5G: “A riddle, wrapped in a mystery, inside an enigma.”
Robert R. Fragnito | Chief Operating Officer | May 2019 | Printer Friendly Version
The 1939 Churchill quote is appropriately paired when attempting to discover what 5G is all about. In his broadcast, Churchill was underscoring the complexity of trying to forecast Russia’s next move as World War II broke out a month before. He concluded that the “key” to solving this mystery was that Russia would act in its own national interest when facing the war in Europe.
So, what is the “key” to 5G? It appears that the key is 5G itself. As developments in technology are leading us to driverless cars, artificial intelligence, virtual reality, and remote surgery, 5G is proving to be the fuel needed to kick off what is being called the “Fourth Industrial Revolution.” It has sparked a global race among tech giants in the shadow of competing geopolitical foes.
5G was effectively launched into the US national spotlight when President Donald Trump declared that “the race for 5G is on, and America must win.” It is expected that industry leaders in the US will spend over $275 billion by 2026 to claim dominance in the 5G space. The stakes—over $12.3 trillion in annual revenues across multiple industries by 2035.
What is 5G, what does it do?
Simply put, 5G is the fifth generation of cellular technology. Consumers can expect to see enhanced greater speed, lower latency affecting the response time when streaming and increasing connectivity across multiple devices at once. To put it in perspective, you could imagine your data connection being 10 to 100 times faster than what your using today.
The central role that 5G plays in future innovation is centered on reducing lag-time and enabling real-time communication between devices. If you’re operating a 5G device, you will also be able to manage to connect with other devices acting as a powerful hotspot at home or with your business. Analysts also highlight the prospects of 5G impacting rural communities and agriculture producers despite delays in establishing networks in these areas.
Where can I find 5G?
Understanding where we’re at with 5G is not an easy task, but one thing is for sure, the competition is fierce, and the dynamics of this race are unfolding at a rapid pace on a global scale. This became apparent when competitors were announcing the launch of their 5G networks. If you were to ask who was the first to launch 5G, you will get a barrage of different answers.
The consensus is that South Korean carriers where the first to launch 5G in early April, beating both the US and China. US carrier Verizon is taking issue with this narrative claiming it was first, but Reuters and South Korea say otherwise. Technically, South Korea’s SK Telecom and KT Corp launched approximately one hour before Verizon.
In the United States, Verizon offers 5G coverage in parts of Chicago and Minneapolis, but with limitations. Consumers of 5G are facing one significant issue, there are no phones available yet to connect to the service. The only way American consumers can connect to 5G is through an attachable Mod to the Moto Z3 phone. CNET tested Verizon’s service in Chicago and found that 5G did not live up to expectations but emphasized that the prospects for the service are still very exciting.
Geopolitics at the Forefront
As the 5G race is officially underway, the geopolitical competition is pitting the United States and China directly at odds. On the one hand, China’s Huawei is making great strides in the 5G space and is currently the top contender internationally. The US private sector on the other hand is lagging Chinese and Scandinavian tech giants in making technical contributions to the 5G standard.
Both President Trump and Federal Communications Commission (FCC) Chairman Ajit Pai announced in April that the federal government will not nationalize the development of 5G technology but pledged holding an auction for more spectrum. They also committed over $20 billion to fund much needed development of rural broadband. The spectrum auction will take place in three segments and will enable the private sector to gain faster speeds for commercial use. The aim for the federal government is to ensure the US is well positioned to take the lead in the 5G race.
The US has been very active in its efforts to warn allies about installing Huawei 5G technology citing security concerns surrounding a possible backdoor channel for the Chinese government to gather data on these networks. The US has gone as far as to announce that it will re-evaluate intelligence sharing with countries who adopt Huawei’s technology in building their 5G networks.
US allies are not united over banning Huawei. So far Japan and Australia have placed bans on Huawei, although Japan’s ban is not outright, Chinese companies like Huawei would not be able to establish a presence in the Japanese telecoms market. It is likely that Canada will do the same despite an ongoing spat with China over detained Canadians and the arrest of Huawei CFO Meng Wanzhou. European Union members are divided over implementing Huawei’s technology as they weigh the cost-benefit versus security implications.
The United Kingdom presents an interesting case where geopolitical impasses are unfolding. Initially, the UK seemed more inclined to take the threat of Chinese espionage through Huawei at face value as British experts and government officials indicated in the past. A recent government report cited “significant” security concerns over Huawei’s equipment, in addition to criticism from industry experts stating Huawei’s equipment is “shoddy.”
Leaked reports in April said the UK National Security Council decided to allow Huawei to develop parts for the country’s national 5G network. The news of the decision has sparked further debate domestically and is expected to have consequences on US-UK relations. Subsequently, China’s ambassador to the UK called for the UK to resist outside pressures from banning Huawei.
As we reflect on Churchill’s statements from 80 years ago, we can infer without debate that nations act in their own national interest. The geopolitical dimension of 5G is proving to reinforce this fact. Investors are witnessing the dawn of a new era in industrial competition that will give life to new technologies and a major progression in innovation. Consequently, investors will be poised to seek new opportunities in this emerging sector and are now made aware of the implications effecting domestic and geopolitical spheres. As for 5G, the race is on, and the winner will reap the benefits of a properly executed strategy.
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