More than speed: 5G could become the next big economic driver

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Osvaldo Di Campli, President of Latin America Region, Nokia

  • Latin America is taking a five-pronged attack to deploying 5G in the region.
  • Digitalisation must be rolled out across all sectors of the economy for it to work both public services and industry.
  • Partnerships and collaborations will be key, for building digital ecosystems, bringing IoT devices into the frame and versing people in the language of 5G.

5G is often understood to be able to increase the speed of “everything”. Dictionaries define it as “technology to send data… at higher speeds than 4G devices”. And yet 5G is so much more than the next G-speed; it is also key driver of economic growth.

Here are five ways the Latin American region is preparing for 5G, so that it can become an enabler of successful digital transformation:

1. Seeing 5G as critical infrastructure for national economies

5G and the digital ecosystem that it will create are set to spur economic recovery after COVID-19.

We will see increased productivity with more added-value services and higher incomes as a result, and this will go a long way towards overcoming a stubborn digital divide and helping to bring Latin Americans into greater economic parity with other regions.

In some places citizens lack access to appropriate broadband speed and network quality. To overcome it, we need to expand network coverage in order to reach the unconnected 100 million inhabitants; and to increase adoption by the 211 million people that do not have service despite coverage.

The more regionally and globally harmonised the 5G roadmap is, the more affordable the devices and the more effective the network deployment —Osvaldo Di Campli

Currently, six out of 10 households in Latin America do not have fixed broadband. Deploying a 5G network involves large costs and long payback periods. Prospective investors understandably seek certainty and clarity about the legal and regulatory landscape.

A recent study carried out by Nokia and OMDIA Consultants, ‘Why 5G in Latin America?’, estimated that 5G penetration would sit at 17% by the end of 2024. The digital transformation led by 5G and its use cases could deliver up to $3.3 trillion economic and social value by 2035.

That timing is critical: Latin America is already behind its peers in productivity and is also lagging behind with the deployment of 5G networks. Therefore, planning is key.

2. Accelerating the digital agenda across all sectors

The success of the digital transformation led by 5G will depend on providing digitalisation across all sectors of the economy. This will require the creation of open and diverse ecosystems for collaborative value creation. New players and new business models will arise, from carrier-neutral and wholesale operators to innovative services providers.

Policymakers in Latin America have the chance to develop an agenda to accelerate innovation and encourage investments into digitalisation for both public services and industrial development.

The region can leapfrog other regional ecosystems by learning from the experience of high-performing digital economies, such as Finland and other European countries.

The Colombian city of Medellín has also been named a centre for the Fourth Industrial Revolution and is taking the lead in ecosystem nurturing.

3. Spectrum clearing and reallocating

Governments can act as facilitators for the process of creating and cultivating the 5G ecosystem. One crucial step will be accelerating the allocation of spectrum, because 5G needs spectrum for coverage (lower bands), high-speed mobility (mid-bands) and for industrial applications (millimeter waves). Millimeter waves enable services that can generate a qualitative leap in manufacturing.

Many countries in the region have started 5G trials, including Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico and Peru. We need a clear spectrum roadmap: the more regionally and globally harmonised the spectrum is, the more affordable the devices become and the more effective network deployment is.

Chile has taken the lead in spectrum auctioning and should be seen as a benchmark for the region. There are commercial 5G networks in the Caribbean (Setar Aruba) and Uruguay (Antel Uruguay) too, and they are currently working with Nokia on trials.

4. Supporting enhanced IoT solutions for agriculture and industrial sectors

For industrial sectors, digitalisation means the ability to control physical assets using digital tools. 5G will have a big impact on industrial digitalisation. In Brazil, it could be agriculture, mining and manufacturing. In Chile, manufacturing, mining and logistics. In Colombia, oil and gas and agriculture. In Mexico, manufacturing and mining. In sum, it is not merely a question of connectivity.

Thriving in the 5G era requires an ability to play in an ecosystem; being open to working with partners in IoT devices as well as in use cases. In Brazil, the ConectarAgro initiative is a bold example of how the issues of agriculture can be addressed from a problem-solving and multiple-partner approach. These industries need private networks, safely designed and robustly customised through a path that could start with advanced 4G and evolve to 5G.

Example of GDP share of some industries in Latin America Image: OECD data 2020 and “Why 5G in Latin America?” Nokia-OMDIA Whitepaper

5. Helping people to play a creative and active role in 5G

The people who create, perfect, use and benefit from this technology need to be held in mind throughout the 5G journey. Next-generation networks will require the upskilling and reskilling of students and workers throughout their lives.

This lifelong process requires partnerships between public- and private-sector organisations, to create training programs and testbeds for the development of solutions in emerging markets.

Digital natives must also be given the conditions to integrate into the ecosystem not only as consumers, but also in order to create and build a new digital economy.

5G for prosperity

The early definition of 5G centered on speed. Perhaps a new definition will be fitting in not too long, as society transforms the concept into something like ‘the technology that enables prosperity’.

Whether we move in that direction or not will depend on what problems we decide to solve, how we address ongoing challenges like the digital skills gap, and what investments we decide are needed in structural actions to close the digital divide.

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