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Industry Insight

5G set to spark disruption

But SA will only benefit fully from its potential if it understands the bigger picture.

5G technology is expected to become commercially available within the next three years. 5G is not an evolutionary development, but is set to catalyse a step change in the way business and society work. It is vital for SA to put strategies in place to ensure a rapid and comprehensive roll-out of 5G.

The revolutionary potential of 5G is driven by several factors. It is faster, offering up to 10 gigabits per second (Gbps), exponentially faster than 4G's top range of just 1Gbps. This means faster download speeds even as the population of users, and the amount of data downloaded, rises.

5G is also more reliable. It is designed to accommodate the spiralling number of connected devices, which now include appliances, security and access systems, vehicles, wearable devices and an expanding number of sensors on industrial and other equipment.

In addition, 5G's lower latency will reduce the delay taken for an instruction to be acted on. Reducing this delay gives users a better experience, and, more importantly, makes automation much more effective and safe. Thus, 5G will advance the Internet of things practically, and make developments like driverless vehicles – which rely on machine-to-machine communication – safer, and thus commercially viable.

At the technology level, 5G will enable the "everything connected" world, prompting further automation, from driverless cars to whole supply chains. 5G will enable people with smart devices to control their worlds in new and exciting ways. In the process, it will enhance productivity and spark the disruption of industry and business models.

Broadband's benefits

Since the 1970s, research has suggested there is a correlation between broadband penetration and an increase in gross domestic product.[1] By expanding the base of human as well as machine users of mobile broadband, a country like SA could create new jobs and increase economic activity – both essential if it is to overcome the challenges it faces.

5G will enable people with smart devices to control their worlds in new and exciting ways.

However, this is not an ideal world. Like most countries, SA is not in a position simply to roll-out a new 5G network as and when the technology becomes available.

One challenge is that carriers have made huge investments in rolling out their networks, and these investments need to be protected.

To overcome this challenge, it is imperative to focus research efforts on extending the life of existing 4G networks by creating a pre-5G phase that would deliver a proportion of the 5G performance benefits using existing infrastructure. In addition, new technological developments, such as software-defined networking and core virtualisation, can be used to make today's infrastructure more future fit, and to reduce infrastructure costs in general.

Another challenge is that SA is a very large country with a population that is more spread out than is the case in, say, India or China. At the same time, smartphone penetration is relatively low, at around 37%. If the mobile industry continues to construct its business case based on these current realities, it will build self-limitation into the system.

The experience of a market like India offers a different, longer term, approach. By offering six months of free mobile broadband, one of the Indian carriers prompted the development of new apps and gained 700 million new subscribers who used large amounts of data. After the initial period, charges were introduced but kept low. Consumers benefited, but so did the regional and national economies – and the large number of subscribers meant economies of scale could be gained quickly.

Therefore, affordability should be the watchword when it comes to rolling out an important technology platform like 5G, not early profit. This approach may limit short-term returns for the operators, but it will maximise their longer term gains, as well as the benefits to the overall economy by bringing new subscribers onto the network and growing the digital economy.

Reducing infrastructure costs by prolonging the usefulness of existing networks plus future-proofing new networks, and focusing on affordability to build economies of scale, are key concepts that have been used successfully elsewhere.

SA must look to international vendors that have this critical experience to help the country make the right choices now to build a better digital future.

* Fu Zhen is CTO of ZTE Corporation SA.
[1] The World Bank study by Christine Zhen-Wei Qiang and Carlo M. Rossotto with Kaoru Kimura, "Economic impacts of broadband" (2009), available at http://siteresources.worldbank.org/EXTIC4D/Resources/IC4D_Broadband_35_50.pdf made the assertion that every 10% of broadband penetration translated into a 1.3% increase in GDP. This is supported by Colin Scott, "Does broadband Internet access actually spur economic growth" (7 December 2012), available at https://people.eecs.berkeley.edu/~rcs/classes/ictd.pdf. See also ITU, Impact of broadband on the economy (April 2012), available at https://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf.


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