BR ANALYSIS. 5G deployment set to unleash new wave of startup innovation

With Romania set to announce the winners of the tender for 5G spectrum by year-end, the local startup community could harness the potential of the new generation of wireless technology, which will impact a wide array of industries, ranging from transportation to healthcare and manufacturing.

The biggest telecom players in Romania have already carried out limited tests on 5G, while globally the main smartphone makers are starting to launch products that can use the new network standard.

Locally, the telecom regulator ANCOM aims to complete the tender for 5G by October 31 for spectrum in the frequency bands of 700 MHz, 800 MHz, 1,500 MHz, 2,600 MHz and 3,400-3,800 MHz.

“The winning operators might be able to use part of the spectrum of frequencies starting January 1 2020,” said Bogdan Iana, ANCOM vice-president, in a press release.

In short, the deployment of 5G networks will lead to a massive increase in data transfer speeds. The current 4G technology has a transfer speed of 1,000 Megabits per second (Gbps), while the theoretical speed with 5G could reach 10 Gbps. The latency rate, which is the time it takes to send information from one point to another, will be less than one millisecond. This will make it possible, for instance, for cars to communicate between themselves in traffic or for a surgeon to remotely conduct a procedure as if he or she were alongside the patient.

OPENING FRESH POSSIBILITIES FOR STARTUPS

This upgrade will fuel the development of the Internet of Things (IoT) ecosystem, which could connect anything from home sensors to self-driving cars and energy infrastructure. Telecom gear maker Ericsson estimates that some 4.1 billion IoT cellular connections will use 5G worldwide by 2024, according to CB Insights.

The fast development of the network will also generate demand for new products and services that could be launched by startups. The deployment of 4G technology allowed for the massive growth of startups that disrupted various industries, ranging from ride-sharing app Uber to social media platform Instagram and movie-streaming giant Netflix.

“Like any technology that innovates at the level of infrastructure, 5G will have a horizontal impact and, ideally, should open a world of possibilities for startups. Many industries will be exposed to disruption, and new business models will become possible. What comes first to mind is video live streaming. Then data-intensive IoT, V2X (vehicle-to-everything – e.n.), smart cities, govtech and pretty much anything one can imagine,” Cristian Munteanu, managing partner at Early Game Ventures, told BR.

But Munteanu wonders how many startups will actually have access to the 5G hardware infrastructure, suggesting that he is not that optimistic in this respect.

The first beneficiaries of 5G networks will be living in densely populated cities, and such locations are also ideal for development under smart cities principles.

“This change will be taking place in an increasingly urban Romania. Over the next 20-30 years, more and more of the population will migrate to cities – people who will need housing, jobs, services and infrastructure for their burgeoning and aging lives. 5G will provide the connectivity that will transform the lives of new city-dwellers,” Florin Vasilica, transaction advisory services leader at professional services firm EY Romania, told BR.

He sees opportunities for local entrepreneurs and startups in smart city projects with a focus on the health, transportation and smart buildings components. The EY Romania representative suggested that home automation and IoT connected devices are another market segment that could get an entrepreneurial boost going forward.

“New business models will arise as part of increased connectivity, creating an innovation playground for local entrepreneurs and startup,” suggested Vasilica.

Furthermore, 5G might also provide a shot in the arm to the virtual-reality (VR) sector, which has developed at a slower pace than the predictions of market analysts.

“I do think 5G in many cases is the linchpin and there will be an earlier adoption curve on the industrial side versus the consumer side for AR (augmented reality – e.n.)/VR,” Chris Bartlett, head of Verizon Communications’ Verizon Ventures, told the Wall Street Journal.

INDUSTRIES THAT COULD BE TRANSFORMED BY 5G

At present, the economies that have made most progress in the 5G race are China, South Korea and the US, according to a report by CTIA, the association representing the wireless communications industry in the US. Globally, there are just five companies that provide 5G radio hardware and systems to telecom operators: China’s Huawei and ZTE, Swedish Nokia and Ericsson and South-Korean Samsung Electronics.

Everything from the way in which we travel in the city to how we shop and learn could be transformed by the new wireless technology.

In the manufacturing sector, we might see the development of smart factories that could integrate augmented reality, IoT, automation and artificial intelligence. The new technology could support AR systems for training, construction and repairs, according to CB Insights.

In the energy sector, the development of 5G could support the expansion of smart grids that in turn could increase energy management efficiency, thus cutting overall energy costs.

The retail segment could see VR dressing rooms and AR experiences in stores or at home, say CB Insights analysts. Spending on VR/AR apps for retail showcasing could reach some USD 59 billion by the end of next year.

For financial players, the new wireless technology could help consumers carry out transactions instantly on their devices.

The power of 5G will also be visible in the media and entertainment industry. On the upgraded network, movie downloads will decrease from an average of 7 minutes to just 6 seconds. Over the next decade, the global media industry stands to gain up to USD 765 billion in cumulative revenues from new services and applications enabled by 5G technology, according to a study conducted by Ovum, which is quoted by CB Insights.

In the transportation field, the 5G network will play a crucial role in the vehicle-to-infrastructure (V2I) communications. In this way, the car could be linked to traffic lights or bus stops.

Both children and adults could benefit from better education based on AR/VR experiences. The new tools could be helpful for the training of students and specialists in high-risk fields such as medicine and aviation. Meanwhile, states and companies will also have to solve the security challenges stemming from the massive increase of devices connected to the internet. Some of the fears are that hackers could turn autonomous vehicles, medical procedures or other devices into weapons against people.

Photo: dreamstime.com

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