Which 5G Use Cases Should Telcos Prioritize?
January 28, 2019
5G as a Business Enabler
2019 will be a hallmark year for the global telecommunications industry as most of the leading service providers will launch 5G services. And while there is considerable excitement around the new capabilities that 5G will bring – notably high bandwidth services and very low latency – there are dozens of potential use cases that telcos are considering, and deciding which services to prioritize is not an easy task for service providers. One of the fundamental shifts in a telco’s business model with regards to 5G service is that it will enable significant expansion into the business-to-business (B2B) field driven by 5G’s enhanced features. Telcos have traditionally focused on B2C services, but competition from Over-the- Top services have eroded voice revenues in recent years due to free calling and messaging services which is not an issues in the B2B space. Hence telcos should increasingly look to B2B services to drive initial growth. The global ICT community will be gathering at the upcoming GSM Association Mobile World Congress in Barcelona to discuss how telcos need to reinvent themselves in the 5G era and many new use cases and business models will be on display.
This is not to say that 5G will not have a large impact in the business-to-consumer field, as of course there will be many opportunities for consumers as well. In fact, early 5G deployments are already showing the potential that 5G services will offer. In the United States Verizon is offering fixed wireless broadband access over its pre-5G network in limited areas, and the company has announced that half of its customer base is leaving competitors to use its service. Hence we are entering an era where wireless service can be faster and have a higher quality than fixed-line Internet. Other opportunities for B2C 5G services will emerge in areas like smart glasses and Virtual Reality, but it will take a few years for the hardware ecosystem to catch up.
Therefore, initial 5G services should heavily focus on the B2B space. But even within B2B services there are many options for telcos to choose from. Overall initial services should not relay on a wide network, as applications like the connected car will require nationwide coverage which will not be available for years. Instead initial 5G deployments are focusing on on-site deployments which allow for a more controlled deployment and hence buildings, stadiums, factories and airports are currently some of the hotspots for 5G deployments. Looking at the initial deployments of 5G currently in place in the world, three of the hottest areas for B2B deployments are currently found in manufacturing, construction and service robotics, which are further explained below:
The 5G Powered Smart Factory
Manufacturing is one of the early 5G use cases which is getting a lot of attention recently. This should come as no surprise as many countries are seeing increased interest in domestic manufacturing given current questions about ongoing trade with China. However, many of these same countries are facing labor shortages and even a declining population and hence semi or even fully automated factories are being constructed around the world.
5G is being integrated in the smart factory and in fact, in South Korea the largest telco in the country announced smart manufacturing as its first commercial 5G service. The company is working with a local automotive parts manufacturer Myunghwa to utilize 5G in its production lines. In this service auto parts are scanned via 24 different angles to check for defects. High resolution images are sent to the cloud over 5G and an AI algorithm can determine if there are any defects in the product. If any issues are found a robotic arm will remove the defective component.
Better Construction Site Efficiency with 5G
Like the manufacturing industry, the construction industry is an area that can greatly benefit from the introduction and use of 5G services. The construction industry is also facing a labor shortage in many countries and 5G services can help automate several building tasks. 5G services can also improve the safety situation in the construction industry by allowing remote inspection of dangerous constriction sites and offers the ability to remotely control potentially dangerous heavy machinery.
This is a big topic in Japan given many large infrastructure projects for upcoming global sporting events and as such the country has already seen 5G used in the construction industry. A recent example of this is the recent demonstration by construction company Obayashi Corporation. The company worked with partners NEC and KDDI to create a 5G environment for construction services. In this trial 5G was used to transmit high quality images in both 3D and using 4K resolution to a remote operations control room. Because the trial used 5G higher quality images were sent faster and surpassed the quality of previous data and a greater operational efficiency was achieved.
Enhanced Service Robots with 5G
Service Robots are another area of tremendous interest to 5G operators, as robots are largely seen as a solution to automating manual functions in many industries such as agriculture, security, logistics and transportation. Many service robots are currently deployed in a variety of industry use cases, but the prospect of adding 5G capabilities to robots allow for even greater operational capabilities.
Recently the first 5G-enabled robot was deployed in Finland’s Helsinki Airport by its operator Finavia in partnership with mobile operator Telia. This robot is controlled by a 5G base station and can perform several tasks such as transmitting real time, high resolution video of conditions of the terminal to a remote location over a 5G network. The robot will also be taught to perform new functions such as guiding passengers within the terminal.
Selecting the Right Initial 5G use Cases
Due to a general lack of 5G hardware, the world’s leading operators are deploying 5G in B2B scenarios in order to increase business efficiency. Three of the hottest industries where 5G is being deployed in a commercial setting include smart manufacturing, smart construction and service robotics. All of these deployment scenarios can be accomplished using relatively little infrastructure and hence are ideal for an initial deployment as compared to other industries. Furthermore there are already several successful examples of deployments with positive initial results. Therefore, telcos currently considering which verticals and use cases to initially deploy 5G services should consider these three areas as a starting point.