This is the fifth installment in a multipart series on the potential impact of 5G technology, the next-generation of wireless networks. Part 1 introduced wireless operators' ambitions for 5G in the U.S. Part 2 explores the potential impact on cable operators. Part 3 looks at how 5G might shape strategy for TV networks and advertisers. Part 4 addressed the growing skepticism in Europe over the 5G business case.
Telecom providers in South Korea, Japan and China plan to use the 2018, 2020 and 2022 Olympic games to showcase new 5G technologies, making the East Asian countries among the first in the world to roll out the next-generation wireless infrastructure.
Several Japanese and Chinese providers plan to follow with 5G rollouts in 2020. Japan's planned launch should make it in time for the Summer Olympics in Tokyo, while China is preparing the technology for the 2022 Beijing Winter Olympics.
The 5G launch at the PyeongChang Olympics is expected to be mostly limited to media coverage of the events, including videos shot from athletes' point of view and 5G-powered technology such as drones and live holograms.
However, industry experts expect 5G technology to quickly roll out to much wider applications.
By 2022, 10% of all mobile subscriptions in the Asia-Pacific region will run on 5G networks, with deployments starting in South Korea, Japan and China, according to Ericsson's latest Mobility Report, published June 13. That would compare to 25% in North America and 5% in Western Europe, according to Ericsson's projections.
The new network is expected to bring a 34% increase in revenue for telcos. Ericsson AB's Japan's chief technology officer, Masanobu Fujioka, said in an interview that the main challenge for operators is how to develop new business for different industries.
5G is expected to spur on the development of connected objects in homes, automobiles, factories, and many other settings. By 2035, 5G technology is forecasted to generate $3.5 trillion in economic output and to support 22 million jobs globally.
"Beyond 2025, 5G will become the main technology, that will be our main expectation," Fujioka said.
Ericsson is working with several wireless companies to develop and test 5G technology, such as KT and SK Telecom Co. Ltd. in South Korea, and SoftBank Corp. in Japan.
However, Xona Partners' Frank Rayal, a founding partner, said he expects that deployments won't happen until 2020, "at the earliest, due to a number of road bumps" that industry players have yet to address.
Ensuring adequate spectrum to support the technology and making investments for network upgrades are among the key challenges. Telcos in South Korea and Japan are currently in talks with their respective governments about spectrum allocation in order to support 5G technologies.
The South Korean government is looking at the 3.5 Ghz band or the 28 Ghz for its first phase of 5G rollout and Japan is expected to allocate around 4.4 Ghz to 4.9 Ghz, or 500 MHz, spectrum, while China is launching a consultation on the use of the 24.75-27.5 GHz and 37-42.5 GHz bands.
"One of the challenges they have to deal with is making that business decision about what [spectrum] they want to use," according to Ovum Principal Analyst Daryl Schoolar.
He added that using the lower spectrum may "take away capacity from existing 4G subscribers."
Japanese telcos NTT DOCOMO and KDDI Corp. partnered with Nokia Corp. to test 5G. Together with SoftBank, the Japanese telcos are anticipated to have a combined investment of about ¥5 trillion for the 5G rollout.
In China, 5G development is in full swing with a high degree of government involvement, Kagan Research Associate Julber Osio said in an interview. Kagan is a media research unit of S&P Global Market Intelligence.
As early as 2013, China established a group to coordinate industry efforts on 5G. Chinese telcos China Mobile Ltd., China Unicom and China Telecom Corp. Ltd., which are involved in that group, are expected to spend a combined US$180 billion on 5G infrastructure from 2017 to 2023. China Mobile and China Unicom have both partnered with Qualcomm Technologies Inc. for their 5G trials.
Smartphone manufacturers in East Asia are already "heavily involved" in 5G research and development in preparation for network upgrades, Kagan's Osio said, adding "we expect them to develop 5G-ready devices right before 5G commercially launches."
However, some industry observers noted that telcos will not make such sizable investments until they see a business case for 5G -- and some are uncertain about how to monetize 5G investments.
"There is the issue of 'what's the business case?' If no one can solve that, can you make money [from 5G]?" Ovum's Schoolar asked. He suggested the value will lie in enterprise applications and services.
"It's going to be about trying to come up with new business models," Schoolar said.