2020 was slated to be the year of the 5G rollout. Now, in early 2021, considering that the events of last year were not what anybody expected, many businesses and consumers are left wondering what’s happening with 5G. Here, we take a look at the current state of play and consider some of the impacts of 5G on telecom retail business operations.
Despite the pandemic, there were leaps made in the 5G rollout as major North American telecom carriers staked their position. In early August 2020, T-Mobile announced that it had switched on “the world’s first standalone 5G network,” allowing the company to maximize the use of its 600MHz 5G spectrum. Verizon’s 5G availability rolled out to more than 60 cities across the U.S.
CNet reports that all major U.S. carriers now have nationwide 5G networks that each cover at least 200 million people. T-Mobile’s coverage is ahead of the pack, with 270 million people covered by network as of the end of 2020. Verizon ended the year with a network that covered 230 million, and AT&T’s coverage reached 225 million Americans. Globally, the industry ended the year with more than 140 5G networks launched, and more than 300 devices commercially available, according to the 2021 5G Report from mobile testing company Spirent.
Today, North American carriers are locked in a race for 5G market share. Spirent’s report says that “operators will spend this year and those ahead aggressively expanding coverage footprints. 2020 showed us glimpses of what 5G could be. 2021 will start to reveal the much bigger picture.” It predicts that 2021 will be the year of global base-station and the battle for spectrum.
Base station construction is not just pushing ahead in North America. Spirent’s report adds, “In some Asia-Pacific countries, this work has already begun with hundreds of thousands of 5G base stations deployed, greatly exceeding initial targets. 2021 will see more of the world aggressively catch up in pursuit of national 5G coverage. This work will continue for many years as tens of millions of base stations are commissioned globally.”
In the U.S., the battle for spectrum is well underway. On February 24, 2021, the Federal Communications Commission announced the winners of an $81 billion auction for the license to use airwaves that are ideal for high-speed 5G, with the big winners of the auction being Verizon and AT&T, reported CNBC. Spirent added, “We won’t have a true picture of how the 5G market will shake out until the dust settles on the flurry of spectrum auctions taking place globally.”
Looking further ahead, Spirent predicts that 2022 will see the start of mainstream adoption, with 5G widely in use by 2023. Statista echoes this forecast, saying that 5G devices will make up 51% of smartphone shipments in 2023. Even further ahead, according to a recent Ericsson report, five years from now 65% of the global population will be covered by 5G, with networks generating nearly half of all mobile data traffic.
Hurdles facing adoption
However, there are some barriers to mainstream adoption, with a lot of misinformation about the health risks incorrectly associated with 5G base stations creating skeptics among consumers both in North America and other English-speaking countries. 5Gradar reports that mobile testing company Prolifics Testing studied consistently recurring Google searches on the topic, such as “Is 5G dangerous?”, “Is 5G safe?”, “Is 5G harmful?”, “Does 5G pose health risks?”, and so on. The study found that the U.S. was in first place globally with 374,700 monthly Google searches on the health risks of 5G, distantly followed by the U.K. in second place (93,400 searches), and Australia (32,9700) in third.
Added to that hurdle is the fact that 5G speeds, for those who are using the network, are not yet what was anticipated. Right now, speeds on U.S. 5G networks are significantly slower than in many other countries in the world, according to PC Mag. However, the recent and future spectrum purchases will help catch speeds up, as will the anticipated flurry of base station construction. What’s more, the U.S. already has better coverage than most other countries, so once the speed improves, it will be ahead of the game.
One question that many consumers have been asking is whether 5G will replace WiFi. On the whole, the perceived wisdom is that 5G will work in tandem with WiFi, rather than replacing it. An easy way to think about it is that WiFi will continue to be used in the home and in venues where multiple people are using the network at the same time (everywhere inside) whereas 5G will be used on the go (everywhere outside).
5G impacts on wireless retail
For telecom retail businesses, the rollout and adoption of 5G will have a host of wide-ranging effects, with new services, devices, rate plans, and customer experiences being just some of these effects. Below are the key ways in which this new technology will change the game for the industry.
New device launches, new sales: Just as 2G phones couldn’t connect to 3G or 4G networks, 4G and LTE devices won’t be able to connect to 5G networks. This means an increase in sales all around; new devices to access the improved network and compatible accessories for those devices. However, it’s worth noting that this may be partially offset by the much-longer-lasting battery power of 5G devices. Mobile data traffic traveling over 5G will be compressed and this, along with more efficient network protocols, will give smartphones’ rechargeable batteries a much longer life.
More profitable rate plans: Increased network benefits will allow carriers and wireless retailers to charge more for the rate plans or even add new rate plan options. 5G will be an expensive endeavor, so it will be important to recover those costs. The risk factor here, of course, is the additional cost to the consumer, so it will be crucial for 5G to prove its value first.
Different media and entertainment services: With the ability to stream or download media and entertainment at break-neck speeds, we will see more opportunities to offer services or content to customers. Current subscription services may become obsolete as new, more profitable services emerge.
New IoT opportunities: More products for customers will be hitting the market: more Internet of Things (IoT) accessories for people’s work, homes, or vehicles will emerge, and even products for autonomous cars will open up. Customers will be expecting more smart products such as drones, wearables, baby tech, medical sensors, etc. This increased technological expectation will provide retailers with much higher profit margins than a typical cell phone case or screen protector.
Customer-facing in-store technology: 5G will continue to force the evolution of the technology retailers use to interact with customers. Everything from websites to mobile apps to in-store tech devices will arise. Faster connections and reduced latency will allow for a more personalized experience with solutions like digital signage, digital price tags, augmented and virtual reality kiosks, interactive in-store apps, and more.
Strengthening the customer connection: Near-instant connections for customer service, whether it’s initiated by humans or artificial intelligence (AI), will require 5G-type speed. New opportunities for these types of connections will continue to evolve. Rather than text or calls, there may be a move to video chats where connectivity will be extremely important to be able to create a great customer experience. And in the not-so-distant future, who knows? Maybe retailers could be supporting customers via holograms. However, one downside is that for retailers using in-store WiFi to track or monitor their customer data, decreased WiFi usage will impact data collection and, in turn, the retailer’s ability to provide a personalized customer experience.
Increased connectivity for businesses: Retailers that rely on multiple devices and sensors to communicate and aggregate data will see performance enhancements. This will allow more devices to be connected and with lower latency. Surveillance video or tracking technologies will also be faster and better utilized for pattern recognition of shoppers.
Better, faster inventory visibility: If a product the customer wants isn’t on the store shelves, a sales associate could advise instantly if there’s another somewhere in current inventory, either in their store or another one of the brand’s outlets. Another immediate implementation of this new technology will be the overlay of AI in-store to see sales data over areas in a specific store, in distribution warehouses, or in manufacturing plants. This will gather how-to information and identify areas of improvement for inventory management.
Better connectivity for supply chain logistics: 5G allows manufacturers to take advantage of IoT to streamline workflows in the warehouse. The network will also provide cableless connectivity for industrial robots as they receive commands and software updates from the cloud.
Improved retail data and analytics: 5G should result in more data aggregated in a more consumable way. This will mean sharing even more data to the cloud but with better and faster processes and less data entry, which takes out personal perspectives that can skew data. But AI will need to sit on top of the data to make it more digestible and curate the information as there will be too much of it to be meaningful without trusty machine learning to home in on the actionable insights.
Future potential: Perhaps 5G-enabled autonomous vehicles will deliver store shipments or deliver items to customers more quickly, and retailers could even ship orders through fulfillment solutions with 5G-connected drone fleets. Customers will be even more mobile with their buying habits, ultimately evolving purchasing behavior to where the customer can buy wireless products and services anywhere.
There seems little doubt that 5G will have radical effects on the telecom retail sector. However, this next-generation network is not without its limitations. It’s worth noting that, even in the face of years of 5G implementation and adoption ahead of us, companies such as Apple are already starting work on the next generation of wireless technology: 6G.
Learn how to prepare your wireless store for 5G with our Smart Stores: Strategies for 5G Readiness infographic.