While the words ‘Huawei’ and ‘5G’ have been levered apart in the UK, USA and some other European countries, the formal coming together of the RCEP [Regional Comprehensive Economic Partnership] earlier this month has laid the ground for that pairing to gain some real market traction in the other half of the global marketplace – and arguably the other half that has more scope for development and more wit with which to exploit it.
RCEP is a full-on trade agreement between the 10 countries of the Association of Southeast Asian Nations (ASEAN) - Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Brunei, Cambodia, Myanmar (formerly Burma) and Laos – and China, Japan, South Korea, Australia and New Zealand. It encompasses nearly 30% of the world’s population (2.3 billion people) with a combined GDP of around $26 trillion – roughly 25% of global trade, based on 2019 data.
Couple these raw statistics with an observation made by Ken Hu, Deputy Chairman of Huawei, when speaking at the company’s recent mobile markets and technologies conference, the MBB Forum, held in Shanghai:
We will like to explore how we can unleash the potential value of 5G and the ‘new normal’. There is one thing pretty clear about 5G. The global rollouts have entered the fast lane. As of today, there were over 100 commercial 5G networks worldwide. China has deployed over 600,000 base stations in more than 300 cities. Here in Shanghai, we already have gigabyte download speeds.
The key words here are, of course, ‘new normal’ and while no-one in the West is at all sure what that will end up looking like, round the western Pacific they have a pretty good idea already and it’s a reasonably safe bet that 5G mobile comms is going to be pivotal in making it happen. Given the size and economic power of RCEP, plus the noted innovative capabilities of many of the participants and the fact that they have, in general, handled the consequential fallout of the global pandemic a good deal better than Western countries, it is not unreasonable to assume that they will come out ahead of the West and with a far better and more comprehensive understanding of what constitutes ‘new normal’ and how to exploit it.
Playing the industry game
Hu used his keynote to set out for delegates, both in Shanghai and online, some of the lines of development and thinking they will need to consider as they start to work towards their own version of ‘new normal’, and one example in particular showed what might be possible, particularly in the world of home working.
Office work has generally been reasonably easy to transfer from an office base to home working, but heavy engineering is a different issue. But Hu cited the example of Ningho port in China where, rather than have drivers perched in small operator cabins high up in gantry cranes, they are now sited in control rooms, operating the crane remotely while sitting at a desk. This is a good example of one of the most important trends that has already emerged from games computers and mobile technologies – gamification, the use of technologies developed for playing computer games now being applied to real world applications. Coupling this with the much lower latency and greater data bandwidth available with 5G, it becomes possible to move the operative to somewhere more comfortable and safer. It also does not take too much wit to see that this could be extended to the world of home working, using similar – or indeed the same – techniques and tools as gamers are well used to.
There could even be the side benefit that current, usually young, games players will already be trained and attuned to the task of working a 3-dimensional world on a 2-dimensional platform. This could open up a whole range of factory-based tool management tasks to be operated and managed remotely, completed with a pre-trained cohort ready to take them on.
According to Hu, China has already finished the basic roll out of 5G networks, and the carriers already have some 1,000 business contracts in operation, which have so far spawned around 5,000 projects centering around the technology in various industries in less than a year, despite inevitable problems:
There is no historical experience for us to learn from. And we have to go through the trial and error phase. And it's natural for us to face challenges.
He set out for delegates some of the questions they will need to find answers for. The first is to identify the actual need for 5G as it may not yet exist. This is about identifying applications where there is a real technical relevance for 5G. For example, the bandwidth and latency requirements may call for fibre communications, but the location might make that impossible or too costly. WiFi could be an answer, but it won’t meet the bandwidth demands, particularly both Up and Down. At this point, 5G makes sense.
Another criterion is business potential and whether or not it is possible to meet – or generate – growing customer demand and meet the resultant scaling requirements using any other approach? This also should be able to work for everyone, encourage ongoing investment and nurture ecosystem development. Value chain maturity is also important. If it is mature enough, then 5G will find it easier in terms of being adopted in the industry. And last, but not least, standardisation is very important and standards-based businesses are normally a better fit to adopt to 5G. Hu said:
We find that remote control machine vision, video backhaul and real time positioning of the staff and equipment would be the four priorities worthy of your investments. We believe that as we roll out 5G in different industries, we'll see more and more difficult scenarios, we'll be able to assess them and find out more practical needs for 5G.
Another important factor is price, and Hu expressed himself happy to see the declining price of 5G modules and equipment.
The service providers are gearing up
The GSMA represents the interests of mobile operators worldwide and Mats Granryd, the organization’s Director General, used the Forum to outline the contribution its members see 5G bringing to their business (and consumer) customers. One of the biggest, despite the understandable global pessimism the pandemic brings with it, is the real potential for a kick start to commerce and industry that now exists with 5G:
Ten years ago none of us had heard of WhatsApp, Instagram, Ebro, Spotify. And companies like Tik Tok and WeChat had not been founded. That's just some of the billion-dollar companies that were built from, and on, 4G. Over the next decade a similar wave of mobile-led technology unicorns will be born from 5G and will drive our future economies. In this new era of intelligent connectivity, the combination of 5G, AI, IoT [Internet of Things] and Big Data is already changing the way we live. Each transition has typically taken roughly 10 years to mature and had a lifespan of over 30 years.
Operators, he said, are expecting to invest around $1.1 trillion worldwide between now and 2025, and roughly 80% of that will be on 5G networks as mobile operators and leading users take up the technology to facilitate faster innovation and meet new business demands. The GSMA long term expectation for consumer 5G take-up remains unchanged at a forecast 20% of the global subscriber base by 2025. A few advanced countries will be at the real forefront, with the USA and Japan at roughly 50% adoption. China will have the single largest 5G base in absolute terms, although its penetration will be lower, roughly 30%, due to its large and dispersed population.
Granryd sees 5G changing the competitive dynamics in retail commerce, where AI can be used to give a far richer, more personal buying experience when shopping for goods such as clothes and furniture, allowing consumers to see how something will look in the home:
If the experience at all is as good as, or even better maybe, than in the store we could certainly see a spike in e-commerce. It's important to know that e-commerce is a major Latin use case, also in some mobile-first markets like India and much of Africa. Now we also foresee a further reduction in the use of cash with more tap and go, both in developed markets and emerging markets, and with the significant growth of mobile money.
The GSMA has recently launched a 5G IoT for Manufacturing Forum to bring together tier one manufacturers and the mobile ecosystem. The aim is to ensure service providers meet the user requirements as Industry 4.0 becomes dominant. Granryd sees the pandemic acting as a driver for techniques such as virtualised infrastructure, open interface standards, and mix-and-match vendor solutions, which are priorities that can deliver on new capabilities.
For example, in the media and entertainment industries he expects 5G and open networking to be transformative, where operators create bespoke networks, including custom-made service level agreements and features across multiple geographies for an ultra HD experience.
This year opened with the growing furore around Huawei and 5G and looks as though it will get near to closing with the same story, except with the addendum of how the UK and Western economies generally are likely to miss out.
The important additions to this story are, of course, the pandemic and now the recent announcement of RCEP, the pan-Far East trade agreement that will certainly mean a great deal of hefty development of 5G applications for business, with a huge market keen to exploit its potential.
Couple that with evidence that the East in general has ridden out the Covid-19 pandemic far better than the West - the UK and USA in particular - and it is easy to see that RCEP members and their markets will be well on their way to building the ‘new normal’ while the West is still scrabbling around.
This ‘new normal’ will be built on 5G and that must mean that Huawei will end up with a goodly slice of the infrastructure business that makes it happen. Unless there is a change of heart in the West, it will be a while before any such new normal will appear. One has to hope that the recent US Presidential Election may bring about such a change, but no breath will be held hereabouts. That is sad, for as the Huawei MBB Forum showed, the company is already up and running on new industrial and commercial applications, and customers are already starting to use them.