A few weeks ago, we read in national media that “Finland is falling behind in 5G implementation. Companies should immediately initiate related development work.” The news referred to Nokia’s market research, which exhibits elements of competitor Ericsson’s highly skilled marketing.

Self-Conducted Market Research: Threat and Opportunity

Market research often paints a picture of business opportunities worth billions and now trillions. At the same time, it presents threats, suggesting that companies missing these opportunities will fall behind without 5G investments. The message to the target audience, namely corporate decision-makers, is that “others are already moving ahead.” This narrative can even mobilize the government.

Rarely have I read such incredible technological marketing jargon in one document and admired perfect statistical graphs, as in this case. All conceivable and inconceivable IT technology acronyms and their assumed potential form a perfect harmony. The story resonates with an engineer-driven customer base. Economists, on the other hand, are shown calculations that support progress in investment projects. Even political leaders find it comforting to lean on a magnificent future; after all, the government budget is purely based on the assumption that the economy will grow.

The Pandemic Turned Debts into Assets

Interestingly, the future now appears significantly improved due to the COVID-19 epidemic. We’ve heard incredible predictions regarding 5G before, but now fortune has truly struck. Are we now waiting for stock exchange announcements of tremendous growth?

Who Is Being Misled?

I apologize for the sarcasm in this blog. The market (customers) has been repeatedly disappointed by these promises. Using similar marketing research methods, Ericsson’s CEO (Hans Vestburg) predicted in 2009 that there would be 50 billion IoT connections by 2020. Those predictions have annually fallen short by thousands of percent. Unfortunately, the growth of mobile subscriptions in Finland ended 8 years ago. By 2019, numbers were already declining. Meanwhile, Ericsson is achieving its best results in history.

Who Promises and Who Delivers?

The research refers to the speed with which the US and South Korea have started 5G investments and innovations. Measurements of these countries’ 5G networks have shown that the quality is inferior to 4G networks. In 5G marketing, the technology manufacturer creates market expectations and makes promises, but the operator does not deliver on them.

If 5G radio technology is so much better than 4G, why do the agreements between the customer and the operator range from 10 Mbps to 1000 Mbps? If the transfer delay (latency) is so incredibly low and a central argument, why is there no mention of it in the contract?

Tricked mobile mannequins demonstrate 1000 Mbps speeds. The only problem is that they do not have a single application that uses even 3% of that. Despite the economic situation, there seems to be extra money available.

Where Are the 5G Innovations and What Is Their Significance?

Building demanding business solutions or health-critical services would require networks to have the reliability of a fixed network end-to-end. Who wants a remote surgeon or to be in a threatening car pile-up situation when the shared network quality promise is at the operator’s minimum level? Whose responsibility and money would such a B2B service be implemented with, and who dares to take that risk? Is it even worth tying innovation to a single network technology?

2019 I wrote about Finnish industry representatives’ criticism of 5G technology. Two important points stood out in the feedback from industry representatives. First, the business case calculations for 5G research were shaky, and nearly all solutions could be achieved with already-established network technology. Secondly, Finland has only a handful of large companies capable of significant development investments and scaling innovations. 50% of our exports are based on product areas where artificial intelligence and possibly edge computing can be utilized, but why do they need 5G on Earth?

However, it’s great that, according to the research, a treasure worth trillions of euros awaits us all – then we can get Finland’s tax revenues back to the 2007 level. COVID-19 was a stroke of luck, and we can safely go further into debt by envisioning our great, intelligent digital future.

Translation from original blog 23.10.2020

Hannu Rokka, Senior Advisor

5Feet Networks Oy