airport. Elisa is also deploying this technology and has launched 5G networks in Finland and Estonia. ice Norway is also well on its way to a 5G network launch. LMT in Latvia and Tele2 in Lithuania and Estonia are also working on this with extremely promising results from testing and trials. With the 4th Industrial revolution underway, many manufacturing and engineering firms are taking the development of dedicated networks further, with companies like Sandvik developing ideas to harness the new connectivity power of 5G for the Industrial internet of things plus automation and control of systems even in harsh environments like the mining industry.
The technology represents an opportunity without precedent to transform many business sectors – adding not only to efficiency and productivity but delivering material improvement to revenue figures. However, no matter how excited we may get about it, it’s worth bearing some realities in mind. While operators and private companies will develop the technologies, this will not be an overnight change.
Widespread 5G rollouts will depend on more than just network technology. Key considerations such as the availability of radio spectrum (the radio frequencies set aside for a 5G network need to be allocated by individual governments and without this, operators and businesses are limited in what they can offer commercially) and ensuring the security of networks will also need to be satisfactorily concluded before 5G comes to the masses.
It will not be long, however. The years 2019 and 2020 will see the commercial introduction of 5G. The real return for those investing in the network and new business capabilities now will come over the next 5-10 years in this region. Earlier investments in 4G and other systems will continue to be developed, ensuring not only continuity, but also maximised opportunity from the infrastructure we have in place before we collectively and gradually move to the next step.
5G is not an investment made purely for commercial reasons within the telecom sector, it will have a profoundly positive impact on society too. Increased bandwidth, more capacity for consumers, higher reliability, and low latency for enterprises will create new business models and provide massive opportunities to improve the business operations across all sectors from retail and travel to healthcare and manufacturing. 5G is not only a game changer, it’s a nation changer. One, as we have seen, the Baltic and Nordic regions are very well placed to take advantage of.
Did you find the article interesting? Subscribe to our newsletter on the bottom of this page for similar stories.