Home / Mobile / Phonemakers at Mobile World Congress pin hopes on 5G – Financial Times

Phonemakers at Mobile World Congress pin hopes on 5G – Financial Times

Barcelona in late February is a hunting ground for pickpockets, for it is there that members of the telecoms industry annually convene to show off their latest wares, some of which still have yet to be announced.

About 100,000 people will attend Mobile World Congress this year. Delegates will come from all sectors of the industry, including makers of the base stations that transmit phone signals, producers of the mobile devices that receive them and developers who make the apps that phones depend on.

High on the industry agenda is 5G, a network technology that aims to make data communication speeds significantly faster than its predecessor, 4G. Mats Granryd, director-general of the industry body GSMA, which organises the conference, says: “We will move away from being vague on the prospects of 5G this year to concrete proposals.”

There could be up to 200 launches of so-called 5G-lite by carriers this year as they prepare for its arrival in 2019.

The coming of a faster network has been hailed as a possible boost for the telecoms sector, with Asian, US and European governments vying to take a lead in the new technology.

A survey from UK telecoms company O2 predicts national 5G coverage would directly contribute an additional £7bn a year to Britain’s economy by 2026 and that the economic impact will be felt almost twice as quickly as that of fibre broadband, first tested by BT in 2009.

Network equipment makers at Mobile World Congress will try to deliver on the promise of a fully digital and constantly connected society. But the utopian vision of 5G has led some to question whether it will deliver all the services and economic benefits being promised, particularly as squeezed telecoms companies are as yet unwilling to stump up the projected funds to build the networks. These could cost €56bn in Europe alone.

One analyst quipped in the conference run-up that no network technology has been so talked about so early in the cycle. “That might be because there isn’t much else to talk about,” he says.

Nokia will get in on the 5G act as the network equipment maker vies with Ericsson and Huawei to win orders for the new technology. However, the Nokia brand will also return to the consumer smartphone market for the first time in three and the half years since Microsoft bought its handset business.

Some are confident the new Android-based range — made by Finnish company HMD — will become a force to reckon with. New BlackBerry devices, made under licence by third parties, will also come to market, despite the Canadian company signalling it would exit the sector last year. Others think Samsung’s woes with its exploding Galaxy Note 7 last year could let them in. Hopefuls include second-tier makers LG with its G6, and Huawei with its P10.

93

Number of countries that have mobile money users

Such products could attract hungry buyers. Professional services group Accenture, which surveyed 26,000 consumers worldwide, found 54 per cent planned to buy a new smartphone this year, with especially high numbers of possible customers in India and China.

That is welcome news for a market in which growth in 2016 slowed to 5 per cent from the 14 per cent posted a year before, according to research company Gartner. It also puts pressure on device makers to swim against the tide of what CCS Insight analyst Ben Wood calls the “sea of sameness”. As the Android software operating system underpins 82 per cent of smartphones sold, differentiation is difficult.

David Sovie, global managing director for Accenture’s electronics and high-tech business unit, says features such as voice control should help sales. “Growing acceptance of services powered by artificial intelligence, such as voice assistants, is also fuelling this market upswing,” he says.

The coming of 5G is likely to be the dominant conference talking point, even though the reality for many people around the world is that such a debate masks a daily struggle to get any sort of connection at all. Telecoms companies have started to discuss solutions, such as flying drones, or helikites, being deployed in remote areas of developed countries to deliver mobile broadband to spots land-based masts cannot reach.

£7bn

Amount O2 says 5G could add to UK’s economy by 2026

It is yet to be seen whether those people who object to brutalist mobile phone masts spoiling the countryside will welcome War of the Worlds-style drones, or if the promise of blanket coverage will be enough to keep complainers quiet.

The problem is more acute in the developing world, where connecting the unconnected remains a perennial difficulty. Facebook’s plans to deliver broadband across Africa suffered a setback last year when the SpaceX rocket carrying its $200m satellite exploded on the launch pad. The failure showed that delivering the latest in telecoms infrastructure is both expensive and tricky.

Paul Lee, head of technology, media and telecommunications research at professional services provider Deloitte, says: “The world is getting more connected, but there are still billions to connect. Mobile connections are approaching the 5bn mark. So there are still over 2bn to go. There are also varying degrees of quality of connectivity. There are some 200 carriers yet to launch 4G services, but we are likely to see some operators launch 5G services this year.”

This is not just a problem in remote places. More than 1m UK homes and businesses have what are deemed to be slow broadband access speeds, while 4G coverage is patchy even in cities. According to data from OpenSignal, a wireless company, the UK, once a pioneer in the mobile industry, now ranks 54th in global rankings of 4G coverage. “There is massive variation in mobile speed,” says Deloitte’s Mr Lee.

The GSMA’s Mr Granryd argues that pushing mobile data to more places is the “nuclear reactor” for improving people’s lives. The demand for portable “electronic money” so people can use phones to withdraw or transfer funds, for instance, has strongly taken hold in emerging markets where many have not had access to traditional banks. These have caught up with contactless wave-and-pay technologies available to bank card and phone users in countries such as the US and UK. There are about 500m mobile money users across 93 countries, mostly in Africa and Asia.

Christophe Uzureau, vice-president of banking and investment services at Gartner, says mobile finance has evolved rapidly. Different models have emerged but the most advanced, such as Alibaba’s Alipay in China, have added benefits, like assisting Chinese tourists with the processing of international payments. This evolution goes hand-in-hand with improved connectivity.

The advent of 5G could accelerate development of digital services. But the GSMA says the industry also has to focus on the provision of more relevant local content if mobile is to blossom. As Mr Granryd points out, only 0.1 per cent of India’s web pages are in Hindi while more than 400m people speak the language. Hauling up masts alone will not be enough to make 5G a global success.


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