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5G smartphones: A first glance at Mobile World Congress, but mass adoption not in time

Exciting 5G phones out on display but right now only a handful of countries are reported to be involved with a 5G network, such as South Korea, China, Japan, and the United States.

Smartphone makers revealed their renditions of phones for the next-generation 5G cellular network in full force this week at the Mobile World Congress (MWC) in Barcelona, which is the largest known trade show for mobile technology.

Ahead of others, Samsung was the first major smartphone maker to announce its 5G phone last week at US$1,980 in a bid to top other Chinese rivals. Huawei on Sunday revealed its own foldable 5G phone at US$2,600 at the MWC.

Other smartphone makers such as Xiaomi, LG and Oppo also made their announcements on their 5G smartphones at the MWC. Bursting some consumer’s bubble, Apple Inc said it is not likely to release a 5G iPhone this year, according to a Bloomberg report.

With a network that is told to be almost 100 times faster than 4G networks, it is understandable on the buzz circulating the 5G phones, but consumers have to hold their horses, as telcos worldwide need time to take up on the 5G adoption and not all countries carry the network. Research firms expect less than half of telco firms globally to have launched a commercial 5G network by 2025.

Currently, only a handful of countries are reported to be involved with a 5G network, such as South Korea, China, Japan, and the United States (US).

First Stop: The next generation mobile network

5G stands for fifth-generation mobile networks or fifth-generation wireless systems. It is a successor of the current 4G network. The 5G network is touted to be 10 to 100 times faster than 4G networks depending on the mobile connection, reaching 10 gigabits per second.

5G will use the spectrum in the existing LTE frequency range which is from 600 megahertz to 6 gigahertz, and also in millimetre wavebands of 24 to 86 gigahertz.

Benefits of such a fast network for mobile phones would support the download of a full-length high definition movie in seconds, or augmented reality and virtual reality applications, for example.

Next stop: Supporting the Internet-of-Things generation

Beyond the phone device, 5G’s capabilities expand over Internet-of-Things devices, from the likes of ‘smart refrigerators’ to ‘autonomous cars’.

According to the association that represents more than 750 mobile operators worldwide Groupe Spéciale Mobile Association’s (GSMA) director general Mats Granryd said in a report: ‘In its early phase, 5G will offer an enhanced mobile broadband experience that will enable next-generation consumer services such as augmented and virtual reality, while at the same supporting mission-critical applications across a range of industry verticals.’

GSMA suggests key vertical markets for 5G applications to include automotive and transport, logistics, energy and utilities monitoring, security, finance, healthcare, industrial, and agriculture.

Mass adoption for 5G will take a few more years

According to experts, it would take another five to seven years for 5G to reach mass adoption among consumers in the world.

Less than half of telco firms globally will have launched a commercial 5G network by 2025, predicts research firm Gartner, due to the lack of an application for 5G and the slow procedure in giving the network radio spectrum.

Out of the full pie, the GSMA anticipates China to represent almost 40% of global 5G connections by 2025, based on a research report released in 2017. Chinese mobile operators have been working on testing 5G networks from 2017 to 2019 and have plans to launch commercially by 2020.

Wireless network manufacturer Ericsson AB estimates that by 2024, the amount of data carried by mobile networks will be five times greater than it is today and 5G networks will cover more than two-fifths of the world’s population. In addition, more than 22 billion gadgets will be connected to the Internet-of-Things by 2024.

A first mover advantage would work for telcos who have a head start in sales. For example, in 2010, Verizon got a leg up in the five years after it launched the first 4G LTE service. The move helped the company increased its average share of new subscribers to 41% from 36%.

US, China, and Huawei coiled into 5G battle; US citing ‘national security’ risks on Huawei's tech

The US has raised national security concerns on the use of Chinese 5G equipment, chips and software to spy on other nations, targeting Huawei, China’s largest tech company.

The US has been lobbying European allies to bar China’s Huawei, but big telecom operators have been warning that such a move could hinder the deployment of 5G by years.

In August, Australia banned Chinese firms Huawei and ZTE Corp from supplying 5G equipment to its telecommunication operators, citing national security.

Telecommunication firms have warned of high costs if Huawei is banned from supplying 5G equipment. The ban would create a ‘significant delay’ and create ‘significant implication(s)’ for European carrier costs, Vodafone Group’s chief executive Nick Read told Bloomberg in January.

Huawei has been denying on the allegations on the Chinese espionage, saying that blacklisting the firm without proof would hurt the industry and impede the growth of the new high-speed technology.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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