Recovering from COVID: 5G to stimulate growth and drive productivity

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Related webinar: How will 5G transform transport and logistics?

In this webinar, we share learnings from 100+ interviews and surveys with industry professionals. During the presentation we will look to answer:

  • How will 5G accelerate digital transformation of the transport and logistics industry?
  • What are the key 5G-enabled use cases and what benefits could these deliver?
  • What must change within the industry to unlock this transformation?
  • What is the role for telcos – how can they work with industry leaders to increase adoption of 5G and build new revenues beyond core communication services?

Date: Thursday 10th September 2020
Time: 4pm BST

View the webinar recording


The 5G opportunity and value to verticals

In October 2019, STL Partners published research highlighting the benefits 5G-enabled use cases could unlock for industries. Our forecast predicted a potential $1.4 trillion increase in global GDP by 2030 across eight key industries.

In this short paper we look to update these numbers and explore new insights and conclusions based on two key factors:

  1. STL Partners has produced new research on the impact of 5G on the transport and logistics industry. This has led to more granular insight on the unique benefits and use cases for this vertical.
  2. COVID has changed the global landscape. It has increased demand for some 5G use cases, such as remote patient monitoring or video analytics solutions that determine if the public are respecting social distancing, but has also brought about economic uncertainty. We reflect these nuances in our updated figures.

5G enabled use cases could increase GDP by $1.5 trillion by 2030 – an increase from our original forecast

Source: STL Partners

5G’s impact on transport and logistics: Fresh analysis and new use cases

In 2019, we deep-dived into the 5G opportunity within two key verticals: healthcare and manufacturing. We have since performed a similar deep-dive on the transport and logistics industry, consisting of primary research with experts in the industry. We interviewed 10 enterprises, solutions providers, and members of 5G testbeds who were focused on transport and logistics, as well as surveying 100+ individuals who work in the industry to test the impact they predicted for three key 5G use cases. We will shortly be publishing a full report on these findings in detail.

We have revised our estimation on the impact of 5G on the transport and logistics industry. In 2019, we predicted 5G enabled use cases could increase the GDP value of the transport and logistics industry by 3.5% in 2030. We now believe the impact could be as high as 6%, though importantly some of these benefits are indirect rather than direct.

New forecasts show a bigger impact to the transport and logistics industry

Source: STL Partners

The three 5G-enabled solutions newly explored in detail in our study were:

  • Real-time routing and optimisation: Sensors collect data throughout the supply chain to improve visibility and optimise processes through real-time dynamic routing and scheduling;
  • Automated last 100 metres delivery: Using drones or automated delivery vehicles for the last ‘hundred yards’ of delivery, where the delivery van acts as a mobile final distribution point;
  • Connected traffic infrastructure: Smart sensors or cameras are integrated into traffic infrastructure to collect data about oncoming traffic and trigger real-time actions such as rerouting vehicles or changing traffic lights.

Benefits from these use cases include fewer traffic jams, more efficient supply chains, less fuel required and fewer accidents on the roads.

COVID has changed the landscape and appetite for 5G services

COVID-19 has caused a global economic slowdown. There has been a widespread fall in output across services, production, and construction in all major economies. Social distancing and nationwide lockdowns have led to a significant fall in consumer demand, to business and factory closures, and to supply chain disruptions. The pandemic’s interruption to international trade has far exceeded the impact of the US-China trade war and had a major impact on national economies. Lower international trade, coupled with a precipitous fall in passenger air travel, has also caused the air industry to enter a tailspin.

Table of Contents

  • Preface
  • The 5G opportunity: Updated forecast on value to verticals
  • 5G’s impact on transport and logistics: Fresh analysis and new use cases
    • Increased productivity through more efficient roads: An impact beyond transport and logistics
  • COVID has changed the landscape and appetite for 5G services
    • COVID has impacted the GDP of every country – and outlook for recovery is still unclear
    • Operators’ 5G strategies and roll out have also been impacted
    • Appetite for 5G-enabled healthcare services has been accelerated
  • Conclusion: Where next for the industry?

LTE: APAC and US ‘Leading The Experience’

Summary: LTE is gaining traction in Asia Pacific and the US, despite challenges with spectrum, voice, and handsets. In South Korea, for example, penetration is expected to exceed 50% within 18 months. Our report on the lessons learned at the 2012 NGMN conference. (July 2012, Executive Briefing Service, Future of the Networks Stream).

LTE in Korea

  Read in Full (Members only)   To Subscribe click here

Below is an extract from this 14 page Telco 2.0 Report that can be downloaded in full in PDF format by members of the Telco 2.0 Executive Briefing service and Future Networks here. Non-members can subscribe here and for this and other enquiries, please email / call +44 (0) 207 247 5003.

We will be looking further at the role of LTE as an element of the strategic transformation of the telco industry at the invitation only Executive Brainstorms in Dubai (November 6-7, 2012), Singapore (4-5 December, 2012), Silicon Valley (19-20 March 2013), and London (23-24 April, 2013). Email or call +44 (0) 207 243 5003 to find out more.

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Taking the pulse of LTE

Introduction – NGMN 2012

In June, Telco 2.0 attended the main annual conference of NGMN in San Francisco. NGMN is the “Next Generation Mobile Network” alliance, the industry group tasked with defining the requirements for 4G networks and beyond. (It is then up to 3GPP and – historically at least – other standards bodies, to define the actual technologies which meet those requirements). Set up in 2006, it evaluated a number of candidate technologies, it eventually settled on LTE as its preferred “next-gen” technology, after a brief flirtation including WiMAX as well.

The conference was an interesting mix of American and Asian companies, operators (with quite a CTO-heavy representation), major vendors and some niche technology specialists. Coincidentally, the event also took place at the same time as Apple’s flagship annual developer conference at the Moscone Center across the road.

Although it was primarily about current LTE networks, quite a lot of the features that feature in the next stage, “LTE-Advanced” were discussed too, as well as updates on the roles of HSPA+ and WiFi. Some of the material was outside Telco 2.0’s normal beat (for example the innards of base station antennas), but there were also quite a lot of references to evolving broadband business models, APIs and the broader Internet value chain.

Key Take-Outs

In some countries, LTE adoption is happening very quickly – in fact, faster than expected. This is impressive, and a testament to the NGMN process and 3GPP getting the basic radio technology standards right. However, rollout and uptake is very patchy, especially outside the US, Korea and Japan. They are still problems around the fragmentation of suitable spectrum bands, expensive devices, supporting IT systems and the thorny issue of how to deal with voice. In addition, many operators’ capex budgets are being constrained by macroeconomic uncertainty. What also seems true is that LTE has not (yet) resulted in any substantive new telco business models, although there is clearly a lot of work behind the scenes on APIs and new pricing and data-bundling approaches.  

We are also impressed by the continued focus of the NGMN itself on further evolution of 4G+ networks, in resolving the outstanding technical issues (e.g. helping to drive towards multiband-capable devices, working on mobilised versions of adaptive video streaming), continuing the evolution to ever-better network speeds and efficiencies, and helping to minimise operators’ capex and opex through programmes such as SON (self-optimising networks).

ngmm: the engine of broadband wireless innovation

LTE adoption: accelerating – but patchy

One key conclusion from the event was the surprisingly rapid switch-over of users from 3G to 4G where it is available, especially with a decent range of handsets and aggressive marketing. In particular, US, South Korean and Japanese operators are leading the way. The US probably has the largest absolute number of subscribers – almost certainly more than 10m by the end of Q2 2012 (Verizon had 8m by end-Q1, with MetroPCS and AT&T also having launched). But in terms of penetration, it looks like South Korea is going to be the prize-winner. SKTelecom already has more than 3m subscribers, and is expecting 6m by the end of the year. More meaningfully, the various Korean presenters at the event seemed to agree the penetration of LTE could be as high as 50% of mobile users by the end of next year. NTT DoCoMo’s LTE service (branded Xi) is also accelerating rapidly, recently crossing the 3m user threshold, with a broad range of LTE smartphones coming out this summer, in an attempt to take the wind out of Softbank’s iPhone hegemony.

Figure 1: South Korea will have 30m LTE subs at end-2013, vs 49m population

LTE in Korea
Source: Samsung Electronics

This growth is not really being mirrored elsewhere, however. At the end of Q1, TeliaSonera had just 100k subscribers (mostly USB dongles) across a 7-country footprint of LTE networks, despite being the first to launch at the end of 2009. This probably reflects the fact that smartphones suitable for European frequency bands (and supporting voice) have been slow in arriving, something that should change rapidly from now onwards. It is also notable that TeliaSonera has attempted to position LTE as a premium, higher-priced option compared to 3G, while operators such as Verizon have really just used 4G as a marketing ploy, offering faster speeds as a counter to AT&T – and also perhaps to give Android devices an edge against the more expensive-to-subsidise iPhone.

Once European and Chinese markets really start to market LTE smartphones in anger (which will likely be around the 2012 Xmas season), we should see another ramp-up in demand – although that will partly be determined by whether the next iPhone (likely due around September-October) finally supports LTE or not.

To read the note in full, including the following sections detailing support for the analysis…

  • New business models, or more of the same?
  • Are the new models working?
  • Wholesale LTE
  • Other hurdles for LTE
  • Spectrum fragmentation blues
  • Handsets and spectrum
  • Roaming and spectrum
  • But what about voice and messaging?
  • HetNets & WiFi – part of “Next-gen networks” or not?
  • LTE Apps?
  • Conclusions

…and the following figures…

  • Figure 1: South Korea will have 30m LTE subs at end-2013, vs 49m population
  • Figure 2 – Juniper: exposing network APIs to apps
  • Figure 3 – Yota is wholesaling LTE capacity, while acting as a 2G/3G MVNO
  • Figure 4 – A compelling argument to replace old public-safety radios with LTE
  • Figure 5 – NTT DoCoMo made a colourful argument about LTE spectrum fragmentation

Members of the Telco 2.0 Executive Briefing Subscription Service and Future Networks Stream can download the full 14 page report in PDF format hereNon-Members, please subscribe here. For this or other enquiries, please email / call +44 (0) 207 247 5003.