The next generation of wireless technology — 5G — will be a game changer for the global economy. It is the foundational technology that is instrumental for the development of other revolutionary applications, such as self-driving cars, massive Internet of Things (IoT), smart cities, augmented and virtual reality (AR/VR) and mission-critical services.
This is because 5G is faster and has higher connection density, which means it can handle immense numbers of connected devices, according to the US-based tech giant IBM.
5G can be up to 100 times faster than 4G, according to PwC, and it has ultra-low latency, which refers to the time taken for the network to process a request.
Additionally, 5G can be used to transform industries like manufacturing and healthcare, resulting in cost savings while creating new digital industries. Based on Accenture’s economic modelling analysis, the impact of 5G on the US economy will drive up to US$2.7 trillion (RM11.1 trillion) in additional gross output growth between 2021 and 2025.
The report, published in February, estimates that 5G will add up to US$1.5 trillion to the US gross domestic product and has the potential to create or transform up to 16 million jobs across all sectors. This growth is achieved through the creation of new industries and sub-industries that require high bandwidth and IoT, cost optimisation and product or service quality improvements.
Another report by KPMG in 2019 estimates that US$4.3 trillion in value can be unlocked by 5G across major industry verticals. The firm derived this number by analysing how 5G use cases can address challenges faced by specific industries.
While these numbers are not specific to Malaysia, the use cases and potential of 5G can be applied to industries in Malaysia and potentially derive similar outcomes.
Technical capabilities of 5G
5G is considered to be the foundational technology that can enable other technologies to communicate. According to Accenture’s report, the development of 5G has supported three major advances in connectivity.
The first is enhanced mobile broadband, which refers to the bi-directional transfer of high-definition video and high-volume data. If this kind of content can be transferred at high speeds, it allows applications like AR and VR, as well as computer vision and machine learning, to become a reality. These applications require the transfer of high-definition videos at high speeds.
Secondly, 5G can provide connectivity to potentially one million connections per square kilometre. This supports the implementation of advanced industrial IoT applications, as large networks of sensors can be deployed to collect data. This data is crucial for the application of artificial intelligence (AI) in analysis and decision making.
On a larger scale, this enables the existence of smart cities, where everything from traffic lights and bus stops are equipped with sensors and connected.
Thirdly, mission-critical services such as healthcare and automated vehicles require a reliable and high-speed connection, which is possible with 5G. According to Celcom, the use of 5G in self-driving cars allows for the immediate processing of data from hundreds of sensors, which is equivalent to two million gigabits of data. That would not be possible with 4G.
Meanwhile, the healthcare industry will be disrupted with the use of wearables to enable remote consultations, remote surgeries and other digital health innovations.
How 5G will transform industries
The use of technologies like IoT, AI, AR and VR, which are enabled by 5G, can create new products or revenue streams, save costs and increase resiliency in various industries. It can also transform businesses to be more agile and flexible.
For instance, the KPMG report presents a case study of how 5G can transform the manufacturing industry. Currently, many factories are run on a linear process, where machines are pre-set and managed by people.
When the machines break down, they can be costly to repair, and the process does not encourage a quick response to changes in the external environment.
Deploying 5G can make the process more dynamic and agile. Equipped with sensors, managers will know how the machines are performing and conduct preventative maintenance when required. With AI-based planning, they can create self-regulating and self-adjusting processes.
Accenture estimates that 5G-enabled factories can see up to 20% to 30% in overall productivity gains, including improvements of 50% in assembly time and 90% in defect detection.
In the healthcare space, 5G will enable the industry to be more predictive, preventative, personalised and participatory, says PwC. With technology such as connected devices or wearables, doctors can make decisions based on real-time data, while patients can monitor their wellbeing and take action to improve their quality of life.
In the automobile and transport sector, new connected vehicle technologies have the potential to reduce the severity of non-impaired crashes by 80%, estimates Accenture, save US$3.6 billion in collision costs and reduce traffic by 25%.
Fitch Solutions Country Risk & Industry Research also mentioned in a commentary last September that fast and dense wireless networks with minimal lag are mandatory if self-driving cars are to be introduced in a safe manner.
In the retail sector, 5G can enable video streaming experiences in store, supporting up to a 50% increase in sales growth when combined with human-focused processes and XR (extended reality, a term that covers virtual, mixed and augmented reality) visualisations, says Accenture.
Other use cases in the retail sector include the use of digital mirrors that recommend matching outfits to customers or fitting rooms that allow customers to try on new looks without changing, suggests US telecommunications company Verizon on its website. These applications require high-speed connections and the transfer of huge amounts of data.
Smart shelves can also automatically gauge inventory weight and send purchase orders to vendors. Meanwhile, RFID tags on products and scanning devices that automatically log product information to charge activated digital wallets eliminate the use of checkout lanes. 5G will also play an important role in warehouse management for e-commerce platforms, observes Verizon.
As for utilities, 5G can enable the use of drones and unmanned aerial vehicles to inspect energy or utility assets using high-quality video and accurate video analysis, says Verizon. Accenture estimates that transmission line monitoring using smart sensors and drones can reduce wildfire risk, potentially saving billions of dollars.