The trillion dollar race: what 5G means to the global economy

Despite its general historical technological dominance, the U.S. is currently lagging China and South Korea in terms of 5G readiness. Leading the world in the 5G race means being agile and productive in terms of infrastructure, and countries like China and South Korea approve new wireless sites in days – the U.S. took 30 years to reach the 150,000 towers that service today's networks. 5G will require five times as many towers, and the lesson is clear: if 5G is a race, to lead the pack means moving faster.

Where are things now?

Several operators are at varying stages of the process of building their 5G networks. U.S. provider AT&T has said it will offer 5G in 12 markets by the end of 2018, but at present it says it is focused on specific use cases. Fellow U.S. provider Verizon is also planning to commence 5G rollout in 2018, starting in Sacramento.

Other countries were ahead of the U.S. in getting their 5G networks up and running. South Korea, typically at the cutting edge of mobile and digital innovation, introduced 5G network services for the 2018 Winter Olympics, but South Korea is in no major hurry to deploy 5G throughout the rest of the country: they forecast having 5 percent of the population on 5G by 2020, and 90 percent by 2026.

Ooredoo in Qatar claimed the world's first commercial 5G deployment in the capital city of Doha, and while mobile broadband is undoubtedly a great fit with the desert territories of the Middle East, Ooredoo's uptake is being hampered by the lack of 5G devices.

Economic impact will be profound

5G is set to have a profound effect on countries' economic performance and GDP. In 2016, mobile technologies and services generated 4.4 percent of GDP globally, equating to about $3.3 trillion in economic value. This has been estimated to grow to over $4.2 trillion by 2020, or 4.9 percent of global GDP, as faster mobile connectivity continues to drive gains in productivity and efficiency.

Similarly, the GSMA found that mobile technologies and services generated 3.3 percent of GDP in Europe in 2017, with the continent's mobile ecosystem responsible for 2.5 million jobs, too. Europe is the world's most highly penetrated regional mobile market, with 465 million unique mobile subscribers by the end of 2017, around 85 percent of the population. That GDP contribution is forecast to rise to 4.1 percent by 2022, and with the first 5G launches expected in Europe by 2020, countries will be seeking to leverage the new mobile network to their overall benefit.

The importance of the potential economic impact of 5G really shouldn't be underestimated: the U.S. worked hard to establish its place as a 4G leader, with the introduction of 4G mobile broadband adding $100 billion to the nation's GDP. The GSMA has forecast that 4G connections will comprise four out of five mobile connections in North America by 2020, higher than any other global region. But should the U.S. lose its position as a world leader in wireless, it will likely feel the effect in terms of job losses and technology innovation being exported abroad. The economic benefits the U.S. enjoyed with its leadership in 4G would be gone.

What will 5G power?

We're looking at a world where not just all people are connected but all things are, too: cars will be connected to roads, patients and their medical devices to their doctors and smart cities will offer all new connected services to residents and workers. And 5G will be the key to unlocking the nascent demand for IoT.

GSMA Intelligence predicts that the number of 5G connections around the world will have hit 1.3 billion by 2025, amounting to around 40 percent, or 2.7 billion, of the world's people. Further, the GSMA believes that transportation will be central to this rapid growth, with urban congestion a big driver of its increased usage. 5G networks and AI systems will help make traveling safer, by communicating vehicle locations in real time and lessening the chances of accidents or collisions. 5G is also expected to further enable the use of more reliable self-driving vehicles, including autonomous trucks, again making roads safer for all. The intelligent transport market has been forecast to grow at a CAGR of around 12 percent from 2017 to 2022, and 5G can only help augment that growth.

Which industries are forging ahead with planned 5G deployments?

Public transport is currently setting the pace, offering passengers high-speed connectivity as well as enhanced safety on board vehicles. Public safety in general has strong plans in place that leverage 5G to provide improved first-responder services, smart analytics and real-time smart video surveillance. Energy and utilities will benefit from 5G by being able to deploy more smart meters and smart grids, while automotive is set to enhance customer experience through infotainment and AR dashboards in autonomous vehicles.

Orange Group has already been carrying out 5G tests, with a recent expansion into Marseille coming on top of tests in Lille, Douai and use cases presented in Belgium. The Orange 5G strategy is built around three components: improved high-speed mobile broadband, high-speed fixed broadband access and new uses, including connected objects driving digital transformation in sectors like automotive and health.

The slicing situation

Network slicing will play a key role in 5G deployments, too. Network slicing is about delivering multiple network events over one shared infrastructure. Basically, network operators will be able to quickly generate and deploy "slices" of the network and customize them according to a customer's or system's needs be that speed, latency or power output.

At present, some providers are already cooperating with other operators to develop 5G network slicing models. Ericsson is working with SK Telecom of South Korea on a network slicing technology optimized for 5G services, while Huawei and Deutsche Telekom have already conducted a demonstration of 5G slicing technology. ZTE and China Mobile have also unveiled a joint 5G-oriented future network architecture and network slice system designed to create dynamic 5G application scenario network slices.

Read about the 5G strategy, trials and use cases for the Orange Group.