The 5G Rollout – How it Works, Challenges, Speed & Benefits for eCommerce
June 28, 2019
LiveArea’s Richard Mathias addresses key misconceptions around the next big tech trend, explaining where, when, and how 5G may be used and implemented, plus how brands can prepare
5G is expected to be the future of the internet and eCommerce, facilitating immediate access, decisions, and transactions through advancements in connectivity.
We’re hoping for a future where convenience and commerce become further intertwined, raising levels of online user experience. The technology is predicted to underpin VR and AR, and may supercharge connectivity between devices – think connected vehicles and the Internet of Things.
5G is expected to make mobile commerce an even more frictionless experience for consumers. This means everything from instant loading search results, product pages, and demonstration videos to even faster chatbot interaction, recommendation generation, and checkout.
How is 5G different to 4G or 3G?
5G promises faster downloads, higher capacity, and lower network latency for high bandwidth services.
50% of video content is now viewed on mobile, and 5G will mean greater access to video on-the-go. It is reportedly 20 times faster than 4G and, supposedly, a 2-hour movie will be downloaded in just 12 seconds. Other media and file downloads are expected to be instantaneous.
Higher capacity is ideal for densely-populated areas where demand is strained. Anyone who’s been to a busy sports stadium or airport will understand how data can be stretched across thousands of people in a small area, and 5G is expected to reduce these issues.
Actually, it could add an extra dimension to live entertainment. Sports stadiums, theatres and music concerts could launch live on-screen applications and merchandising opportunities, giving a more hands-on, engaging experience for captive audiences.
How does 5G work?
The new 5G network consists mainly of two wireless technologies – mmWave and 60GHz – which have varying characteristics and applications. Given this complexity, consumers will likely have to use a combination of 4G and 5G technologies in their day-to-day lives for the foreseeable future.
It has a smaller range than other technologies, and struggles to penetrate buildings, walls, and underground. It would be an addition to – rather than replacement of – wired connections. This alone means that 5G will have limited use, even in developed markets.
How will 5G be implemented?
5G has a smaller range than other technologies, meaning many small base stations will need to be installed. But installing the tens of millions of new micro-base stations needed to ensure people can get a reliable signal is not straightforward. There will inevitably be competition for this rollout, cost issues, and technical barriers that will ultimately extend the initial implementation period.
One comparable example is the rollout of Australia’s National Broadband Network (NBN), which was hugely delayed due to underestimating the cost and logistics involved. The rollout required installing cables through conduits under streets and in sewers. Negotiations with Telstra to use their physical infrastructure, finding workers experienced in the new technology, and closing busy city centre roads and thoroughfares proved chaotic. This was a huge undertaking in terms of organisation, and the network has recently received some heavy criticism.
Will 5G be available everywhere?
Verizon’s CEO said that 5G is ‘not a coverage spectrum’ it won’t be available outside cities any time soon. T-Mobile was even more candid, saying that 5G would never reach rural America. Developing countries can also expect to wait a while.
Don’t forget it’s the poorer rural areas across the world that have skipped the PC-era and now rely on mobile phones to access the web and make purchases online. China, for instance, credits rural purchases as a crucial factor in boosting eCommerce sales.
There is a silver lining for some specific rural areas, namely those that contain successful industry. Such areas can satisfy a business case for the rollout, given the lower cost and dramatic increase in connection speeds. This could lead to more digitally-dependant businesses moving out of the cities.
When will 5G be ready for mainstream use?
Due to the amount of media coverage, you’d be forgiven for thinking 5G is just around the corner – it’s not. For the vast majority, 5G is a way off. It’s likely to be years until the technology is accessible and 5G devices become mass-market.
In fact, the 5G standard isn’t finished. Companies are struggling toward this, but the reality is there isn’t a single functional public 5G network in the world right now. Many of the big manufacturers would be delighted to get a single handset up and running right now.
In some ways, 5G is like virtual reality. It is there, but not in the way it’s portrayed by some brands and the media.
How should eCommerce prepare for 5G?
Whilst some of the above experiences have been optimistically talked about in the media, the day-to-day benefits for the typical online consumer remain unclear. Initial handsets will likely be costly and there may well be security and privacy implications.
Companies should instead be looking to improve their digital platforms, with technology and systems that can be analysed and systematically improved. For the vast majority of companies, looking at new regions and channels will prove more profitable for the foreseeable future.
Like many new technologies, 5G provides opportunities, but to build online and in-store experiences on its potential would be perilous for all but the largest companies. And, like other big tech drops, when 5G does land, this will likely be a fertile breeding ground for new applications and ancillary technology that, as yet, haven’t even been dreamt of.
Richard Mathias, Senior Technology Architect, LiveArea EMEA
Richard started his career at British Steel in Port Talbot, and is an experienced IT and commerce professional, having previously worked in strategy, consulting, technology and operations services provision. Richard specialises in bringing people, process, technology and innovation together to help B2C and B2B companies achieve measurable success.