How 5G's success lies in adoption in health care, farming and automation

If you cut the hype over the ultra high-speed 5G mobile technology, the reality is that it may not have any significant impact for another three to five years. For telcos as well as consumers, the big benefits of the new technology will only come when it proliferates beyond traditional telecom services to other industries and applications such as health care, education, farming, and, of course, smart homes and cities, power grids, autonomous cars and industrial automation.

For the moment, 5G services will mirror global trends and enable faster rollout of fixed wireless access (FWA) broadband with 100 times more capacity than 4G to replace or complement fibre-to-the-home (FTTH) services. Secondly, it will offer far higher speeds on your 5G mobile, enabling 3D and virtual reality (VR) viewing and making gaming much more exciting.  

At present FTTH is in its infancy in India with only 4-5 million households on it. Reliance Jio has ambitious plans of extending its FTTH services, although it will also use FWA. The company is currently targeting 50 million household for fixed broadband and believes that that there is a potential to bring 265 million homes on to FWA. 

However, Matthew Oomen, President, Reliance Jio, feels fibre to home is the better alternative. It is future-proof, while FWA, which uses millimetre band, might not be the best for 5G because of its low penetration. But he says that there is a place for FWA, too, and it will be used mostly in remote areas and in places where right of way (permission to dig underground) is a challenge.

The jury is still out on which model makes more business sense. Some telcos say that FWA broadband is more attractive as it is faster to roll out (no right of way issues) and far cheaper than fibre, which allows them to offer the mobile service at a lower tariff.

For would-be 5G users, one major stumbling block is the high price of the devices — over US $1000. But this problem can be overcome easily as the 4G device story has shown in India. Jio, which launched 4G LTE services, decided to offer its own reasonably-priced mobiles (which they sourced), forcing other mobile phone manufacturers to drop their prices sharply. Currently, Jio is offering a 4G phone for less than Rs 2,000. In fact, the company has already promised to come out with 5G phones at 4G prices when it launches the service.

The other big issue is that telcos will need to get returns on their investments in 5G. Based on current global trends, they are offering 5G as a premium service. Although some experts believe that Indians will not be ready to pay more just for high speeds, an Ericsson report on mobility released last week says that 66 per cent of smartphone users in the country are willing to pay a premium for 5G services. 

Jay Chen, CEO of Huawei India, echoes the same view. “Customers want better services and 4G is getting choked. I don’t see any reason why they will not pay a slight premium if they get high-speed services.”

But even if they do, the challenge is that there is no 5G-riding killer app as yet, unless you want virtual and augmented reality services. But VR and AR content is limited and the gear to watch them is still pretty expensive. Even in South Korea, which will have a 90 per cent 5G coverage by the end of this year, application development on 5G is few and far between. One baseball app introduced recently allows users to control the live viewing angle of the game.

The equation could change when B2B applications become more common, which is when users will be ready to pay more and telcos will make better margins. In India, Jio is far ahead of other telcos in trying to build a 5G ecosystem. Some time ago, the company acquired US-based Radysis, which owns a 5G-powered facial recognition software that can capture and transfer the facial video of anyone coming in or going out of  an airport. The data can be stored and used not only to identify “persons of interest”, but also to offer seamless immigration and entry and exits in airports. 

Jio is also working with Cisco to create digital public health care centres powered by 5G, where doctors can see patients who live in remote villages. 

On the whole, it seems to be clear that while 5G may not have a great impact on consumers in the short term, it promises to touch their lives in many ways in the long run.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel