Telecom Has a Chance to Drive 5G and IoT Forward. Will It Seize the Moment?

Carriers should invest in 5G technology because of the economic and environmental benefits it will provide.

Written by Ken Tinnes
Published on Feb. 25, 2022
Telecom Has a Chance to Drive 5G and IoT Forward. Will It Seize the Moment?
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Both investors and consumers continue to turn their attention toward environmental, social and governance initiatives across the industry. As that focus intensifies, telecom companies have a massive opportunity to leverage 5G’s growing infrastructure and radically change the landscape as we know it.

The most commonly cited benefit of 5G is its improved speed over 4G networks. But 5G networks are about more than simply streaming content faster or more efficiently uploading data to the cloud; they also offer significant improvements in latency, density and reliability. Those components provide a strong foundation upon which enterprise users can drive greater process efficiencies, which will result in meaningful environmental improvements and provide valuable economic opportunities for telecom carriers and the middle-market customers they serve.

Increased acceptance of IoT devices and migration to 5G networks will drive enterprise revenue and margin growth for the telecom industry. Bloomberg estimates that enterprise revenue among the three main U.S. carriers (AT&T, Verizon and T-Mobile) is poised to grow to $20.2 billion in 2026, up from $1.1 billion in 2021. Telecom carriers should also see margin expansion resulting from lower network operating costs — primarily driven by energy efficiencies.

 At a glance, here’s where we believe the 5G and IoT ecosystem has the most opportunity:

  • Expanding 5G networks and the prevalent use of IoT devices could provide significant environmental benefits.
  • Potential environmental benefits include less energy usage, lower transportation emissions, better utilization of agriculture resources and a reduction in carbon emissions in the manufacturing sector.

To better understand how the transition to 5G translates to environmental benefits, it’s helpful to understand some of the key use cases, outlined in separate research from the Columbia Climate School, Qualcomm and Mobile UK, the trade association of the United Kingdom’s mobile-network operators.

 

Energy

According to the Columbia Climate School, international standards have called for 5G to require much less energy to run than 4G, which means using less power while transmitting more data. For example, one kilowatt-hour of electricity is needed to download 300 high-definition movies in 4G; with 5G, one kWh can download 5,000 ultrahigh-definition movies.

New technology will allow IoT devices to power up and shut down automatically when not needed, conserving and optimizing energy used for appliances, transportation networks, buildings, factories, streetlights and residences. For example, smart electricity meters installed in the Empire State Building have helped cut energy costs by 38 percent.

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Transportation

Globally, transportation is responsible for 24 percent of carbon dioxide emissions. However, 5G networks can increase fuel efficiency in several ways:

  • Networks will allow connected vehicles to synchronize speeds and enable truck platooning to reduce air resistance, resulting in a 7 to16 percent reduction in fuel use.
  • 5G-connected infrastructure can better operate dynamically controlled intersections, streamlining the flow of traffic and reducing delays, potentially reducing energy demand by 13 to 44 percent.
  • Cellular vehicle-to-everything, or C-V2X, will serve as a foundation for vehicles to communicate with any network-connected devices around them — such as stoplights, crosswalks, pedestrians and other vehicles  — and provide enhanced autonomous driving. The technology will improve fuel efficiency, safety and traffic flow by optimizing actions such as lane changes, speed, gear selection and acceleration.

 

Agriculture

The use of drones for remote sensing and spraying can result in a 50 percent decrease in pesticide applied. Sensors may collect information on key agricultural variables, including temperature, moisture, light and humidity to support better decision making about how to use resources.

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Manufacturing

Mobile UK estimates that 5G-enabled technology can help the combined G-7 manufacturing sectors reduce their total carbon emissions by 1 percent between 2020 and 2035 — which equates to roughly 75 percent of the annual carbon emissions of France. This will be driven by certain 5G-supported efficiencies:

  • The technology offers significant advancements in coverage density. One 5G cell can support up to 50,000 devices — such as sensors and actuators — allowing plant managers to meaningfully improve operational efficiencies.
  • Inventory management systems supported by 5G will reduce the overall level of inventory needed. The smaller footprint required to support those operations will require less energy for lighting and cooling.

As RSM noted in its third-quarter 2021 Middle Market Business Index Environmental, Social and Governance (ESG) Special Report, a majority of middle-market organizations are taking action to incorporate ESG initiatives into their strategy and operations. With that in mind, 5G presents a valuable and cost-effective solution to support efforts to minimize environmental impact. 

The time is now for telecom carriers to help those organizations navigate the new technology offerings and realize the economic and environmental benefits they’ll provide.

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Information Technology • Internet of Things • Mobile • On-Demand • Software
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