Is 5G Utopia Or Hype?

According to Accenture, “the impact of 5G on the U.S. economy will drive up to $2.7 trillion in additional gross output (sales) growth between 2021 and 2025.” Their modelling analysis says it will add nearly $1.5 trillion to the country’s GDP and will potentially create 16 million jobs.

Every country in the world is building its infrastructure to launch 5G, many companies have been preparing products for it. 61 countries have commercial 5G networks up and running according to the Global Mobile Suppliers Association. Each one of them has multiple mobile operators who have spent billions bidding for spectrum freed up by governments and upgrading its infrastructure. In India, the three mobile networks Reliance Jio Infocomm Ltd., Bharti Airtel Ltd. and Vodafone Idea Ltd. are all testing 5G capabilities but are waiting for the government to open biding and allocate spectrum. That hasn’t stopped them from incessantly talking up 5G and the utopia that lies ahead.

If you were to believe the hype – and there’s a lot of it going around – 5G is expected to leapfrog connectivity many times over and will have a big impact on several industries from healthcare and mobility to media and entertainment, and even energy.

It will link everything from autonomous cars to electronic appliances like your washing machine and your toaster bringing the promise of ‘Internet of Things’ from presentation decks to reality.

In the race to connect the world – and collect all that valuable data – this new cellular technology has also gotten extremely political and divisive. China is a pioneer and leader in 5G and its adoption. Bloomberg recently reported that it has rolled out the largest and most sophisticated 5G network in the world spending $1.4 trillion. It is, however, increasingly being isolated with its biggest equipment manufacturer Huawei losing contracts in the West. Yet, China is likely to play a big role in introducing the technology to a lot of the developing countries.

The Last 15 Months In A 5G Ecosystem

I live in Hong Kong, one of the earliest to launch 5G services last year in April. Most of the telecom operators have launched 5G commercially and widely with coverage spanning the city as data from Opensignal shows below.

I use a 5G phone on a 5G network and in fact, we use a 5G mobile sim router even for our broadband. While, thankfully, our washing machine or kettle or Smart TV hasn’t come to life yet, we do live, more or less, in a 5G-connected world.

Download speeds of video, for instance, are faster and quality a tad better.

As I write this, I’m watching the European football championships on my Smart TV that’s connected to our 5G/LTE Sim router. It’s faster, clearer, and better content delivery. If you are a gamer, (I’m not), it’s even more noticeable.

The Media and Entertainment Services Alliance says - “The leading 5G technical advantage is more bandwidth — much more bandwidth, with some estimates showing it having 10 times more than 4G.”

This is also enabling faster digitisation and interconnectivity of everything from payments to healthcare to government services in these smart cities.

What Does It Mean For The Media Business?

Every new generation of the mobile network has unleased a new cycle of innovation. 3G brought in the mass adoption of smartphones - the internet in your hand. This led to the growth of social media giants like Facebook Inc. and Twitter Inc. 4G was introduced (in the U.S.) in 2010 and the faster speeds a drove the adoption of digital streaming, live streaming, video chat, etc.

Similarly, 5G will bring its own wave of disruption.

One thing is certain that the faster connectivity and lower latency will almost certainly accelerate the shift to streaming. And the media industry seems to be preparing for it.

A few weeks ago, we saw a big merger between Discovery networks and Warner Media, which owns HBO Max. One of the reasons for the merger was the intensifying streaming war with Netflix and Disney Plus. Every American media company is pivoting to streaming as 5G makes it ubiquitous and (cable) cord-cutting continues unabated. Even Comcast, which has built its empire on cable, is now investing in streaming while their broadband business continues to grow and they expand into 5G.

Even sport, which has propped up Pay TV for years, is making changes to adapt to a streaming future. Amazon.com Inc., for the first time, won the rights to European football and has been snapping up sports rights across the continent. Already 4G LTE is being increasingly use for live production in the U.S. in sports, news, and music -- 5G will enhance this, make it cheaper and more efficient.

This will all likely happen in India too, soon.

India has hundreds of television channels. Connectivity and bandwidth limitations have helped the traditional TV business remain strong. 4G moved the needle somewhat, 5G may very well be the tipping point.

Disney’s Hotstar and Amazon Prime’s growing user base is an example of how video consumption is moving to streaming. Reliance Jio, which attracted nearly $20 billion in investment last year, has laid out plans to integrate and stream content on their mobile networks and expand into e-commerce, payments, etc.

Another big gainer from 5G adoption is likely the creator economy - where the creator is connected directly to the consumer via platforms.

I had written about it a couple of months back and since then more than $2 billion dollars in investments have gone into creator funds. Everyone, from Facebook and YouTube to Snap and Tik Tok, has been investing heavily in tools and creating funds to incentivise creators to use their platforms. Creator-led video and audio are seeing a big boom and this will likely become more prominent with increased bandwidth and speed.

There’s a new creator platform launched pretty much every week to meet this demand.

But I caveat that many of these capabilities of 5G are overstated, at least for the moment. It will be a while before it gets to its full capability in high band everywhere.

A New Technology Wave

The ubiquity of video streaming + 5G will transform user experience. In the last couple of years, platforms have already invested in virtual reality and augmented reality. Currently the use cases are small (and expensive). But increased speed and bandwidth will make these more usable and eventually more affordable.

Facebook, for instance, bought VR headset maker Oculus way back in 2014 and has, in the past few months, been buying up VR companies like BigBox, Downpour Interactive, and a few others, most of which create content for Oculus, which itself has been folded into Facebook Realty Labs. It’s believed over 10,000 people work on VR tech for Facebook, which tells you how serious they are about the business. While its two versions Quest 1 and Quest 2 are mostly for gaming, soon it could serve other content.

Just a few days ago, Facebook was planning to launch targeted VR ads on the Oculus platform though the ad partner pulled out at the last minute because of user backlash.

Snap, has been steadily adding augmented reality capabilities to its app and has already introduced AR-led shopping experiences.

Apple, Alphabet, and Amazon are making big bets on AR, VR, and connected devices, all on the back of 5G.

And there’s the entire infrastructure for all that to be built. Google just announced a collaboration with equipment manufacturer Ericsson AB to offer 5G cloud computing solutions for areas such as VR, robotics, etc.

These are only the beginnings of applications for the new 5G world and there will likely be several innovations we can’t foresee at the moment. But this hyper-connectivity is a double-edged sword.

For now, at least from my experience, 5G seems to be just an improvement in speed and bandwidth. It hasn’t changed the way we consume content on the network and neither has it dramatically changed the devices themselves.

Experience often lags technology by a few years. But even as less than 20% of the world is connected to 5G, a geopolitical race is already on for 6G, that’s supposed to be 100 times faster. It’s meant to herald a sci-fi world of holograms, flying cars and connected brains... the Internet of Everything.

I would be lying if I said it sounds promising rather than downright scary. All we were asking for was faster internet.

Parry Ravindranathan is a global media executive and has worked for Bloomberg, Al Jazeera English, Network18, and CNN.

The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.