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5G Will Unlock Industry 4.0

With network speed which are 10 to 100 times faster than 4G, robots can be controlled, monitored and reconfigured remotely
Börje Ekholm, Presidentand CEO, Ericsson | Print Edition: August 23, 2020
5G Will Unlock Industry 4.0
Illustration by Raj Verma

Mobile technology is one of the fastest-scaling technologies the world has ever seen. There are already 9 billion devices globally and that number is growing fast. It is also one of the greatest drivers of economic growth and human equality in history. In research with Imperial College London, we proved that the deployment of mobile broadband networks spurs economic development. The results show, on an average, that a 10 per cent increase in mobile broadband adoption ratio leads to a 0.8 per cent increase in gross domestic product.

Connectivity has also proven to be even more critical since the Covid-19 pandemic gathered speed. At Ericsson, more than 85 per cent of employees have been working from home since early March.

Mobile technology is a platform for innovation

We often get excited about mobile technology and its evolution from 1G to 5G. But actually, the highest value and benefits came from the applications that mobile technology enables. Initially it was voice. With 4G, it drove the app economy. The most value was captured by applications that run on a 4G network, such as e-commerce, social media sites and music or video streaming. We did not foresee the value of these applications when 4G was launched a decade ago.

There was also another clear outcome. The two countries that launched 4G first - China and the United States - took a commanding lead in developing platform companies on top of the 4G network. Actually, the most successful platform companies grew quickly to become worth many times more than the network operators providing connectivity. This is not strange as mobile technology quickly gives first-movers massive scale by enabling global roll-out. Today, most applications are developed mobile-first.

We believe 5G will be the platform for enterprise applications in addition to consumer apps. 5G will unlock the potential of the Fourth Industrial Revolution - Industry 4.0 - and be the foundation on which a country's relative competitiveness is built. 5G will be the greatest open innovation platform we have seen.

2.8 billion 5G subscriptions by 2025

In the latest edition of the Ericsson Mobility Report, the total mobile data traffic is projected to grow by a factor close to five to reach 164 Exabyte (EB) per month in 2025, consumed by more than 6 billion people using a multitude of devices.

The Covid-19 pandemic has resulted in 5G subscription growth slowing in some markets. However, this is outweighed by other markets where it is accelerating. Overall, 5G is currently scaling faster than previous technologies. We forecast 190 million 5G subscriptions globally by the end of 2020 and 2.8 billion by the end of 2025. We expect that 45 per cent of total mobile data traffic will be carried by 5G networks by the end of 2025.

I caution against looking for a killer app for 5G. By the time we identify the killer app, it will be too late. Investments in 4G were delayed as many people looked for the killer 4G app. They fell behind as the early movers created an ecosystem for innovation that entrepreneurs and start-ups could innovate on to build the app economy.

Early movers in deploying new generations of mobile technology have historically been rewarded through higher growth. We are already seeing early signs of service providers monetising the 5G opportunity, with positive average revenues per user (ARPU) trends and growing revenues, in pioneering 5G markets. Put simply, the next three years will determine the 5G business landscape.

5G as the platform for innovation

Honestly, if we knew the killer app for 5G, we would be making that instead of network technology. However, we can make some guesses. For consumers, exciting use cases will include immersive entertainment based on virtual reality or augmented reality, to different kinds of gaming - such as cloud-gaming or multiplayer gaming - and 3D-shopping. Or maybe using haptic gloves to feel the quality of fabric for 4D-shopping.

As with most past crises, the pandemic will accelerate ongoing structural changes. The adoption of e-commerce will most likely go faster, as will greater flexibility in remote working. But I am convinced that other areas, such as remote health care, where we are just at the beginning of a disruption, will also benefit. Connectivity can, for example, provide quality health care to remote villages with much higher efficiency. Traditional business processes will be re-engineered based on intuitive human-machine interactivity and realised through real-time and secure platforms.

5G for enterprises

We believe that industry digitalisation will generate an estimated $700 billion addressable market opportunity for service providers by 2030, corresponding to 35 per cent of current industry revenues.

In the 5G era, production systems and machines will network, operate and transfer large amounts of data in milliseconds on secure 5G networks. Connected cameras and sensing devices can provide feedback to remotely situated control centres and enable skilled staff to monitor and steer manufacturing remotely. With a large network of sensors, manufacturers can enable predictive maintenance of robots on the factory floor. For robots to be able to interact with their environment in real-time, massive amounts of information will have to be transferred instantly.

With an enhanced network speed that is 10 to 100 times faster than 4G and latency of one-to-two milliseconds, robots can be controlled, monitored and reconfigured remotely. Connected automated guided vehicles can dispatch components from warehouses to production lines.

5G and society

We believe it is critical for a country to be an early mover in 5G technology. The early movers will, as with 4G, capture applications running on top of the network that, from the start, can benefit from a global market. Therefore, it is imperative that countries create a good investment climate for mobile operators to quickly build out 5G networks.

Imagine the potential in India with hundreds of millions of subscribers with 5G in their hands, or the transformation of the Fourth Industrial Revolution in areas such as healthcare, education and public safety.

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