Boardroom Briefing: What Directors Need to Know About The 5G Future
July 23, 2019
There is a daily deluge of headlines about 5G which country or company is in the lead; whether security fears are overblown; and whether predictions about how it will change the world are too conservative or aggressive. For boards of directors, who need to be up to speed on all the disruptive forces affecting their companies, much of the coverage can be deep in the weeds.
For a quick overview of the key issues, I spoke to Satish Dhanasekaran, senior vice president of Keysight and president of Keysight Technologies’ Communications Solutions Group, who advises companies on how to take advantage of the opportunities afforded by 5G. He shared smart insights on what the new technology means for long-term strategies.
Boardroom Briefing: What Directors Need to Know About The 5G Future
Q. Take us inside the boardrooms of American companies across a range of industries. What would you advise directors in terms of how they should be thinking about 5G?
A. The conventional thinking is 5G is another technology that helps smartphones go faster. This immediate application is just the tip of the iceberg. The availability of 5G infrastructure will create opportunities for tremendous automation and productivity improvements that will transform market value streams and associated business models.
As a result, we should expect established competitive positions to be challenged and possibly the emergence of substitutes. To take advantage of this inflection, three areas are worth highlighting. One is the business model. Revisiting the company’s business strategy in the context of the new technology could unlock new opportunities for growth and expansion.
Second is the investment strategy, and ensuring early and adequate investments are made to build out the technology stack needed to accelerate business goals. The right resourcing can create a first-mover advantage or allow the enterprise to expand into new markets. From our experience, it takes commitment to build the platforms through a combination of organic and inorganic initiatives.
Third is people. Leaders need to assess the people they have, and whether they have the skills needed to take advantage of the new technology. And the culture needs to change, as well, as the pace of innovation accelerates, with agile, adaptable practices. These cultural and systems implications need to be factored in for the initiative to be successful.
Q. Let’s make sure we have the basics covered. What is 5G, and why is it important?
A. 5G is the next-generation wireless communications technology standard. Think of 5G as an umbrella term for many revolutionary technologies that will make networks faster, ubiquitous and customer-centric, with new, mission-critical business applications that will be invented to take advantage of them.
“5G will drive a transformation that’s akin to what our society experienced when the first railroad and highway systems were developed.”
5G will drive a transformation that’s akin to what our society experienced when the first railroad and highway systems were developed. Highways help connect societies, promote trade, and they have an economic impact. Think of 5G as providing that impact in this new era of digitization – in effect, there will be more lanes, faster lanes and more configurable lanes on demand.
Q. The word “latency” comes up a lot in discussions of 5G. What does that mean?
A. In short, latency is a measure of responsiveness and robustness of the communications network. It is also defined as the time for information to travel across the network from point A to point B and back. We have all had the frustrating experience of surfing the web with higher latency and pages taking forever to load.
The faster and more reliably data can be transmitted end to end, the more you can guarantee performance for critical applications, so latency improvement is an essential goal for 5G systems. With early deployments of 5G, we are already witnessing breakthroughs in latency performance compared to today’s 4G/LTE networks.
Q. What’s required to make the 5G upgrade happen?
A. As I alluded to before, the goal of 5G is to significantly improve every aspect of a communications infrastructure — latency, speed, reliability, density, data rates, energy efficiency and security — while lowering the overall cost. This does mean a comprehensive end-to-end overhaul to the communication systems that will take three to five years to achieve on a global scale. It is an exciting time, with so many innovations being deployed in parallel and at an unparalleled pace.
Q. What is the biggest threat to realizing the potential of 5G?
A. While the ecosystem has moved fast, realizing the full potential of 5G will take time, and significant technological and commercial challenges remain. However, the biggest success factor lies in maintaining the collaborative fabric of the global technology supply chain around the world. If there is fragmentation of the underlying technology – say, by different parts of the world going separate ways – that could slow down the adoption, increase costs and potentially lower the impact. I wrote about it during MWC19 in Barcelona.
Q. What are the most common misconceptions about 5G?
A. The first one is that it’s just about making your smartphones faster. Its implications are a lot more profound, and there are some projections of economic impact of 5G in trillions of dollars. Over time, the 5G network infrastructure will enable new applications that will be key to sustainable, modern society.
The second is the view that 5G is a one-time event. We think of 5G rolling out in many phases with incremental capabilities in each phase. It will take a decade to fully realize the impact, but the train has left the station and we are well on our way.
The third is linked to business-case skepticism. It’s not unlike what was thought in the earliest days of smartphones – “What will I do with a web browser in a small device? The screen is so small.” Once the infrastructure is built, there is huge potential for use cases to develop that we haven’t yet anticipated.
Q. Is one country going to emerge as a winner ahead of others?
A. There is a race to be first. First movers can gain asymmetric advantages with intellectual property. With 5G, there are over 20 operators that have early deployments in the U.S, China, Korea, and Japan, with many more to follow. Many countries are fostering local innovation to build their intellectual property and expertise, which will reap bigger gains in economic prosperity over the long run.
Q. What about 6G?
A. The early research for 6G has only just begun. 5G has broken through many boundaries, and one of them is the move to utilize high frequencies, or what is commonly known as millimeter waves. I anticipate 6G to move the bar higher and build the next technology stack that is needed beyond 2030.
Right now, there are some interesting concepts being thrown around on 6G, there is no doubt we’ll learn from the all the 5G activities currently underway. We’re just getting started and it’s an incredibly exciting time to be in technology.
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