What 5G Means for the Next Generation

Marc Price
May 21, 2020 INNOVATION

For all the hype that the fifth generation of wireless technology (5G) has received, it is about to become one of the major transformative forces in our lifetimes. In order to understand this, we have to step back and take a look at how previous wireless generations, 3G and 4G, have changed the way we consume entertainment, produce products, and purchase goods. Only when this is realized will we see how 5G changes everything, again.

Wireless generations occur about once a decade. 3G launched in 2001, 4G in 2009, and 5G networks emerged in 2019. Once launched, it takes some time for networks to grow to scale and become impactful upon our lives and the services we use. For perspective, let’s look at a different type of generation (the people who grew up with 3G and the smartphone) to see how it affects the way they engage in everyday life, in contrast to those who lived before.

Generation Z grew up with the smartphone. So-called Gen Zs are the children, teens, and young adults that are now between the ages of 9 and 22. Gen Z engages differently with content and retail purchases and has different expectations for these services than Millennials or their Gen X parents. Nearly six in ten Gen Z users self-diagnose overuse of their smartphones, according to a recent study. And the other four were probably too busy on their smartphones to even respond to the survey. Gen Z doesn’t watch television. They watch video on their phones. They watch movies on their phones. They binge series on their phones. And, they watch plenty of short-form viral videos that are a mystery to the generations that precede them.

The result is that video traffic is forecast to grow by around 35% annually through 2024, increasing from 27 Exabytes per month in 2018 to 136 Exabytes in 2024. This is an enormous amount of traffic and is the main driver behind the growth in mobile data, expected to climb from 60% today to 74% of all network usage in 2024, as 5G unfolds.

Gen Z doesn’t call the phone company. Gen Z doesn’t call anybody. They message their friends, interact through social media, and have zero patience for anything that doesn’t work the first time, with next to no effort to figure it out on their own. So much for the instruction manual. Welcome to the digital era.

The social impact of digital transformation ripples in a Baby Boomers crowd, is a splash with Gen X, a wave amongst Millennials, and is a roaring tide with the emerging generation of younger modern consumers. Is it any wonder my teenage daughter doesn’t know what a kitchen phone is, doesn’t understand why there are five remotes on the coffee table, can’t fathom why anyone receives bills in the mail, and can’t imagine waiting on hold to speak with a service representative?

The digital revolution, ushered in with the convergence of 3G and the smartphone, means that ordering a service, personalizing that service, and paying for the service, can all be done instantaneously with immediate gratification and no hassle. When that doesn’t work, users with these expectations will move on to another service that works in this way.

Sweeping changes in our economy are a result of these changes. The retail apocalypse of the last two years includes hundreds of store closures and numerous bankruptcies for stalwarts like Sears and Toys-R-Us, as a major percentage of retail spending moves online.

What can we predict then, for Generation Alpha, the children born between 2010 and 2025, and the first generation entirely born in the 21st century? This new generation will experience a convergence, not unlike the rise of the smartphone. In this case, 5G networks deliver a massive boost in speed and latency, and new devices are emerging that will change the ways in which our world is interconnected.

Some writers misleadingly conflate the terms “speed” and “latency.” They are not the same. 5G will feature peak speeds of at least 10 gigabits per second (Gbps). That’s more than 100 times faster than 4G, meaning you can download a two-hour movie in just 3.6 seconds on 5G, versus six minutes on 4G, or 26 hours on 3G. That’s fast, and it will further accelerate immediacy and digital interactions.

A larger paradigm shift with 5G, however, is the impact of latency reduction, which entails improved responsiveness for service interactions. Ultra-low latency doesn’t arrive until late 2020 or beyond, but it will mean one millisecond (ms) response times with 5G, in contrast with 20 ms on 4G today.

Why does it matter? With ultra-low latency, new service capabilities emerge that were simply not possible before. These include mixed-reality glasses, connected transport, and factory automation. These devices, fulfilling their potential on the networks supporting them, are life-changing technologies.

Mixed Reality (MR) is an emerging term for glasses and other devices that place fully interactable digital objects in the user’s environment. These devices harness the ultra-low latency of 5G to place text labels and hyperlinks, walking directions, and reminders in the corner of the lens. The attraction for hobbyist consumers is clear. Outdoor lovers can identify plants and animals on the go; exercise enthusiasts can monitor performance; travelers can find the nearest highly rated sushi joint. Generation Alpha may never understand why Gen Z used a smartphone at all.

The disruption in the workplace may be even greater. How long will it be before mixed reality glasses displace humans for diagnostics and repair? Why invite a technician to drive out and check out your air conditioning, heating, or water tank? With MR and a bit of artificial intelligence (AI), most diagnosis can be done without a human visit, and most repairs as well. That part was ordered automatically when your unit indicated it was broken. It will arrive tomorrow. Wear these glasses and the green arrow on the overlay will specify exactly where the part should be installed. 

Ultra-low latency networks are required for connected transport, in the form of automated busses, cars, taxis and trucks. 5G has the potential to disrupt the way people and goods travel. There are more than 225 million people driving 270 million cars in the US alone. With 3.5 million truck drivers and 8.7 million people in the profession, more people are employed as truckers than any other job in America. As low latency networks make automation possible, any disruption in either category will have a massive societal impact.

With 5G, factories become increasingly automated as robots replace industrial workers, drones augment shipping needs, and even household chores are handled by an ever-increasing number of connected devices harnessing an Internet of Things. These evolutions arguably usher in a “fourth industrial revolution” as coined by Wired Magazine, a societal disruption of epic proportions.

For Generation Alpha, how will their lives be different with a mature 5G network, harnessing 5G speeds and new emerging devices? How will these users engage differently with the world? The trend toward immediacy and greater service intimacy will likely increase, meaning impulse buying will trend upwards, while planned buying will involve deeper interactions during a decision-making process. Users will want to see how a piece of furniture fits with their existing layout via augmented reality before they buy it. They’ll want to experience the “feel” of other services via virtual reality before they make a purchase. Want a hot air balloon ride over the Grand Canyon? Try it at home first. 

Which new economic models will thrive while others are destroyed? One thing is certain; some of these models will take off and others will not. Innovative and unforeseen technologies will emerge taking advantage of these modern capabilities. This also places greater emphasis on the shifting role of the service provider in the future.

For Baby Boomers, the service provider offered voice, plain and simple. Gen X embraced messaging. Millennials loved social networking. Gen Z welcomed a shifting landscape for content distribution, with implications still being felt. These emerging needs have altered customers’ expectations of their service providers, and these models are disrupted once more with the rise of 5G networks and services. Just as pricing models went from minutes to megabytes from before the launch of 3G to the present 3G/4G moment, models will change again. This time they will encompass concepts relatable to services in this new context. The “network as a service” must reflect the agility and temporal nature of the services themselves, following customers’ expectations. Networks should be provisionable on the fly to support the immediate needs of the users and devices they support and should be priced accordingly.

Network-on-demand may be dedicated to services with common characteristics, meaning providing optimal conditions as needed for services like mixed reality, connected cars, robotic factories, content viewing, messaging, and anything else involving connectivity. And, these networks-on-demand will include personalization and be pricing specific to the services rendered. 

A new ecosystem of wholesale companies will bundle these capabilities and service guarantees into their products. Emerging models will suit modern Business-to-Consumer (B2C) markets, but also Business-to-Business-to-Consumer (B2B2C), packaging wholesale services tailored to enterprises, who in turn can manage a business for customers, harnessing the best features of the network.

In the future, businesses will monetize new services in many ways, with customers paying for the duration of a game, park visit, repair service, day or month as desired. Service agility and pricing agility will drive the marketplace as 5G empowers the service provider of the future.

In these ways, the next generation of wireless services will drive the adoption of new habits in the next generation of our children. It may be unrecognizable to us now, but the world will be more connected, more impulsive and more highly personalized in the generations to come.

Note: This article first appeared in Connect-World, November 20, 2019.

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