If you have a working internet connection, you will have seen a barrage of headlines over the past year about the fifth generation of mobile communications. You may have been wondering: Do I really need to take a break from scrolling Instagram, listening to Spotify and mining Bitcoin on my 4G-connected devices to pay attention to all this?
If you care about climate, as the European Investment Bank does, the answer is yes. Which is why last year we signed a second €250 million loan backed by the European Fund for Strategic Investments with Ericsson for research and development on the company’s systems for the next generation of mobile communications.
Reduced energy cost for networks
EIB experts classified 23% of that loan as climate action, based on the investments into the development of 5G energy efficiency features. A recent research paper demonstrates that, depending on whether the mobile station is in a low, medium or high data traffic area and its specific configuration, migrating all that traffic to a 5G network could bring about a 50% to 95% reduction in its energy consumption.
“Energy cost, together with the site rental cost, are the two largest operating expenses for these mobile network base stations, so this is a big deal for the operators,” says Anders Bohlin, the EIB’s lead economist in the digital infrastructure division. “So 5G provides operators with an economic incentive, as well as a climate incentive. That’s important for them, since a lot of customers are giving their operators quite a bit of stick for all these deals encouraging you to switch phones every two years, which is not considered very sustainable. Operators are trying to improve on their environmental conscience.”
Lower phone bills? Put that idea on hold
So will customers also see their phone bills decrease with 5G? Probably not, Bohlin predicts. Customers will simply get a faster, better service, and end up using more data.
That’s because improved energy efficiency is not the only improvement 5G will bring over 4G. The International Telecommunication Union’s performance requirements for next generation communications see a 10 to 100-fold improvement over 4G technology. For example, the number of devices that can connect to a network within a square kilometre should increase from 100 000 to one million. That translates to one device per square metre. Peak data speeds should increase to 20 Gigabytes per second.
So what will we be able to do with all this increased speed and efficiency?
Manuel Tarazona Cano, senior engineer in the digital infrastructure division of the European Investment Bank, says that, while virtual reality, augmented reality, the internet of things and connected cars are already possible, 5G’s greater performance could finally unlock their true game-changing potential.
One of the most promising new fields explored is the tactile internet, according to Tarazona. The tactile internet refers to the careful monitoring of minute movements of your body to allow you to control physical objects at a distance, while providing real-time sensory feedback.
“Think telesurgery, or robots controlled remotely by moving joysticks, pushing buttons, or even by your own gestures,” Tarazona says. “We will be able to control objects remotely through our own movements and receive credible feedback mimicking physical contact with the object – but only if the mobile signal reaches that object and provides feedback to us in something close to real time.”
The time that it takes for a wireless signal to travel through a network is called latency, and it is another parameter of 5G that will improve tenfold – to one millisecond.
Avoiding the interference from cat videos
Another feature of 5G, “network slicing,” will enable networks to give priority to services requiring real-time reaction, while continuing to manage services that only require the standard response time, like watching YouTube videos. This feature would allow the network to identify telesurgery traffic, for example, and direct that traffic to a “slice” on a “fast track” path.
Tarazona says that the telecom industry and public entities are making a big effort to stimulate innovative services by putting in place fully fledged trial 5G networks for industry experts and application developers to explore their craziest, most creative ideas without being limited by current mobile technologies. This makes it likely there will be still more innovation to come.
Number of investments
Which is another reason why the European Investment Bank has been enthusiastic in financing 5G adoption.
In 2019, the Bank signed a €300 million tranche of a €450 million loan to Telefonica and a €275 million loan to Deutsche Telekom for rolling out 5G in Germany. We also signed a €300 million loan to KPN to develop 5G in the Netherlands, and a €90 million deal with the operator DNA for 5G in Finland.
An EIB study launched last year estimates the cost of rolling out 5G and fibre infrastructure across the continent at around €350 billion, with around a third of this figure potentially coming from already expected private funding. Europe is still investing less in telecoms and technology than other regions, with an annual investment volume in mobile networks estimated at around half that of the US on a per capita basis, so the EIB expects to remain active in this sector in the near future.