Imagine slipping on a smartphone-connected headset to explore holiday options and taking a seamless virtual-reality tour of a beach resort in Phuket – all courtesy of an online travel agent, who has paid for the cost of transmitting the data.
As telecommunications operators start to roll out 5G, the next generation of mobile communications technology, data speeds 100 times faster than today’s standard are poised to revolutionise the types of products and services wireless networks can deliver – as well as who ends up footing the bill.
But research suggests that the operators building this 5G world will have to form far deeper and wider-ranging partnerships than in the past if they hope to survive in an era increasingly dominated by technological disruption.
“The transition to 5G requires a significant departure from the business-to-business and business-to-consumer models that telecom companies have relied on until now,” says Rolf Meakin of Strategy&, PwC’s strategy-consulting arm. “They will have to collaborate much more.”
Partnerships will be needed to help pay for the rollout itself. According to IDC, a market-intelligence group, telecoms operators will spend up to $57bn during the next three years as they update infrastructure and invest in spectrum to build 5G networks.
Those elevated costs are needed to serve an increasingly digitalised global population: IDC estimates that more than five billion consumers already interact with data every day – a figure that will rise to 6bn, or 75 per cent of the world’s population, by 2025. By that year, every connected person is likely to have at least one data interaction every 18 seconds, it says.
Yet recent PwC research indicates that only one-third of internet users today would be willing to pay more to upgrade to 5G – and only 31 per cent of mobile users would accept higher charges in return for the significantly faster service.