The Upcoming Release of 5G Means Telcos Need to Gear Up for the Internet of Things

  • Posted by dubber
  • October 18, 2016 4:43 PM BST
  • s
Some are calling the Internet of Things the Fourth Industrial Revolution. With the upcoming release of 5G, the Internet of Things will become a reality on a large scale. Telcos can invest and be in a position of power, generating large profits and benefits for their industry, or they will be beaten to revenue by technology companies. As 5G draws closer, telcos must gear up to beat competition and benefit from the Internet of Things.

The Internet of Things (IoT), which some are labelling the Fourth Industrial Revolution, is not exactly a new concept. In fact, the first internet connected toaster was unveiled at a conference in 1989. However, it is only recently that technology is truly catching up to the potential of the IoT, and so it is only recently that it is possible on a large scale. The fundamental idea of the IoT is simple: to connect devices from every area of life to the internet, creating a digitally connected world. The possibilities are endless.

The IoT is on the rise, as a number of industries have begun experimenting with its potential. Perhaps the most common example that is already available are home heating systems, and the ability to control them from smartphones and ‘smart meters’ that intelligently control heating based on the weather outside, whether anyone is home, and various other factors. More innovative devices include microchips used by Coca Cola to track their bottles, and ‘Dash Buttons’ by Amazon – which allow users to restock their favourite household products at the touch of a button. However, the true potential of the IoT is yet to be tapped.

Gartner has estimated that the Internet of Things will grow from the current number of 6.4 billion connected devices to a staggering 20.8 billion connected devices, by 2020. The innovative possibilities of a large scale IoT include self-driving cars, remote-controlled surgery and self-ordering fridges. The IoT represents a chance for telcos, governments and technology companies to unify and create new world standards of living in the digital age.

Although the Internet of Things already exists without, 5G will be a catalyst for growing and developing the IoT, and bringing its full functionality into our everyday lives. The full potential of IoT can only be realised with the successful release of 5G. Fortunately, as Telstra have successfully completed tests in Australia, the release is now visible on the horizon - and expectations are high. Telstra’s testing demonstrated that 5G is capable of speeds greater than 20 Gbps, and latency that is half of 4G networks. Hypothetically, these speeds would be fast enough to download 600 movies a minute, or the entire 6 seasons of Game of Thrones in less than 20 seconds. It is clear that 5G will bring vastly improved speed, latency and capacity - and it is this potential that will aid the growth of the Internet of Things. 5G will revolutionise the industry and make the IoT possible on a large scale. Together, they will create a digital society and economy (the Fourth Industrial Revolution) that could connect limitless numbers of devices through one network.

IoT graph

For telcos, 5G represents abundant revenue possibilities. However, a large scale Internet of Things will likely result in a massively compressed infrastructure, where the offerings of technology companies, telcos and others will begin to blur industry boundaries. The development of the Internet of Things will therefore be a competition between various industries. For telcos, this makes staying ahead of the curve more important than ever.

The problems that telcos will face are largely related to the scale of the IoT. The most significant problems are security, connectivity and costs. Service providers will see a rapid increase in the number of devices connected to a network, and all of these connections must be maintained in a secure environment. The scale of security requirements will likely require a fundamental rethink of system infrastructure to run smoothly: it must be robust, yet flexible and adaptable.

Constant connectivity will also be essential to the efficiency of the IoT, especially as the major motivation is accommodating the increasing mobility of modern life. However, the reality of achieving continuous connectivity faces certain issues. Telcos must invest in improving cellular data networks and deploying connectivity as a commodity to effectively guarantee continuous connectivity.

The most significant worry for telcos however, is their lack of knowledge of other industries that will be involved in the Internet of Things. As other industries begin to offer communications solutions, a compressed infrastructure will be formed, and telcos must adapt their offerings to include connections to other products in order to stay afloat. However, they lack enough knowledge of these sectors to effectively do so. Unfortunately for telcos, tech giants such as Apple and Google do not lack the knowledge or innovation, and have proven in the past that they are very capable of competing with service providers for revenue. Apple’s iPhones have frequently caused trouble for telcos, and the iPhone 7 has been no exception with its increased access to VoIP communications.

A compressing infrastructure and competition between industries will significantly pressure telcos to adapt, invest and think ahead of the curve as the upcoming release of 5G makes a ubiquitous IoT a reality. Telcos are in a unique position to take a leading role in IoT development, owing to their knowledge of hardware, data management and the networks in which devices will be connected. Telcos are in need of new revenue streams, and the IoT is their answer. Companies who successfully transform the IoT into profitable solutions, whilst having the ability to manage its scale, will find themselves in a position of power throughout the Fourth Industrial Revolution. Monetizing the IoT innovation and beating competition from others will enable telcos to increase their revenue and gain loyalty from customers. In 2015 telcos ranked fourth in funding for the IoT: they need only keep this up to stay ahead of the curve and benefit from the future.