5G may have been delayed in the UK due to the government's decision to ban Huawei, but a revolution is coming all the same. When it does come, 5G will beckon in a new era and understanding how this will differ from the current one will be crucial for planning ahead.
The 5G rollout is not just about improved mobile coverage. There are massive potential benefits in terms of increased productivity, efficiency gains, and new opportunities for UK business as well as higher potential inward investment with 5G leadership.
The step-change in mobile connectivity provided by 5G could also fuel whole new business models across the economy and the regions.
When and how will 5G become a reality?
The UK Government once held an ambition to be a leader in 5G, not only to enable the UK to be a world-leading digital economy, but also as a catalyst for its ‘levelling up’ agenda to support prosperity in the regions.
However, under pressure from the Trump administration, the UK Government decided initially to restrict the use of Huawei on its 5G networks and then to ban the vendor’s equipment entirely – removing it all by the end of 2027.
Assembly Research estimates that the initial decision to partially restrict the use of Huawei would delay the 5G roll-out by 18 and 24 months and cost the UK economy up to £6.8bn. It also reckons that a full ban on Huawei would delay the rollout by a further year, meaning a cumulative delay to the 5G rollout of two to three years.
Further impediments of Huawei restrictions
As well as the direct cost to the industry of £2bn to replace the Huawei equipment, there is a broader indirect cost to the wider economy, from loss of leadership in 5G, delayed innovation, and missed opportunities to foster new business models and level up the regions. This brings the full cost to the UK economy of a three-year delay in the 5G roll-out to as much as £18.2bn.
While this is a smaller cost to the UK than the £200 bn in lost economic growth by the end of this year from Brexit, it is notable that many of the same MPs have championed both the Huawei ban and Brexit.
Little more in reality than a trade war tactic being employed by the US, the perceived threat from Huawei is about as far-fetched as the business case for Brexit was. After all, it assumes that telecoms operators are going to be unable to secure their networks or manage their equipment and that they will also be unable to notice or prevent vast amounts of data being redirected via China.
Nordic 5G duopoly
In addition to the economic impact, the UK and other countries implementing a Huawei ban face a Nordic duopoly for 5G with Nokia and Ericsson.
However, some believe that the perceived security threat from China and the restriction of having to deal with the Nordic duopoly could both be overcome by adopting Open RAN. An open deployment approach that would use software to allow off the shelf equipment to be used as part of the network infrastructure.
Open RAN is unlikely to be the panacea that some make out. Both the Nordic giants are operating at scale, but neither is particularly profitable. An ecosystem of fragmented Open RAN vendors is unlikely to be able to reduce equipment prices significantly.
Also ensuring interoperability between different Open RAN vendors would reduce functionality to the lowest common denominator. This could hinder innovation and also create security vulnerabilities.
What will be the impact of 5G when it does arrive?
The fact that 5G will open the doors to much improved mobile coverage with far greater bandwidth is a given. The real benefits will come from the wave of innovation and new business models that it could enable (much of it now unfortunately postponed):
Autonomous Vehicles
Understanding the environment around you and responding intelligently and instantly to threats or incidents requires a massive amount of processing power. Autonomous vehicles that travel anywhere will need all this intelligence onboard.
However, vehicles that only ever operate within a 5G coverage zone don’t. Computational power could be provided remotely and 5G beacons in lampposts and other stationary infrastructure will have a far better understanding of their immediate vicinity providing real-time intelligence to vehicles as they approach. This would massively reduce the cost of such autonomous vehicles.
Smart Ecosystems
Currently, we have multiple isolated systems that operate in parallel, for transport, health, payments, etc with limited integration. With the introduction of 5G we will see an acceleration of smart city ecosystems with mesh networks linking 5G beacons. Not only will this enable lower-cost autonomous vehicles (see above) for delivery or public transport, but it will also provide a host of other devices with real-time intelligence.
Smart health apps will be able to monitor or manage your health and wellbeing, spotting symptoms early, helping you make lifestyle choices, and arranging treatment or summoning aid when you need it.
Applications
5G will enable a new wave of high bandwidth collaborative applications. These will replace the applications we currently use which may become obsolete. We have already seen applications like Figma, which is a design app that was built from the ground-up as a collaborative web app, taking the world by storm.
It is threatening to replace traditional design packages from the likes of Adobe that were not designed for this new era. 5G will also spawn a whole set of new applications on this way, providing capabilities that we have never seen before.
Devices and Processors
We are already seeing Chromebooks start to replace PCs (laptops and Desktops). As they harness processing power that is provided remotely, it can be upgraded easily without you needing to continually replace or upgrade your device.
With almost no limit to the bandwidth and remote processing power, while you are connected, battery power will become the main limiting factor. Thankfully battery technology is improving at a rapid pace.
Also for portable devices that need high processing power whether or not they are connected, we have already seen massive gains in the processing power of low energy consumption chips. Indeed, the latest generation of Apple chips now has greater processing power than Intel's X86 processors, which have failed to keep pace, while consuming far less energy.
Datacenters
We are already seeing a move to cloud-based systems. This has if anything accelerated with the pandemic and remote working, but it will accelerate further with 5G. It has been argued that cloud computing is simply using someone else’s data centre. The data does not reside in the heavens.
While the hyperscaler cloud providers can provide processing power, innovative features, and secure environments on a massive scale and therefore at a competitive rate, how they do so raises privacy concerns. The recent Schrems II ruling overturned Privacy Shield and restricted the use of Standard Contractual Clauses (SCCS), the only other legal means of data transfer to the US (or to a US cloud provider operating in Europe).
5G’s enhanced connectivity will lead to numerous potentially transformational advances, but all such technologies come with responsibilities. With the greater data volumes will come privacy considerations that will require an ethical approach. And while the 5G delay will be a massive setback for the UK economy, with little hope now of 5G leadership, we can benefit from these many opportunities as a ‘fast follower’ if delays are limited.
