IMAGE: Nicosariego CC BY SA

Putting 5G in perspective

Enrique Dans
Aug 16, 2018 · 3 min read

It seems much more is being written about the strategic implications of 5G than the technological benefits the fifth generation of mobile telephony will bring. Up until now, the media has been more concerned with the global race to deploy it first, fears of possible foreign control of strategic infrastructures, or as a revenue stream for governments through license auctioning, that on what the technology can do.

For most people, 5G is simply what will come after that 4G, which came after 3G: faster and more secure connections, which is always a good thing. It was the roll out of 3G, first in Japan and then in the United States in 2002, that made the iPhone and apps possible in 2007, in the same way that 4G enabled applications such as Instagram or Uber in the United States, allowing those apps to gain enough critical mass before expanding to the rest of the world. Being the first country to deploy a particular technology can be important if it can capitalize on investments in infrastructure to enable domestic companies to benefit, or if it can generate an ecosystem that feeds entrepreneurs and companies to launch products at home that can then be exported to the rest of the world.

What does 5G mean? It’s not so much about faster, better connections, but what can be done with them. Up to a hundred times more speed will mean applications such as three-dimensional holographic environments and enriched video, along with preventive medicine, smart cities and autonomous vehicles, and that’s just for starters. To be honest, I am puzzled that we aren’t talking much more about a technology capable of radically changing the world.

Why are some countries competing to control the roll out of 5G? Some US telecommunications companies like Verizon or AT&T have already announced 5G in some cities, as well as television-related services, but this does not hide the bigger reality that since 2015, China has invested $24 billion more in 5G than the United States, and currently has about 350,000 nodes compared to around 30,000 in the United States. The company with the most patents in this field is Chinese, and some of the recent decisions of the Trump administration are desperate attempts to hold on to US ownership of some strategic companies.

What will happen if China takes the 5G lead? Many of the country’s companies, which have benefited from restrictions on foreign competitors that have helped create a thriving technological ecosystem, are now gaining experience in 5G environments and developing products they will export to the rest of the world. The fact that few 5G terminals exist or that we do not know what the price will be when they are launched, does not matter: what is really important is to be able to conceptualize and design the services to which they will be able to access when they are available.

Japan may have pioneered the roll out of 3G, but it was of no real value to the country: Japanese entrepreneurs were not then able to capitalize on this initial advantage, and instead US companies did. But everything indicates that this time, in the case of China, the story could be different, and that we could see, for example, WeChat, which currently offers, in addition to messaging, services ranging from mobile payments to online banking or transportation, gaining experience in fully sensorized environments and offering those services as other countries roll out 5G.

This early experience could define who leads the technology landscape over the next decade and taking into account the entrepreneurial ecosystem in China, could mean it will be able to generate products and services that will dominate the global markets. That’s what’s really at stake in the 5G race.


(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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