Waiting for 5G’s Payoff — and Killer App

Given the money spent, and the relatively scant payoff thus far, 5G might  be, at least for now, a solution in search of a problem.

If one tallies up the tens of billions of dollars spent by the major U.S. wireless carriers, which are now tantamount to sunk costs, it remains to be seen if and when the telcos will see returns on investment.

Build it and they will come, as the baseball movie once promised — but banking on the consumer to break down the doors with insatiable demand is always a dicey proposition.

As reported by Bloomberg this week the carriers — including AT&T,  T-Mobile and Verizon — have spent $100 billion through the past three years to get 5G in place. Buying up the necessary bandwidth, and upgrading the tech, of course, places these companies at the ready to serve demand when it materializes. It also becomes a strategic necessity, a form of high-tech keeping up with the Joneses.

Giving the Phones Away? 

In a sign of tepid demand, the newswire noted that some carriers are offering 5G  phones “for free” to get consumers to make the switch using new services and products over 5G. Of course, having the phones in hand would naturally, it would seem, spur consumers to embrace new services, which in turn would benefit the Amazons and the Googles and the Microsofts of the world. The relationships are symbiotic, in a sense: the carriers need the tech giants, and vice versa. And with more than $118 billion spent by the major wireless firms on 5G spectrum, cementing various cloud-based ecosystems will be a priority.

It may the case that it is corporate realm that lights a fire under 5G, that gives the telcos the payoff that they anticipate. Perhaps the killer app may not be streaming media, but the digital workplace.

We contend that the low latency, and enhanced data speeds of 5G will be of increasing interest and value to the companies across any number of verticals, up and down supply chains, especially as they automate back office functions and factory floors too.

In but one example, last year, Verizon debuted a hybrid cloud platform and showcased a pair of robots that use 5G to communicate. The cloud platform was created in partnership with IBM and Red Hat, the robots were unveiled at the Mobile World conference in Barcelona. Cloud computing and 5G helps machines communicate more effectively with one another.

Read also: Verizon Unveils 5G Robots, New Cloud Platform

The improved connectivity, of course, should be able to turbocharge artificial intelligence (AI), machine learning, and the internet of things makes the leap from concept more firmly into reality. Recent PYMNTS Connected Economy reports show that 89 million consumers work remotely (online) at least part of the time, even as they navigate digitally connected pillars such as commerce and personal financial services. The blurring of lines across the personal and professional spheres is tied to the device itself, with 5G poised to be the backbone.