5G’s potential for industrial applications and Industry 4.0 has been much hyped but, as always, not necessarily by people in the sector. However, recent research by Capgemini shows that there is wide industry support for 5G connectivity although there are of course barriers to be overcome. The research was compiled through one-on-one interviews with more than 20 Telecom executives and around 800 manufacturing and asset intensive companies across the world. Here are some of the key findings:
5G technology advantages for Industrial applications
- Speed and capacity
- Ultra reliability
- Low latency
- Massive machine type communications
- Edge processing
- Radio agnostic
- Network Slicing and adaption
Companies across the world are ready to embrace 5G
Three quarters of industrial companies believe that 5G is going to be a key enabler for their digital transformation; in fact more so than AI and advanced data analytics. Partly this is driven by delivering, at scale, advanced technologies such as real time image processing, edge analytics, advanced automation and AR/VR
Business arguments to invest in 5G connectivity
44% of industrial companies believe connectivity issues pose the big challenges for their digital transformation. The top three connectivity challenges they face were reported as lack of coverage (63%), signal reliability (56%) and lack of network speed (46%)
When industrial companies were asked why they were so keen to invest in 5G, security of operations was cited as the top reason. 5G’s robust authentication, particularly for IoT devices, and the ability to centrally manage security policies and isolate functions through Network Slicing were seen as attractive. Second on the list was efficiency of operations that allow central surveillance and monitoring of distributed and remote systems to detect operational issues. Overall companies believe this combined with Network Slicing would translate into the “Guaranteed Quality of Service” they need
5G services command a premium
The research showed that industrial companies are willing to pay a premium for 5G capabilities but Telcos often underestimate aspects of this. For example, while security, reliability, latency and quality of service had a good correlation the research showed that 72% of industrial companies say they would pay a premium for greater speed and 69% for increased capacity. This was not matched by the Telco’s expectations of 54% and 53% respectively and so creates an opportunity to exploit untapped demand.
Capgemini’s research showed that many industrial companies are so keen to realize the benefits of 5G that up to a third will apply for a 5G license to run their own private network. Indeed, OFCOM in the UK have proposals to make spectrum in the 3.8 – 4.2GHz band available for 5G private networks. Why do industrial companies feel they need to take this step? The research showed there were a number of reasons. First, private networks will offer more autonomy and security, which can be a differentiator, second they are concerned about Telcos ability to meet their demands and finally the 5G rollout may take too long. Again if these concerns can be overcome it presents an opportunity for Telcos.
A way forward
Capgemini’s research shows there is an appetite for 5G within industrial companies and that they see it as solving many of their connectivity issues. However, the research revealed a number of gaps between industrial companies and Telco service providers. The research recommends co-innovation projects to overcome this with Telcos playing an active role in helping industrial companies to realise 5G networks that solve their business needs. If this can be achieved it should open up a huge market for 5G in industrial applications.
Source: Capgemini Research Institute, Industrial companies’ survey on 5G, March-April 2019