5G: Friend or Fallacy?

5G is hailed as a huge step forward in connectivity

Hypothetically, it should allow immediate access and immediate decisions. Due to its capabilities, it is seen as the future of the internet and of commerce: a future where VR and AR come as standard and communication is instantaneous.

While the clamour for the next-generation of mobile broadband reaches fever pitch, is it really all it’s cracked up to be? It’s time to tell some truths about 5G:

1. 1. Niche use cases

The next step in mobile data technology promises faster downloads, higher capacity and lower latency for users of high bandwidth services.

Higher capacity is ideal for densely populated areas where demand is stretched. 5G could, therefore, add an extra dimension to live entertainment. Sports stadiums and music festivals could launch “second screen” applications, giving users a more hands-on, engaging experience.

While it will be very useful in these situations, 5G is most definitely not the answer to all broadband and internet needs. While it has huge potential, it cannot magically travel vast distances, struggles to penetrate buildings or walls, and is not a direct replacement for wired connections.

In even the best-case scenarios it would be an addition to – rather than replacement of – wired connections.

2. Adding to complexity – 5G muddies an already complex market.

The new network consists mainly of two wireless technologies – mmWave and 60GHz – which have varying characteristics and applications. Given this complexity, consumers will likely have to use a combination of 4G and 5G technologies in their day-to-day lives for the foreseeable future. This alone means that 5G will have limited use even in developed markets.

3. 3. Extensive infrastructure demands

5G has a smaller range than other technologies, meaning many more and smaller base stations will need to be created.

There is set to be a big battle about how to install tens of millions of new micro-base stations to make sure people can get the reliable signal that is the foundation of any modern network. This will cause problems, add to costs and ultimately extend the implementation period.

The rollout of Australia’s National Broadband Network (NBN) was hugely delayed due to underestimating the cost and logistics involved. The municipal work required cables to travel through conduits under streets and in sewers and negotiations with Telstra to piggyback on their physical infrastructure and street furniture, as well as finding skilled workers with the right mix of skills and experience in the new technology and closing busy city centre roads and thoroughfares. This was a huge undertaking in terms of organisation.

A few weeks back, Verizon’s CEO said that 5G is “not a coverage spectrum” i.e. it won’t be available outside cities. T-Mobile was even more candid, saying that 5G would never reach rural America.

There is a silver lining for some specific rural areas, namely those that contain successful industry. Such areas can satisfy a business case for the role out given the lower cost and dramatic increase in connection speeds. This in turn could lead to more digitally depend businesses moving out of the cities.

4. 4. Ready to go?

You’d be forgiven for thinking 5G is just around the corner – it’s not.

For the vast majority of brands, 5G is a way off. It’s likely to be years until the technology is accessible and 5G devices become mass market.

Moreover, the 5G standard isn’t finished. Companies are struggling toward this, but the reality is there isn’t a single functional public 5G network in the world right now. Many of the big telcos will be over the moon to get even a single handset up and running right now.

So just bear in mind that 5G is like virtual reality – it is there, but not in the way portrayed by some brands and the media.

5. 5. Still a big bet for brands

The benefits for a typical consumer are unclear, the costs are high and there may well be security and privacy implications.

Companies should instead be looking to improve their digital platforms, with technology and systems that can be analysed and systematically improved. For the vast majority of companies, looking at new regions and channels will prove more profitable for the foreseeable.

Like many new technologies, 5G provides opportunities, but to build online and in-store experiences on its potential would be perilous for all but the largest companies.

About the Author

Richard Mathias is Hybris Practice Lead EMEA at LiveArea. LiveArea is an award-winning global commerce services provider, blending strategy, design, and technology to bring digital commerce to life. We deliver a holistic portfolio of digital commerce services to elevate brands and remove friction from every interaction.