Such
like 3G network that the operators only
spent heavily in 5G networks and telecoms operators mistakenly believing
they would be able to recover their investment by charging for 5G access.
Posted By: technopediasite
Struggling mobile network
equipment makers are eyeing a possible boom in business from the first rollout
of super-fast 5G wireless networks.
The European Union wants
European firms to start offering 5G -- seen as key to develop "next
generation" services such as telemedicine or automatic driving -- in 2020.
The first commercial 5G
roll-outs begin this year and next in the United States, Korea and Japan.
Telecoms operators, who have cut spending in recent years on their
networks, hitting network equipment makers like market leader Ericsson, will have to spend
hundreds of billions in the coming years to develop their 5G networks.
Deutsche Telekom has
estimated the cost of providing 5G networks in Europe alone will be 300-500
billion euros ($370-615 billion).
"5G is definitely good
for us but also for other industries and society," said Ericsson's chief
technology officer, Erik Ekudden, at the Mobile World Congress in Barcelona.
He predicted the technology,
which makes it possible to download a full length film in less than a second,
would provide up to 35 percent additional growth to service providers.
"There is an even
bigger upside for other industries. Our own growth will be comparatively modest
by comparison," said Ekudden.
Huawei Ahead
Low-cost Chinese player
Huawei has been the biggest winner so far.
It has spent heavily on
research and development and managed to undermine the position of its rivals
with less expensive products.
Huawei chief executive Ken
Hu said at the congress that his company had signed memorandums of
understanding for 5G equipment with 45 operators in Asia, Europe and North
America.
"The margins have
dropped significantly with the arrival of Huawei on the market", said
Dexter Thilien, analyst with BMI Research.
This weakened an already
highly competitive sector and triggered the merger of French telecoms equipment
company Alcatel-Lucent and Finland's Nokia in 2016, he added.
Three firms now dominate the
global mobile network market -- Ericsson, Huawei and Nokia.
New clients
5G wireless networks promise
to unlock the potential of internet connected devices, or the Internet of
Things, which could create a whole new category of potential clients for
equipment makers aside from traditional telecoms operators.
French environmental
services group Veolia for example has set up its own wireless network for its
smart meters.
Airports, highways, railways
and other infrastructure operators are all "potential good clients of 5G
frequencies," said the president of French telecoms regulator Arcep, Sebastien
Soriano, in Barcelona.
The new uses for wireless
networks are often completely different, which is forcing gear makers to seek
partners from other areas.
Huawei for example has one
thousand partners in other areas "to provide different use cases" for
wireless networks, said the company's executive director and president of
products and solutions Ryan Ding.
"We are an expert of
telecom industries, but we don't know much about connecting cows for
example," he added, in a reference to connected farming.
Mobile network equipment
makers remain prudent, despite the potential rise in the number of clients.
"It's a whole new
business environment, there can be room for newcomers in this market,"
said Ekudden of Ericsson.
"But scale and leverage
are also important, there shouldn't be unique self-built networks for every
kind of application."
Their caution is based on
the lessons of the past. With the arrival of 3G
wireless networks, telecoms operators spent heavily, mistakenly believing they
would be able to recover their investment by charging for mobile internet
access.
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