What it is and the value it drives
5G is the fifth-generation technology standard for cellular networks. In development since 2008, worldwide deployments began in 2019. This technology represents a leap in the capabilities of cellular networks, promising lower latencies, an up to tenfold increase in bandwidth, and the ability to support up to 1,000 times more connected devices than 4G. At its full potential, 5G download speeds could be as high as ten gigabits per second, more than current Wi-Fi.
Improved latency, bandwidth, and connection density are key to the three core usage scenarios that 5G will support:
Enhanced Mobile Broadband (eMBB) will provide high data rates across a wider network coverage area, unlocking faster internet and novel experiences with AR and VR.
Massive Machine Type Communications (mMTC) will enable connections between vast numbers of devices, advancing the vision of smart homes, buildings, and cities.
Ultra-Reliable Low Latency Connections (uRLLC) will ensure seamless communication between devices, making mission-critical applications possible in industry automation, connected vehicles, and others.
The primary impact is that more data can be consumed by more devices: on one hand, more devices can send data back to centralized platforms, thus providing more granular insights; on the other hand, more devices can receive more frequent and complex instructions, effectively enabling "intelligence at the edge". This dense information exchange will bring about more pervasive and smarter control of homes, buildings, cities, and vehicles.
Japan is poised to be among the global pioneers of 5G technologies, and adoption is very likely to grow quickly as coverage and the range of available services increase more 5G-capable devices such as smartphones become available. Japan expects all prefectures to have access to 5G by the end of 2020, and to achieve 98% nationwide coverage by 2024, across all operators.
Where it is today
In 2020, the 5G market was beginning to emerge, with 16 million 5G subscribers globally, compared to 5.2 billion for 4G, according to the World Cellular Information Service. Of these 16 million, 15 million are in China and South Korea, the only markets with substantial 5G operations. Japan launched its first 5G services in March 2020, with an initial 20,000 subscribers, in contrast to the existing 150 million 4G contracts.
Of the three core 5G services (eMBB, uRLLC, and mMTC), Enhanced Mobile Broadband is already available and delivering value at the time of this white paper. In South Korea, several B2C applications have already been launched to drive interest in 5G, from high-definition sporting event broadcasts, to multi-live karaoke services and AR-based games with famous characters or pop stars.
Connected buildings. Digital indoor systems encompass technologies such as air quality monitoring, smart energy consumption, building security, predictive maintenance, and intelligent parking. The sheer number of connected devices required in such scenarios is too large for Wi-Fi networks to support, but 5G will provide sufficient capacity. In residential buildings, manufacturing plants, or even campus-sized factories, Building Management Systems (BMS) require large arrays of sensors connecting to a centralized management point: improved network capacity and bandwidth will allow smooth data transfer and access to cloud-based services. In China, Haier, the world's largest white goods manufacturer, developed a proof of concept for a 5G-enabled factory with GSMA, China Mobile and Huawei: 5G networks are used to transfer high volumes of image data exchanged by robot arms in the assembly line.
Automotive. Reliable 5G networks will be able to support innovative solutions to both consumer and enterprise use cases in the automotive sector. Autonomous vehicles are gaining popularity in road transportation and in warehouses, and 5G will allow them to receive and send constant granular information across fleets, improving safety and reducing travel delays. Cars could provide in-vehicle infotainment through internal Wi-Fi networks connected to the outside world via high-speed 5G connections. At the time of writing, Baidu had just demonstrated its Robotaxi service, branded Apollo, powered by 5G-connected driverless cars.
Retail. Intelligent stores, more efficient supply chain management, personalized experiences: 5G has the potential to redefine retail. Operationally, 5G-connected IoT devices can track the status of the supply chain and closely monitor store stocks, with AI-managed unmanned "autonomous stores" now in sight. Consumers will also be able to enjoy new experiences with AR "magic mirrors" for clothes fitting in stores and at home.
Healthcare. There is a lot of excitement on the potential for 5G applications in healthcare, from telemedicine to remote monitoring, and even AR/VR clinical training solutions. Telemedicine, the remote distribution of health services, requires the real-time, high-quality video that eMMB can provide, without slowing down the hospital's network. The Internet of Medical Things (IoMT) has the potential to reduce hospital costs, and healthcare providers have already began focusing on wearable solutions, which will enable preventative care and remote patient monitoring. Nokia partnered with the First Affiliated Hospital of Zhengzhou University to explore intrahospital use cases (e.g., mobile ward rounds and mobile nursing), as well as interhospital and home consultation and treatment.
Media and entertainment. Enhanced broadband will allow users to enjoy high-quality media on the go and at home, as well as novel media formats, such as in-car entertainment, 3D holographic displays, and Augmented Reality. Moreover, enhanced modalities for mobile advertising will emerge, such as in-game or AR-powered messages appearing to users based on their location. In 2019, SK Telecom unveiled its AR technology on the opening day of the professional baseball game at Incheon SK Happy Dream Park, projecting a dragon in the middle of the stadium via display screens and viewers' smartphones.
Home automation. Massive machine connectivity will boost smart home adoption, by enabling more devices to seamlessly connect with each other in a secure way. 5G wireless networks are expected to provide a common platform for interoperability, while high speeds and low latencies will deliver a seamless smart home experience with AI voice assistants.
How the technology will continue to evolve
Worldwide deployments are planned or underway, with 92% of global mobile operators planning to deploy by the end of 2022.
5G spectrum allocations have taken place in over 40 countries, and about 30 more countries are expected to follow by the end of 2020. The completion of spectrum auctions is expected to accelerate network investments in Europe and APAC.
Worldwide deployments face both systemic and intrinsic obstacles. From a systemic perspective, the COVID-19 pandemic caused delays in several countries; moreover, a McKinsey survey of global operators reveals concerns that geopolitical uncertainty could delay deployments by six months or more. The investment capacity of individual operators varies significantly by region, and in particular operators in Europe may delay significant infrastructure investments.
Massive Machine Type Communications and Ultra Reliable Low Latency Connections are regarded as critical technologies for massive-scale Internet of Things deployments, but have not been operationalized yet. Ericsson expects consumer 5G use cases, from health wearables to home sensors, to go mainstream within two or three years of 5G deployment.
Finally, tools and solutions to secure 5G networks across the stack will also continue to evolve. It is essential that 5G network owners maintain constant real-time visibility of traffic and have the ability to detect and stop in real time cybersecurity threats within that traffic. Authentication of devices and users, access control (based on sensitivity or criticality), network segmentation, and secure containerization also are important. Companies like Palo Alto Networks provide consistent security enforcement across cloud-native 5G cores and distributed edges. In 2020, Palo Alto Networks introduced the industry’s first 5G-native security solution, offering the most granular security for highly distributed, cloud native 5G networks, including containerized 5G security, real-time correlation of threats to 5G identifiers, and 5G network slice security.
The key future applications
From a consumer perspective, Japan is expected to become one of the earliest adopters of 5G at scale, given its past track record in achieving high penetration for both 3G and 4G. Once more 5G-capable smartphones are available, consumers are expected to quickly embrace the new network, without requiring particular feature or price incentives. Moreover, Mobile virtual network operators (MVNO) will make lower-cost opportunities available, thus catering to a broader range of consumers. Finally, the presence of strong domestic radio equipment providers removes the risk of geopolitical uncertainty affecting deployments.
As for the industrial sector, Japan is well primed to deploy novel applications: allocations of private spectrum have already been auctioned to various industrials, such as Mitsubishi, which began testing of experimental installations in 2020.
There are two industry categories where 5G applications would bring most value: sectors of critical importance domestically, and those with significant international exposure.
In the former category, rail and construction show great potential for improved efficiency and safety. 5G-powered railways would make it possible to monitor and control trains and tracks remotely: drivers will have more visibility to manage incidents, and will be able to operate multiple trains simultaneously, which will significantly reduce operating costs for lower-usage lines. In 2019, DOCOMO and the Central Japan Railway Company achieved the world's first 5G communication between a bullet train and a base station.
In the construction industry, 5G connectivity could unlock significant savings by increasing the efficiency of machinery such as cranes, backhoes, and crawler dumps. Once deployed at a site, these machines often sit idle for long periods: if operators were able to seamlessly control them remotely, they could work on multiple sites throughout the day, thus maximizing workforce utilization. In a joint effort, KDDI, Obayashi, and NEC demonstrated the deployment of 5G-powered construction machines in Osaka prefecture.
In the latter category of export-heavy industries, automotive presents several use cases for 5G. In particular, autonomous vehicles will rely on vehicle-to-everything (V2X) communications based on 5G, to constantly monitor their surrounding space for other vehicles, buildings, and people. While the main benefits of autonomous vehicles, namely increased safety and traffic optimization, may only have marginal impact on Japanese traffic, self-driving cars will soon become a reality worldwide, and Japanese manufacturers should prioritize this development to remain competitive against foreign players that are already making serious advances, such as Tesla. Since 2017, Toyota has partnered with NTT to expand car connectivity features from 4G to 5G, and pave the way for autonomous cars.