Why has 5G, which is on the cusp of the trend, not really exploded yet?

Recently, according to foreign media LADbible, the world's first 5G remote-driven robotic arm has completed its own tattoo Virgo, fully demonstrating the speed and reliability of the 5G network. You know, tattooing is an artistic creation directly on human skin, and the technical difficulty is extraordinary. Before using the robotic arm to officially tattoo, the researchers used a large number of vegetables and artificial skin for experiments. Finally, after countless experiments, they found the right tattoo needle. When the robotic arm had almost no delay, and the needle was inserted accurately and quickly to complete the pattern, many netizens couldn't help but admire modern science and technology, and at the same time felt magical that 5G can be applied to tattoos.

The current status of 5G development in various countries with trillion-dollar investment

In everyone's general impression, 5G is undoubtedly the outlet of the next generation of communication technology. Countries and operators around the world are actively promoting the deployment of 5G networks. The Global System for Mobile Communications Association (GSMA) predicts that by the end of 2021, 5G networks will cover one-fifth of the world's population; by 2025, global operators' investment in 5G networks will be close to 1 trillion US dollars.

As early as December 1, 2018, South Korea's three major mobile communication operators SKtelecom, KT, and LGU+ jointly announced that South Korea's 5G network was officially commercialized. Since then, South Korea has officially become the first country in the world to use 5G. The United States followed closely behind. AT&T officially launched the "5G+" service that complies with the 3GPP standard in more than a dozen cities in the United States. Early 5G services were launched and operated in the United States.

The latest data from Opensignal shows that South Korea's 5G download rate is 351.2Mbps, making it the country with the fastest download speed in the world. By June 2020, the number of 5G base stations of South Korea's three major operators was 121,000, leading the world in terms of coverage. Now, South Korean operators have covered 90% of the country's population with 5G networks. The United States does not have local telecommunications equipment manufacturers, and the blockade of Huawei has made it a focus of competition among equipment manufacturers such as Nokia, Ericsson, and Samsung. However, due to the excessive occupation of wireless spectrum resources by other industries in the United States, it is impossible to allocate enough spectrum to 5G. As of April 2020, the number of 5G base stations built in the United States is only about 15,000.

Although my country's 5G development started significantly later than South Korea and the United States, both the national and corporate levels attach great importance to it. At the 2021 National Industrial and Information Technology Work Conference, Xiao Yaqing, Minister of Industry and Information Technology, said that in 2021, 5G network construction and application will be promoted in an orderly manner, 5G coverage in major cities will be accelerated, and co-construction and sharing will be promoted, with more than 600,000 new 5G base stations built. The recent "Key Points for Industrial Information Standards Work in 2021" further pointed out that it is necessary to vigorously carry out research and formulation of standards for 5G and next-generation mobile communications, "IPv6+" and next-generation Internet, domain name services and management, high-speed broadband, and future networks.

At present, my country has built the world's largest 5G network. By the end of 2020, China has opened more than 718,000 5G base stations, achieving full coverage of 5G networks in all cities above the prefecture level. IHS once analyzed that China will occupy a major position in 5G construction, and manufacturers such as Huawei and ZTE will maintain a leading position in the main 5G technology fields. The white paper "Economic Contribution of 5G Industry" of the China Academy of Information and Communications Technology predicts that from 2020 to 2025, my country's 5G commercial use will directly drive a total economic output of 10.6 trillion yuan, indirectly drive a total economic output of about 24.8 trillion yuan, and directly create more than 3 million jobs. Qualcomm's report also predicts that by 2035, 5G will create $13.1 trillion in economic output worldwide.

Empowering many industries with both opportunities and challenges

"5G is an innovation platform for the next decade." Industry insiders pointed out that 5G will give rise to applications and business models beyond imagination, and profoundly change the way people produce and live. In the next decade, the 5G ecosystem is expected to create more than $13 trillion in economic output and 22.3 million jobs, bringing positive changes to many industries such as automobiles, manufacturing, entertainment, and education. It is not only a development opportunity for the entire wireless communication and smart terminal industry, but also a huge opportunity for economic growth and social development.

If the large-scale application of 4G has truly ushered in the era of mobile Internet, then 5G's ultra-fast speed, ultra-high bandwidth, and ultra-low latency will comprehensively transform the original mobile Internet and bring new changes to the entire world. Just as 4G facilitated and prospered live broadcasting, short videos, mobile payments, shared travel, food delivery, etc., and gave birth to Internet giants such as Toutiao, Meituan, and Didi, 5G is bound to lead a new super outlet and give birth to the next batch of new unicorns.

However, the development of any new thing is the result of the comprehensive development of society, and it is by no means something that can be accomplished by a single technology alone. The changes in the 5G era are also a systematic project. If we want 5G to truly realize its value in commercial applications, we still need to solve the following objective problems.

1. Equipment

The reason why 4G can be widely used is inseparable from the smartphones that carry it. Although smartphones will also be one of the basic devices for 5G, we still need more powerful devices to support 5G, such as glasses, helmets, other sensors, watches, bracelets, holographic projection, flexible screens, robots, self-driving cars, drones, etc. How fast the performance of these devices improves and how fast they are commercialized will determine the depth and breadth of 5G applications.

2. Cost

Take the cost of 5G mobile phones as an example. The speed at which 5G consumes data is dozens of times that of 4G. If 5G is charged according to data usage, it may be difficult for more people to accept it in the short term, not to mention the popularization of other devices. If more people want to use 5G on their mobile phones, operators may still need to launch unlimited data monthly packages with low prices like 4G for everyone to choose from.

3. Security

When 5G is applied to other fields, such as AR/VR and face recognition, all information in the cloud will cause privacy leakage to become a risk. What is more worrying is that 5G is applied to the field of driverless cars. Driverless cars are essentially artificial intelligence, but artificial intelligence may get out of control, and our safety requirements for driverless cars are much higher than those for manual driving. In addition, once driverless cars or drones are used by criminals for murder and revenge against society, the consequences will be disastrous.

4. Stability

5G applications have extremely high requirements for network stability. Whether it is immersive experience, remote communication, remote surgery, or unmanned driving, any network lag or delay will cause a sharp drop in experience satisfaction and even cause network disconnection.

V. Privacy Protection

If all information is stored in the cloud, as long as the cloud password is leaked, or hacked, or even a simple database collision occurs, it may spread throughout the entire network in an instant. Everything can be connected to the Internet, which means that we are also being collected by countless devices at any time and anywhere. To the Internet, everyone is naked.

6. Obstruction from vested interest groups

The changes in the interest structure brought about by 5G are greater than those brought about by 4G, and the resistance from vested interest groups will also be more intense. A typical example is driverless cars. In the United States, China, Japan, South Korea, and Germany, the automobile industry is an important manufacturing industry, and traditional car companies also have huge policy and public opinion influence in their respective countries. The giants of driverless cars may no longer be traditional car companies such as Volkswagen, General Motors, and Toyota, but may be Google, Tester, or China's Huawei.

Huawei may take the lead in 5G financing

US media have reported that Huawei is leading the global 5G race. It is understood that Huawei currently has more than 3,000 5G patent applications, of which more than 1,200 have been authorized, while only a small number of Intel's patents have been authorized. As we all know, the United States is using state power to suppress Huawei's development, while lobbying allies in various countries to persuade them to stop using Huawei products, and then proposed to establish a multilateral communications security fund for 5G technology and equipment development to reverse the passive and backward situation of 5G.

Although the US crackdown has dealt a heavy blow to Huawei, its influence on global 5G continues to expand under the general trend of 5G development. According to relevant media reports, Huawei's executive director Ding Yun also publicly stated that Huawei has won more than 1,000 5G industry application contracts from global operators, covering more than 20 industries. So far, Huawei has built more than half of the 140 commercial 5G networks in 59 countries or regions around the world.

With Huawei leading the way, domestic 5G operators, equipment vendors, and terminal vendors are also making continuous efforts, and even ushered in a financing boom last year. According to Qichacha data, from 2015 to 2020, there were 356 financing events in China's 5G industry, with a total financing amount of 127.874 billion yuan. The number of financing events has generally increased over the past five years, and the scale of financing in 2017 was significantly larger than in other years. The reason is that in 2017, China Unicom's mixed ownership reform raised a total of 78 billion yuan. Excluding this special factor, 2020 is the best year for financing for 5G industry-related companies in the past five years.

Source: Qichacha, Datayuan

From the perspective of corporate financing, in the past five years, early-stage projects in the 5G industry that have received financing accounted for half of the total financing, and the number of projects that received strategic investment accounted for only 16.27% of the total, but their financing scale accounted for 76% of the overall financing scale. Companies with a relatively high level of 5G industry development maturity have absorbed three-quarters of the capital market's funds. From the perspective of the financing scale from 2015 to 2020, in 2017, China Unicom's mixed-ownership reform raised a total amount of funds that was the highest in the past five years, reaching 78 billion yuan. Wingtech Technology, Unisoc, Meizu Technology, TransInfo, Silicon Valley Digital and Analog, and ZTE Microelectronics are all on the list, and the investors are mainly national teams, such as the China State-owned Enterprise Structural Adjustment Fund, the National Integrated Circuit Industry Investment Fund, Shanghai Guosheng, etc., of course, there are also Internet giants such as Tencent and Alibaba.

As the core driving force for the development of Industry 4.0, smart factories, and the Industrial Internet, 5G will continue to penetrate and be applied in all walks of life. In 2021, as the population's dependence on communication networks increases, I believe that with the support of relevant policies and strong capital investment, 5G will usher in new rapid development. However, at present, the development of 5G applications still has the problem of unclear commercial profit models for integrated applications, which requires further discussion between operators and various fields.