Four years after its debut, 5G for industry is just starting to connect

As the time it takes wireless network data to travel from a device to a server and back shrinks to a tiny fraction of a second thanks to 5G, businesses outfitted with the mobile communications technology will be able to make snap decisions in a way that isn’t possible with Wi-Fi or cables. Factory robots can spare needless emergency shutdowns by cutting erroneous signals that they’ve gotten too close to a worker. Combine harvesters with cameras could transmit crop photos and soil data to AI software on a server as they’re driving, enabling pinpoint spraying of problem spots in a field. Doctors could improve surgical accuracy with remote-controlled tools.

“The trend is, companies want to have everything under their control,” says Christian Müller, a senior sales and business development manager with Rohde & Schwarz, whose test and measurement equipment helps companies ensure that their private 5G networks can hold up under the coming data storm. “These are examples of where we’re going, where research is. What we’re seeing above all at the moment is that these networks are being installed to learn. It’s all a big playground.”

Four years after 5G’s debut, most businesses are still in playground mode, proving the investment case rather than committing all in. While more than a billion consumers worldwide subscribe to 5G services, companies have yet to take full advantage of the technology to run the kinds of low-latency, high-throughput, sensor-intensive industrial jobs for which the technology was designed. Holding back adoption are high costs, evolving standards, a lack of available devices and software applications, and a complex architecture that makes the networks hard to integrate with companies’ IT systems.

Only 21% of 1,325 global businesses surveyed by consultancy EY last November said they were currently investing in 5G, compared with 38% investing in broader Internet of Things (IoT) technologies and 65% in robotics and factory automation. Machines built to the latest standard are even rarer. Just 1.1% of cellular IoT devices ran full-fledged 5G radio technology at the end of last year, though that will rise to more than 10% by 2030, according to market researcher Transforma Insights. Just three of every 10,000 such devices run on private 5G networks that businesses build and host themselves, a number set to increase 21-fold by the beginning of the next decade.

There’s still a dearth of industry- and process-specific 5G applications, notes Transforma analyst Matt Hatton. “On the private networks side, it’s mostly test beds and trials and seeing how things go,” he says. “Businesses have a choice at the moment: Do they go with 4G or with 5G for these networks? Most companies are still falling on the 4G side of things.”

Production floor

No question, plenty of large enterprises are still plowing ahead with 5G.

• John Deere is investing in private 5G networks for its factories in the US Midwest, having taken the extra step of buying 50-MHz of its own 3.5 GHz spectrum where those plants are located and hiring specialists to manage the networks. The maker of distinctive green and yellow tractors and combines is using the networks mainly to track tools and analyze data from production lines to improve assembly. Next up: outfitting robots that can work alongside people with 5G.
• Mercedes-Benz is working with Telefónica Deutschland to build a private 5G network for automobile production at its Factory 56 near Stuttgart, Germany, which turns out S-Class luxury sedans and EQC electric SUVs on a 215,000 square-foot production floor. It’s using 5G and Wi-Fi networks to track vehicles on the line while showing production data on workers’ devices and large displays.
• Financial services giant Black Rock is partnering with Verizon on a private 5G network for its Hudson Yards headquarters in midtown Manhattan, looking to take advantage of high speeds and low latency for mobile applications on its trading floor, including ones that make use of augmented/virtual reality.
• Ford is outfitting the Dearborn, Michigan, plant that makes its electric F-150 Lightning pickup with a 5G network so that production line employees can use cellular-connected tablets to get information about material supplies and equipment status and scan components of in-production trucks with their phones. The company also installed a 5G network at its Dunton, UK, factory to manage the half a million data points per minute generated by the roughly 1,000 welds an electric vehicle’s battery and motors require.
• Frankfurt Airport is constructing a large 5G network for managing autonomous vehicles on runway aprons and monitoring airport facilities via camera-equipped robots and flying drones.

Plenty of fertile ground for 5G

5G’s high data transfer rates and low round-trip latency (each at least five times better than with 4G), as well as its advertised ability to support up to 1 million devices per square kilometer, make it ideal for autonomous vehicles in factories and ports, or for production processes that respond immediately to signals from software.

Harbor Research, a market researcher and consultant in Denver, sees fertile markets for 5G networks not only in heavy manufacturing plants, trading floors, and ports, but also on oil and gas rigs, on pipelines, in connected cars, and robotic surgery. 5G’s low latency makes it especially compelling where vehicles or robots need to be remote controlled or steered.

More businesses will start building private 5G networks for scenarios where soaring wireless data volumes make it too expensive to upload to servers using public networks, says Allen Proithis, CEO of GXC, an Austin, Texas, startup. GXC, funded by BMW and Intel, builds wireless networks for warehouses, farms, and other sites. Some agricultural equipment has become “like multimillion-dollar servers generating data at the network’s edge,” Proithis notes. In warehouses, electric forklifts need to operate in environments where Wi-Fi tends to fall down and the cost of fiber optic cable is too high. “That’s where 5G starts to shine,” he says.

But a lack of 5G-capable devices and their steep price compared with previous-generation equipment has held back development. “There will be more and more over the next year for these low-latency cases,” Proithis says. “Customers don’t want that data on the public network.”

Telecom providers, too, stand to benefit as automakers, port operators, and other businesses lease capacity on their public 5G networks instead of building their own. But 5G’s most compelling features, including the ability for carriers to offer business customers dedicated, secure portions of their networks called slices, depend on carriers running 5G equipment not only in the radio access network that connects devices, but also in the network core that manages service and subscribers—a development called 5G “standalone” that’s still in its infancy.

Wait-and-see mode

Most businesses are taking a wait-and-see approach. “We’ve been talking about 5G for five to seven years, but the infrastructure hasn’t been available and the ROI isn’t there,” says Harry Pascarella, an analyst at Harbor. “That has led to much slower adoption than anyone expected.”

5G radio modules can top US $100 each, compared with less than $20 for 4G Long Term Evolution (LTE) radios and less than $1 for Wi-Fi, according to Transforma Insights. A private 5G deployment can cost up to $1 million over its lifetime, double the amount for 4G.

Many of the IoT and connected vehicle capabilities highlighted by Rohde & Schwarz and GXC are just coming to market with the current release 16 of the 5G specification. Additional industry-friendly features must wait for subsequent releases, including a set of enhancements in release 18 called “5G Advanced.”

Among businesses that have deployed a private mobile network based on 5G vs. earlier cellular technologies—or plan to in the next two years—78% cited faster connectivity, 68% greater reliability, and 56% the ability to connect more devices, according to a survey of 415 businesses conducted last year by market researcher IDC.

Chasing golden geese

Telcos need to recoup the hundreds of billions of dollars they’ve spent on 5G spectrum and network upgrades by quickening uptake of industrial 5G, while avoiding a replay of what happened with 4G a decade ago, when they shelled out for spectrum licenses and equipment upgrades, then watched the likes of Netflix, Google, and Meta’s Facebook reap the rewards.

Just 40 mobile operators globally were testing or deploying 5G in their public core network as of the end of February, out of 523 carriers investing in 5G licenses, deployments, or trials, according to a report by the Global Mobile Suppliers Association trade group.

If telcos pick up the pace of adopting full-fledged 5G, with both the policy-managing network core and device-connecting radio access network on the latest standard, it could spur more software providers to write applications for industry. “No one wants to invest and commit until they see movement on the other side,” says Oracle Communications Group Vice President Andrew De La Torre. “The industry is nervous about the absence of the golden goose use case. With 5G, we’re trying to build a brand-new ecosystem.”

Oracle is developing 5G-enabled apps for police and other first responders,

construction and engineering firms, and restaurants, as well as for predictive maintenance of energy and water facilities. It’s also evaluating applications for 5G in medical devices and video monitoring of patients. In April, Oracle said it would team with Ireland’s Druid Software to run its platform for building private 5G networks on Oracle Cloud Infrastructure. “It’s still too soon to be sounding the death knell for 5G,” says De La Torre. “Everyone’s wringing their hands, saying nothing’s happening. Chill.”

Laying the groundwork for the killer app

About 200 mobile operators are expected to invest in 5G standalone network trials and deployments by the end of this year, according to consultancy Deloitte—double last year’s number.

Release 17 of the 5G spec, also coming to market by year’s end, will lower communications latency even further, giving developers more incentive to develop 5G-capable IoT applications. “That’s when it will really start to take off with enterprises,” says Jason Leigh, an IDC analyst, who adds that the wireless industry “needs a killer app that shows off the difference between the LTE and 5G experiences.”

Release 18, due in 2025, will include 5G Advanced capabilities that save energy and improve data collection when performing machine learning analysis over 5G networks.

The 5G specs for releases 17 and 18 also include a “reduced capability” technology called RedCap that can reduce the price of 5G IoT devices by half or more while consuming less energy and offering faster data rates than earlier-generation mobile communications networks.

By decade’s end, the next generation of wireless communications technology, 6G, could debut, promising near-zero latency. 6G could let robots communicate with one another without human intervention, replace more touchscreens with voice dictation, and support more sophisticated wearable healthcare devices that track vital signs.

Meantime, 5G spending is picking up and network performance is improving, encouraging companies staking much of their business on its expansion. “We’re seeing the first networks that are really in operation,” says Rohde & Schwarz’s Müller. “It’s coming slowly, step by step.”

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