Between Futurism and Scepticism: What Does the Future Hold for 5G?

At the top of the list of the technological promises most often mentioned in the media, the upcoming deployment of 5G wireless networks is somewhat reminiscent of the enthusiasm surrounding virtual reality, wearables and chatbots these past few years. The Consumer Electronics Show, which each year showcases the present and the future of technology, went so far as to proclaim 5G the “buzzword of the year” in 2019.

The speculative narrative surrounding the implementation of this new-generation network is sometimes almost the equivalent of science fiction. Particularly in the media field, where the transition to digital distribution channels is just about complete, the countless promises of 5G could very well quite radically transform the global competitive landscape, from market structures to telecommunications companies as well as content producers.

What is the impact on the media?

In a recent article (in French) published in the INA’s Revue des médias, columnist Jean-Paul Simon identifies a certain number of potential uses explicitly in the media field.

Apart from download times that are much quicker than they are with a 4G network—5G promises download speeds anywhere between 10 to 100 times faster—, the main usage scenarios identified by Simon take advantage of the shorter latency made possible by 5G technology. Latency is the time between an action and the triggering of a reaction which is, in an interactive context, the key to the perception of simultaneity and, therefore, a quality experience.

Think of immersive reality experiences based on virtual reality or augmented reality or yet again of video games that could be played in streaming mode with a console (that’s the promise made by Google’s Stadia initiative). Even production, creation and editing operations could unfold in real time, for example, on remote terminals.

5G even goes so far as to put back into question the devices and accessories that are necessary today to distribute and consume digital content. Indeed, 5G eliminates the need for many intermediary devices such as modems, connected boxes (e.g., Apple TV) and home gaming consoles.

This technology makes it possible to quickly activate or deactivate an access without having to call upon a residential technician, you know, the one scheduled to drop by tomorrow anytime between 8 AM and 8 PM.

It therefore has the potential of disturbing the entire value chain, including, of course, telecommunications companies that are today key players in the media industry—often in several capacities.

The eternal techno-optimism trap

Although all of this is promising and exciting, don’t expect it to be ready tomorrow. According to the different scenarios contemplated, the rate at which 5G will be adopted at a global level could vary between 14% and 49% by 2025, i.e., six years from now. In the world of large corporations, such a timeline is reasonable, if not tight. However, at the current rate technology is evolving, it may seem particularly long.

Although it is important to follow the rhythm of technological transformation, the transition toward distribution and interaction models that take advantage of the accelerated capabilities of 5G will not necessarily be in place in the immediate future.

Canadian researcher Duncan Stewart, author of the annual TMT (Technology, Media and Telecommunications) report, points out that the penetration of 5G-ready mobile devices should not account for more than 1% of total sales by the end of 2020.

In its famous Hype Cycle, Gartner (a research firm) locates 5G right on the “peak of inflated expectations,” meaning that we are far from no longer hearing a lot about it. According to these two references, however, we are still years of potential development away from observing an actual productive contribution to the real media economy.

This technology’s expected distribution will also be an essentially urban phenomenon. For it to function efficiently, 5G will require the installation of several million antennas throughout cities, a reality that could degenerate into conflicts between competitors or even raise certain issues involving the appropriation of public infrastructure for the purpose of establishing private networks. In the case of smaller cities and rural or semi-rural regions, 5G could very well remain an inaccessible dream for yet another decade or more… At a time when 50% of the world’s citizens are considered as urban dwellers, that nevertheless means that “the other 50%” will probably not have access to 5G connectivity.

Along those lines, the Electronic Frontier Foundation issues a warning to policymakers: the massive investments required by this technology, coupled with the need to coordinate complex contracts with public authorities to be able to deploy these millions of terminals, will most probably lead to decreased competition and accentuate the oligopolistic positioning of telecommunications companies.

The recent acquisition of Intel’s 5G division by Apple, in exchange for the sum of US$1 billion, is testimony of this anticipated transition toward a new concentration of power.

Canada, one of the countries where Internet access is the most expensive on the planet, should look into this eventuality.

The situation in Canada

In Canada, the auctioning of a first 5G spectrum enabled the Canadian government to collect 3.5 billion dollars. A second auction is scheduled for 2020 and could generate even more in revenue according to the Financial Post.

Although many believe that Canada is lagging when it comes to the deployment of this leading-edge technology, everyone agrees when it comes to predicting one of the highest rates of adoption of the technology on the globe by 2025.

Canadian media companies have the opportunity to seize these changes in anticipation of new types of content, new types of support and new business models that benefit from an increased rate and interactive possibilities increased tenfold. However, there is serious work to be done to differentiate the probable economic reality from technological fiction.

Francis Gosselin
Francis has a doctorate in economics and is a multipreneur. Associated with the Sage Consulting Group since 2018, he is also the president of Norbert Hill and chairman of the board of directors of FailCamp, an NPO dedicated to promoting entrepreneurism and apprenticeship. He has worked as a consultant in the fields of education, media, real estate and financial services for clients such as Ubisoft, École des sciences de la gestion (ESG UQAM), Radio-Canada, Lune Rouge, BNP Paribas, Allied Properties and the Institut de Développement Urbain. He is a staunch believer in the virtues of social and philanthropic engagement, sits on the board of directors of the MUTEK Festival and is a member of HEC Montréal’s Club of 100 young philanthropists. Since 2012, he raises MIRA dogs for the benefit of people in need and contributes financially to this important cause.
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