Why 5G is going to be the mother of all context variables

Enrique Dans
Jul 30 · 4 min read

Apple’s acquisition of Intel’s modems division for $1billion, a move aimed at ensuring control over the 5G technology in its terminals after its problems with Qualcomm and the foreseeable difficulties of using Huawei’s chips, has revived the discussion about the rollout of 5G: for Apple, $1 billion is a small amount to pay to improve the development potential that will define its road map, while trying to boost an Intel division seen as uncompetitive.

How will 5G affect us? If you think this is déjà vu all over again after what we went through with 3G and 4G not long ago, being told “this time it’ll be different” won’t help much. As on previous occasions, we have seen unfounded cancer scares based on poorly researched studies that we’re all going to die from radiation sickness. As before, our cities will be dug up and antennas erected left, right and center — this time, there will be even more, because 5G requires bigger antenna networks that while smaller and cheaper need to be closer to us and wired properly — along with arguments about urban infrastructure, cost and tariffs, as well as the speed of rollout in not in urban areas with significant user densities, but in rural or less populated areas where there isn’t as much money to be made.

What’s different about 5G? First, it’s not just about speed. Yes, the bandwidth makes it possible to transmit about a hundred times more data than with 4G, but it improves not only the amount of data that can be transmitted, but also its latency, the speed with which that data is transmitted, creating virtually instantaneous connections. Add increasingly efficient and cheaper sensors to the equation and we are talking about something that will affect our relationship with the environment, and what is more interesting, that will differentiate the companies that adopt it quickly and those that take longer. We will get used to being surrounded by objects that react in real time, as if they were people, to our actions, to environments that offer us similar benefits to those provided by being surrounded by people reacting to what we do.

To consider how something like this will affect a company, we need to break down the value chain to elementary steps and think about how we could improve the efficiency and awareness of that chain if we sensed each of its elements in ways that they are still difficult to imagine, but that will emerge immediately due to the creativity of a dynamic environment. How will our business change when all its components are able to send us real-time signals about what is happening along the value chain? If we don’t take the opportunity to put value into our business, someone else will and we’ll be out of business.

5G will not immediately replace 4G: the two will operate alongside each other for a long time. As happens now, we will spend a few years seeing our smartphones suddenly downgrade, in this case, to 4G, nothing will work and the delay will seem unacceptable, because app developers have taken advantage of 5G bandwidth and its low latency to improve their products, which won’t work as well on the networks of the previous generation.

But 5G won’t just impact on telecommunications companies and how they pay for their new infrastructure. 5G starts with telecommunications but will affect all companies, whatever they do. Not all countries will roll out the technology at the same speed and we will see how countries like China, where decisions are made centrally based on a common strategy and without too much discussion, will offer its companies the chance to experience the future ahead of their competitors in other countries.

5G is not a telecommunications question, but a macroeconomic one: it will decide winners and losers, offering some emerging economies the chance to leapfrog technologies already considered obsolete and will highlight the difficulties other countries will face in adapting. If you want your company to understand 5G’s potential, start by trying it out and then rethink your entire value chain based on its possibilities as soon as possible, because any delay means lost opportunities.

As a context variable, 5G will soon create environments you will need to think about very carefully. If you are waiting for it to arrive, for your operator to provide you with coverage, you need to understand that this really is a game changer and you have to experience it to even start to grasp its potential.

(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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