Brands are quick to get excited about the possibilities that connected cars and homes, virtual reality, artificial intelligence and drones can offer, but all of this technology requires network capability. It is important, therefore, that brands think more about the business case for investing in any new technology and the capabilities required to avoid being blinded by the hype.
One area to watch is the rush to 5G, which dominated the headlines at Mobile World Congress (MWC) in Barcelona last week. While it will be hugely important in the long term, brands shouldn’t fast forward too quickly without exploring all the opportunities 4G has to offer.
Kester Mann, principal operators analyst at CCS Insight, says: “5G was one of the big themes at MWC – it has been for the last three years now – but it’s disappointing as a lot of things such as the Internet of Things and virtual reality can still be well-served by some of the 4G networks.”
Brands including Nokia, Samsung, Verizon and AT&T all talked up their 5G plans. Nokia CEO Rajeev Suri unveiled 5G First, a commercial offering for carriers eager to be the first to meet the demand for faster connectivity that will be available in the second half of 2017.
The move is part of Nokia’s business strategy to expand into sectors including healthcare wearables, virtual reality and connected devices.
Nokia CMO Barry French, says: “There are many different operators with different strategies but [a lot] of them believe they’ve done what they can do with the base connectivity.”
He adds: “That is their core competence but they want to go increasingly into value added areas as the world moves to ‘everything connected’. Someone has to not just connect those devices but make sense of all of them. The operators are in a good position to do that.”
[There is still] quite a bit to be done in terms of the quality and the coverage of the [4G] networks before we start thinking about some of the super-fast speeds that 5G is going to enable.
Kester Mann, CCS Insight
Samsung was another key player pushing 5G. At a keynote speech it revealed plans for the UK trial of its 5G network to deliver on commitments to the Internet of Things and connected devices.
Meanwhile, culture secretary Karen Bradley set out the government’s digital strategy last week, which includes a greater focus on connectivity and the roll out of 5G as Bradley says the quality of connection is what matters the most, not the means of delivery.
Take a step back
But companies must be careful not to get ahead of themselves. Before looking at 5G technology brands should focus on what can be done with 4G connectivity.
Although MWC was largely about 5G, Mann says “some of the people that attended the event missed the point that a lot can be done with 4G as well”. However, he adds “in the very long term 5G will be necessary to connect all the billions of devices” that were on show.
In 4G Mann says there is still “quite a bit to be done in terms of the quality and the coverage of the networks, particularly in buildings and rural areas and across transport infrastructures before we start thinking about some of the super-fast speeds that 5G is going to enable”.
Nokia has said it is looking to boost 4G connectivity in London through a new partnership with Telefónica and Suri predicted that investments in 4G, particularly advanced 4G technologies, will pick up again in key markets. He said: “Even [with] 5G coming, the need for more capacity grows everyday with no sign of slowing.”
5G has the potential to drive new opportunities and brands are investing in parallel industries and markets because of it. However Mann says: “It’s all very well the investment in the technology and saying how fantastic 5G is but we are still struggling from a provider or operator point of view [on] where the use case is going to be, what the business models are and where the money is going to be created to justify these investments.”
Instead of being wowed by the next big thing, brands should think about what can happen now, how processes can be improved, and when looking at new technology to invest in, think of the end goal rather than buy into the hype.
Collaboration is key to 5G
Everyone wants to be first but pushing forward on making 5G a reality requires businesses to work together. Although 25 mobile operators have announced they are lab-testing 5G, the consensus among speakers at the Global 5G Test Summit during MWC was that it’s important to give other industries a taste of what’s coming with 5G so they can explore new use models and applications.
Speakers at the summit including China Mobile, AT&T, Huawei, Vodafone and Intel said early testing could help brands understand the actual requirements of various applications.
This might create a step-change in how sectors work together. However, Vice’s CEO and co-founder, Shane Smith, said that whenever it tries to do something different people “try and stop you every step of the way”. He urged sectors, both traditional and digital, to break down the “old barriers” or risk “what happened to the music industry” and end up “holding on to an ever-shrinking piece of the pie”.
Greater collaboration, a well thought out brand strategy for investing in new technology, and fixing current capabilities and demand for services such as 4G, are therefore required before leaping to 5G and connected everything.