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A Marketer’s Guide To 5G

What innovation-minded marketers need to know about the next-generation wireless network

The last time we wrote about 5G was over a year ago, and some significant developments have happened since then in the rollout of this next-gen wireless connectivity. In June, the 3GPP, the consortium overseeing wireless network standards, approved the global technology specifications for 5G, therefore kicking off initial deployments by some of the world’s largest telecoms and wireless service providers.

The Ground Zero of 5G

There is little doubt that 2019 will be the ground zero for consumer 5G adoption with Verizon, AT&T, and T-Mobile each rolling out their own “5G networks”.

AT&T plans to roll out its “5G Evolution” service in 99 U.S. markets by the end of 2018 and is aiming to offer nationwide coverage In the first half of 2019. Similarly, T-Mobile has announced plans to launch a post-paid 5G service by the end of 2018, but notes that it needs to merge with Sprint to acquire the necessary high-frequency spectrums in order to be competitive in 5G services. Though Verizon is first-to-market with its 5G service, it is not one for mobile users. Instead, the telecom giant rolled out a 5G service that is supposed to replace high-speed home internet.

Earlier this month, Verizon’s 5G Ultra Wideband Wireless home network officially went live in a few select neighborhoods in four cities. Rolling out in Houston, Indianapolis, LA, and Sacramento, the so-called “Verizon 5G Home” service promises gigabit home internet access over a cellular wireless network. Verizon says the network will run “reliably” at about 300 Mbps, with varying speeds “up to 1 Gbps” based on your homes’ proximity to its 5G-enabled towers. The initial rollout has been reported to be a mixed bag so far, as issues with installations and limited range of the network posing challenges for early adopters.

It is worth noting that none of these 5G services meet the global industry standards for 5G (5G NR) laid out by 3GPP in June, which is scheduled for rollout in 2019. Instead, they are all non-standalone version of 5G — that is to say, 5G networking built on top of existing LTE networks, and not the truly standalone 5G networks that will come later on. Many of the most important 5G capabilities, as laid out in 3GPP Release 16, won’t be commercially viable until the early-to-mid 2020s.

To deploy the real 5G networks, mobile carriers will need time to upgrade their infrastructure by building out the last-mile fibers and deploying numerous mini-antennas to ensure the coverage of 5G networks, which is not exactly easy work. To that end, global 5G rollout will likely mimic the upgrade from 3G to 4G to LTE — a slow and winding process that spans several years.

Source: Axios

Wireless service providers will need to do more to communicate to consumers about the benefits of 5G networks and the opportunities they could unlock for businesses. 59% of Americans have no idea what 5G is, a Sep. 2018 survey finds, pointing to a huge gap between industry hype and consumer awareness.

Benefits of 5G Go Beyond Speed

Among the many benefits that 5G networks promise to bring, faster wireless connectivity is the most self-evident perk, making it the easiest value proposition to communicate to mainstream consumers. 5G will push mobile speeds from 100 Mbps to upward of 10 Gbps, making wireless competitive with even the fastest fiber-optic wired networks (The average Internet connection in the United States was 18.7 Mbps as of Q1 of 2017.). This is partly why Verizon is confident enough to take on the likes of Comcast and Frontier in the home internet space with their new 5G home service.

Just as the upgrade from 3G to 4G LTE made it possible for video-heavy apps like Snapchat and various live-streaming apps to go mainstream and give rise to the Stories format and esports, the speed boost granted by 5G will no doubt unlock new opportunities in digital media and consumer technology. Mobile 4K or even 8K streaming, live or not, seems like a no-brainer, but even more exciting are the possibilities it would enable to beam high-quality AR and VR content to mobile and wireless headsets.

As important as the bandwidth boost is, however, 5G networks will also come with some other benefits that are equally instrumental in paving the way for new innovations. For starter, 5G networks promise reduced latency, making it far more responsive and reliable than 4G LTE. This reduced reaction time is crucial to the development of autonomous vehicles (AV) and connected medical devices, as any delay in data packet transmission could be a matter of life and death. It is not that the existing networks don’t have enough bandwidth to handle the computing needs of self-driving cars (most of the AV computing needs are handled locally anyway), but rather that certain technical characteristics of 4G networks prevent it from supporting the one-millisecond latency needed to minimize the reaction time of autonomous driving cars in response to unexpected road conditions. On a lighter note, reduced latency could drive more video game fans to play MMO games like Fortnite on mobile devices without lagging behind desktop players.

Another key benefit that 5G is set to unleash is support for higher system capacity and massive device connectivity. Anyone who has been to a music festival or sports event knows the pain of a congested cellular network when massive crowds congregate. Thanks to the numerous short-range mini-antennas that 5G networks employ, that will soon no longer be an issue. More importantly, expanded network capacity is crucial for building the future of IoT networks, which lays the foundation for innovations like drone delivery fleets and smart city infrastructure projects.

5G connectivity is also more cost effective and energy efficient than past generations of wireless technology, making the upgrade an eco-friendly choice and incentivizing integration with IoT devices. Moreover, by allowing many unconnected devices to be integrated into the grid through low-cost connections, 5G enables these devices to be more accurately monitored to support better forecasting of energy needs. For example, smart street lighting can cut electricity consumption and reduce light pollution by automatically dimming public lighting when no pedestrians or vehicles are present. The telecom industry set the goal of making the cellular network 1,000 times faster while using 90% less energy, which will also be achieved with a massive investment in network infrastructure.

The deployment of 5G will also be crucial to the development of cloud computing. Faster data transmission, coupled with reduced latency and energy-saving, could allow more device makers to move local processing on the devices to cloud servers, thus allowing more lower-end devices to handle computing-intense tasks like group AR and advanced machine learning over-the-air. It would also give rise to more sophisticated cloud services, thus unlocking unforeseen use cases for mobile devices and beyond.

Marketing Implications of 5G

All these benefits and resulting technological innovations are great and all, but how exactly does 5G impact brand marketing? Well, first of all, it is important to remember that the 5G rollout will be a slow and gradual process that likely spans a few years, so any marketing implication may not emerge at scale until around 2022.

That being said, one immediate implication is that the initial rollout of 5G to replace the home internet could convince more pay-TV subscribers to part ways with their cable companies. As part of the 5G home service, Verizon is letting customers choose between a free Apple TV or a Chromecast for their streaming content needs. If such 5G services become widely available, it could convert more late-adopting cord-cutters to become OTT viewers, further shifting the TV viewership and ad spend.

In the long-run, as 5G paves the way for next-gen AR/VR devices, it would also give rise to new media channels and ad formats. It could bring new opportunities in branded content in the forms of AR services, VR experiences, or simply enhanced 360 videos. AT&T announced plans to set up a 5G test zone on the Magic Leap company headquarters to test wireless AR devices and applications. The future IoT networks powered by 5G would theoretically allow brand marketers to gain insights from connected device data to optimize campaigns in real-time, but data privacy concerns will need to addressed first before that could happen.

In addition, the upgrade to 5G could also unlock many new IoT-based services for brands to reach out to their customers. Autonomous cars, for example, provide new media and service opportunities that many non-auto brands can explore. Whether it’s turning the self-driving cars into dining rooms or retail stores on wheels, or using autonomous drones to power the next-gen on-demand deliveries, 5G network is an absolute prerequisite to make those possibilities a reality for brands to explore.

Just like how no one predicted the rise of Stories and mobile live-streaming before widespread LTE adoption, more unforeseen use cases and applications are yet to be discovered. 5G is the network foundation that many future innovations will be built upon, and that’s what makes it so exciting in prospect.

The Global Race Towards 5G

There is no denying that 5G standardization is a global affair. It is a process that involves international agreements as to what the standard will look like from groups like the 3GPP and the International Telecommunication Union. Also, there aren’t any US companies making cellular base stations for 5G networks to run on, so some international collaboration via trade seems inevitable. However, because 5G is so fundamental to IoT and other innovations, there is an intensifying competition between China, Japan, and the U.S. to make commercial 5G a reality.

It is true that the East Asian countries are giving the U.S. a run for its money when it comes to commercial 5G network rollout. In Japan, major wireless carriers NTT DoComo, KDDI and SoftBank all aim to launch limited commercial 5G networks in 2018, full 5G services in 2020, in accordance with a government-led effort to show off its technological prowess at the 2020 Summer Olympics in Tokyo. South Korea’s three major mobile companies, KT, LG U+, and SK Telecom, agreed to collaborate on a single nationwide 5G infrastructure by no later than the middle of 2019.

Combined, Japan and South Korea is projected to account for 43% of 5G connections in 2019. Juniper Research ranked NTT Docomo, SK Telecom, LG U+, KT and SoftBank as the world’s top five “most promising 5G network operators” in its report, 5G Market Strategies: Consumer & Enterprise Opportunities & Forecasts 2018–2025. Following the top 5 players are AT&T and China Mobile, which were in the top five spots last year.

At the moment, China holds a narrow lead over the U.S. and Japan in 5G readiness, according to a report by research firm Analysys Mason. Largely thanks to proactive government policies and industry momentum, heavy infrastructure spending and existing tower density have given China an early lead, although actual rollout timeline remains unclear. China Mobile, the country’s largest wireless operator with over 902 million subscribers, has kicked off limited 5G trials in five coastal cities this year. And insiders speculate a merger between China Unicom and China Telecom, the smaller two of the nation’s three wireless carriers, is being considered to speed up the development of 5G mobile services.

Elsewhere, some early tests are being carried here and there with most international carriers aiming for a wide rollout between 2020 to 2022.

In the U.K., Vodafone performed the first UK trials in April 2018 using mid-band spectrum, but EE will likely be the first UK network out of the gates with 5G. French regulator Arcep has laid out its 5G roadmap with plans to launch in at least one major city by 2020, and provide 5G coverage of the main transport routes by 2025. Singapore’s first 5G pilot network, run by local carrier Singtel, is set to launch by the end of the year for drone delivery trials as well as testing autonomous vehicles over 5G. Qatar-based telecom company Ooredoo has launched what it claims to be the world’s first live commercial 5G network, although the scale and capacity of the network remain unspecified.

Overall, the global rollout of 5G networks will be a gradual process led by the U.S., Japan, and China, with other regional players doing their best to keep up with the pace. There is undoubtedly a nationalistic, competitive angle to the race that was not as pronounced in the previous upgrade to 4G. Nevertheless, it is important to remember that winning the 5G race is not the end goal in and of itself — it is but a helpful condition to propel future innovations.

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Richard Yao

Richard Yao

Manager of Strategy & Content, IPG Media Lab