5G and the global power equa­tion

The Phnom Penh Post - - BUSINESS WHILE THE US SEEKS TO DISRUPT, CHINA CONT - Colonel Set­tapong Mal­isuwan

TECH­NO­LOG­I­CAL ad­vance­ment in 5G is al­ready pow­er­ing break­throughs such as driver­less cars and will un­der­pin life-chang­ing ad­vances in fu­tur­is­tic smart cities over the next decade. This has led to fierce com­pe­ti­tion be­tween coun­tries to de­ter­mine the di­rec­tion of 5G mo­bile in­ter­net stan­dards.

5G is poised to be­come the most in­flu­en­tial tech­nol­ogy in the his­tory of mankind. Not only will it al­low peo­ple to down­load huge amounts of data at high speeds, but also it will en­able thou­sands of de­vices to con­nect to one an­other so ef­fi­ciently that on­line work can eas­ily take place any­time and any­where.

Man­u­fac­tur­ing is about to un­dergo a huge trans­for­ma­tion. Within the next five years, tra­di­tional fac­to­ries will be mod­i­fied into au­to­mated ones. Here, 5G will play a key role in con­trol­ling ro­bots and sen­sors, with rapid real-time data anal­y­sis help­ing to op­ti­mise pro­duc­tion.

Dis­rup­tion will take place across ev­ery in­dus­try, af­fect­ing those who were pre­vi­ously trained for tra­di­tional work. Coun­tries will need to ac­cel­er­ate the reskilling of their work­forces within this decade. Here are some of the ma­jor changes we will see:

In­dus­trial trans­for­ma­tion; 5G is en­abling the con­nec­tion of vir­tual re­al­ity and aug­mented re­al­ity de­vices to the cloud, with la­tency so low that prob­lems with lag will sim­ply cease to ex­ist, en­abling real-time con­trol and com­mand. This will broaden our hori­zons in terms of game play, ed­u­ca­tion and train­ing in gen­eral.

Au­tonomous driv­ing; 5G will be­come a cor­ner­stone of the au­to­mo­tive in­dus­try by en­abling a mul­ti­tude of ef­fi­cient con­nec­tions: to the cloud, car to car, car to ob­ject, car to hu­man, and hu­man to ob­ject. This will in­crease the abil­ity of a car to sense other cars and ob­jects. The in­dus­try en­vi­sions a sys­tem of Ve­hi­cle to Any­thing (V-to-X) con­nec­tions that will un­der­pin the trans­port net­works of smart cities by 2035.

Re­mote ro­botic surgery; 5G will en­hance med­i­cal and pub­lic health stan­dards through the emer­gence of tele­health ser­vices. We are al­ready see­ing long-dis­tance surgery in which doc­tors in dif­fer­ent coun­tries con­sult with one an­other. The emer­gence of a va­ri­ety of con­nected med­i­cal de­vices will give peo­ple from all walks of life ac­cess to med­i­cal care and en­hance liv­ing stan­dards; no mat­ter what the dis­tance, spe­cial­ists and pa­tients will be con­nected.

Pro­duc­tion-line ro­bot­ics; 5G is ca­pa­ble of al­low­ing sen­sor data and ro­botic arms to work to­gether through real-time data trans­fer and anal­y­sis. As a con­se­quence, or­gan­i­sa­tions will be able to im­prove their work­flow as well as sup­ply chains. That will make 5G a game-changer in var­i­ous in­dus­tries in the near fu­ture.

Ad­vanced and vir­tual re­al­ity go main­stream – AR and VR are about to ex­pe­ri­ence leapfrog growth in qual­ity be­cause very low la­tency will re­duce prob­lems with lag when play­ing games. The fast-grow­ing e-sports in­dus­try will also fuel de­mand for head-worn VR and AR de­vices in a huge way. The qual­ity of such de­vices will in­crease and prices will con­tinue to drop.

The drive to de­velop 5G net­works has led to spec­trum auc­tions be­ing con­ducted all around the world, us­ing var­i­ous ap­proaches. Below are two ex­am­ples.

In Bri­tain, an auc­tion took place in March last year of 5G spec­trum in the 2.3GHz range in Bri­tain. O2 was the win­ner and it al­lo­cated spec­trum in the 3.4-3.6GHz bands to four op­er­a­tors – O2, Voda­fone, EE and Three. It is ex­pected that spec­trum in the 3.6-3.8GHz and 700MHz bands will be auc­tioned by next year.

In South Ko­rea in June last year, reg­u­la­tors al­lo­cated 280MHz of spec­trum in the 3.5GHz band and 2,400MHz in the 28GHz band. Ap­pli­cants in­clud­ing SK Tele­com, KT and LG U+ paid 3.32 tril­lion won ($2.96 bil­lion) in the auc­tion, which was 340 bil­lion won higher than the start­ing price. 5G ser­vices are ex­pected to be­gin in March this year.

Tech­nol­ogy com­pa­nies from many coun­tries are now com­pet­ing to show­case their 5G of­fer­ings to cus- tomers all over the world as net­work build-outs be­gin to take shape. The fi­nan­cial stakes are huge, and so too are the se­cu­rity im­pli­ca­tions in the view of some an­a­lysts.

It is not sur­pris­ing that 5G is seen as hav­ing the po­ten­tial to cause con­flicts among na­tions. While US Pres­i­dent Don­ald Trump vows to “make Amer­ica great again”, China con­tin­ues to de­clare that it will be the clear leader of AI in­no­va­tion by 2030. It is also ag­gres­sively cham­pi­oning its tech com­pa­nies in the 5G field.

Com­pe­ti­tion in the elec­tron­ics in­dus­try is heat­ing up day by day. Chi­nese com­pa­nies such as ZTE and Huawei, as well as Euro­pean peers Nokia and Eric­s­son, are des­per­ately try­ing to oc­cupy the 5G mar­ket, whereas US world-class mi­crochip man­u­fac­tur­ers such as Qual­comm and In­tel are com­pet­ing in the mar­ket as well.

Huawei projects that 5G will en­able the in­ter­con­nec­tion of over 100 bil­lion de­vices by 2025, with each of the world’s 2.5 bil­lion mo­bile phone users en­gaged in the trans­fer of at least 1GB of data monthly.

Com­pa­nies in the telecom­mu­ni­ca­tions in­dus­try have been work­ing tire­lessly to be­come the ones that de­ter­mine the stan­dards for 5G tech­nol­ogy and re­lated de­vices. Any com­pany that achieves this am­bi­tion can ex­pect to be hugely suc­cess­ful.

This in­cludes bat­tery tech­nol­ogy, which is see­ing leapfrog de­vel­op­ment and has be­come so minia­turised that cars and elec­tronic de­vices of all kinds are able to ex­change data and do analy­ses au­to­mat­i­cally. 5G has be­come the deep blue ocean of the cy­ber do­main, with a ma­jor im­pact on the en­tire dig­i­tal econ­omy.

How­ever, the avail­abil­ity of on­line in­tel­li­gence on a huge scale is a threat to great pow­ers like the US and other eco­nom­i­cally in­flu­en­tial coun­tries in Europe. Some fear that if China con­tin­ues its rapid de­vel­op­ment of mod­ern, low-cost de­vices, many coun­tries will face the in­creased risk of vir­tual oc­cu­pa­tion or even vi­o­lent cy­ber at­tacks.

The 5G trade war will con­tinue to in­crease in sever­ity as a re­sult. Based on an IHS Markit fore­cast, the value of 5G in the world eco­nomic sys­tem will reach $12.3 tril­lion by 2035.

In South Ko­rea, Sam­sung’s in­vest­ment plan for the next three years calls for $22 bil­lion to be com­mit­ted to tech­nolo­gies like AI, 5G, and mo­bile and med­i­cal de­vices. The com­pany also plans to hire 1,000 more AI re­searchers. It is ramp­ing up to man­u­fac­ture mo­bile de­vices and mi­crochips for a wide va­ri­ety of in­dus­tries as a con­se­quence of the huge im­pact of 5G.

One of the rea­sons that the US is so wor­ried about Chi­nese tech­nol­ogy is that it is cur­rently be­hind in terms of its 5G in­fra­struc­ture. This is be­cause the sys­tem there re­lies on al­lo­ca­tion of spec­trum held by in­de­pen­dent agen­cies, in­clud­ing the Fed­eral Com­mu­ni­ca­tions Com­mis­sion. This re­sults in ex­tremely high prices for spec­trum, which might force firms to de­lay in­fra­struc­ture equip­ment ac­qui­si­tion and ex­pan­sion.

How­ever, spec­trum man­age­ment in China dif­fers from the US model. The gov­ern­ment can limit al­lo­ca­tion to three ma­jor state-run op­er­a­tors. Thus, in­fra­struc­ture can be traded at a fast pace, with­out hav­ing to deal with spec­trum auc­tions. This works to their ad­van­tage, since drawn-out auc­tions can cause prob­lems for in­fra­struc­ture in­vest­ment.

In this re­gard, it is in­ter­est­ing to note that Trump is said to be lean­ing to­wards the con­cept of us­ing a com­mon spec­trum to solve the prob­lems re­sult­ing from the auc­tion sys­tem, which is no longer use­ful or ef­fi­cient in the 5G era.

This is be­cause a spec­trum of at least 100MHz is re­quired for a sin­gle op­er­a­tor, so the tra­di­tional auc­tion might push prices up to the point that win­ners could not af­ford to ac­tu­ally build their net­works. If the US can­not solve the prob­lem, it risks miss­ing out on the huge eco­nomic op­por­tu­ni­ties 5G rep­re­sents.

While the US is seek­ing ways to dis­rupt and counter Chi­nese tech­no­log­i­cal break­throughs, China con­tin­ues to lead the way through dis­tri­bu­tion of tech­no­log­i­cal prod­ucts to var­i­ous coun­tries. An ex­am­ple can be seen in Por­tu­gal, where Altice, the lo­cal tele­com op­er­a­tor, has teamed up with Huawei to es­tab­lish a 5G sys­tem.

It is also re­ported that a 5G sys­tem will be set up, with a large num­ber of base sta­tions, in ev­ery cor­ner of Ger­many by De­cem­ber this year.

Based on data from the World In­tel­lec­tual Prop­erty Or­gan­i­sa­tion, Huawei and ZTE have be­come the world’s largest patent ap­pli­cants for tech­nol­ogy.

It is there­fore no sur­prise that Chi­nese tele­com op­er­a­tors run­ning busi­nesses in the US are be­ing pres­sured by Wash­ing­ton. Nu­mer­ous reg­u­la­tions have been in­tro­duced to hin­der the set-up of Huawei’s and ZTE’s net­works in the coun­try. As well, many ser­vices re­lated to China Mo­bile have been shut down due to se­cu­rity con­cerns.

Sim­i­lar con­cerns about na­tional se­cu­rity have spread to other na­tions, in­clud­ing Aus­tralia, Canada, Bri­tain and Ja­pan. Aus­tralia has banned Huawei from tak­ing part in the de­vel­op­ment of its 5G net­work, and Ja­pan says it will stop pur­chas­ing Huawei tech­nolo­gies for gov­ern­ment and mil­i­tary pur­poses.

But China is still on course to be­come the world’s lead­ing 5G de­vel­oper, and its suc­cess seems as­sured at this point. Bei­jing has made clear that the coun­try ex­pects to have a prom­i­nent voice in de­ter­min­ing 5G stan­dards at the in­ter­na­tional level.

The coun­try that first de­ter­mines these stan­dards will be­come highly in­flu­en­tial in the world eco­nomic sys­tem. It is there­fore clear that trade wars around the world are only set to grow fiercer. This is es­pe­cially true of the 5G mi­croelec­tron­ics in­dus­try.

Col Set­tapong Mal­isuwan is a for­mer vice-chair­man of the Na­tional Broad­cast­ing and Telecom­mu­ni­ca­tions Com­mis­sion.

Ad­vanced Info Ser­vice in Novem­ber be­gan the first 5G demon­stra­tion test­ing on the 2.6GHz spec­trum, set­ting up a booth at The Em­po­rium in Bangkok in col­lab­o­ra­tion with tele­com equip­ment maker Nokia.

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