The Advent of 5G

The Advent of 5G

Mobile technology and its ability to connect us to services, goods and each other is now an integral component of modern life. Since the first mobile devices arrived in the late 1970s consumers’ adoption rates have grown rapidly, with almost 3.3 billion people globally using a smartphone in 2018. This is a trend we have observed at True Potential, with mobile logins accounting for 52% of all client logins.

Underpinning and facilitating these changes are wireless networks which enable increasing connectedness. First came 1G, enabling voice calls. Then 2G with SMS capability, 3G added mobile data and 4G provided speeds 20 times faster than 3G, enhancing video playback and downloads.

These networks are now set for an upgrade to 5G. This will revolutionise not only mobile devices but large swathes of consumer products. Apple and other mobile phone manufacturers are launching new 5G phones and roll out to 14 British cities begins this month, making it an opportune moment for us to give you an update about 5G and its implications for consumers and the wider economy.

What is 5G and how is it different from 4G?

5G works by utilising much higher radio frequencies, over which networks can transmit, reducing network congestion and increasing bandwidth. Therefore, it can support many more devices in any given area, up to 1 million per KM2. This increased bandwidth will eventually enable the functioning of a new network called the Internet of Things (IoT), accruing even more benefits to consumers and businesses alike.

Initially, the most tangible difference between 5G and previous mobile networks will be a super-charged generational shift in download speeds. Downloading a film should take seconds with near instant connection and speeds 100 times faster than present 4G technology.

This increased speed is buttressed by a typically techy term, ‘lower latency’. Latency measures the time between the dispatch of information (data) and its corresponding receipt by a device. For 4G the time is currently around 20-30 milliseconds, whilst for 5G this connection is ‘near instant’; 10 milliseconds or less. Reduced latency means wireless internet via a mobile connection could effectively replace Wi-Fi. In a 5G world buffering times for videos will be reduced, giving us more time to watch and enjoy streaming services.

Wider Application

Whilst increases in download speeds and smoother video streaming are the most tangible day-to-day benefits of 5G, they are perhaps the least transformative for society. Recent studies estimate effective application of 5G technology could increase the annual revenues of British businesses by £15.7 billion by 2025.

The increased reliability of 5G connections will, in time, enable manufacturing businesses to function much more efficiently and increase productivity through more capable automation. Utilising 5G technology will produce factories populated by inter-connected devices, capable of adapting to their environments and working together cohesively, so called ‘smart-factories’.

Smart Cities and Transportation

According to the World Health Organisation, an estimated 1.35 million deaths each year can be attributed to road traffic accidents. 5G and the IoT could significantly reduce the number of fatalities by enabling vehicles to interact with each other, traffic signals and pedestrians (provided they have a 5G connected device). Ultimately, 5G will finally enable the widespread adoption of fully autonomous vehicles, mitigating human error entirely and, according to a report from US investment bank Morgan Stanley, lead to around $138 billion in productivity gains in the US alone as drivers can focus on other tasks instead of driving.

5G and the IoT will also transform the urban environment, helping to ease congestion and improve traffic flow. Drivers will get moment-by-moment information pertaining to traffic jams and car parking spaces. Whilst providing information relating to car parking spaces may appear to be a hum-drum application of sophisticated technology, the effects can be dramatic. Barcelona has embedded sensors in its streets which alert drivers to the location of the nearest available car parking spots, thereby stopping drivers from circling in vain, reducing congestion and cutting CO2 emissions. Likewise, a US study estimated 30% of urban transportation congestion in US cities is due to drivers aimlessly searching for centrally located car parking spaces. Cutting these emissions would undoubtedly improve the experience of living in US cities.


The advent of 5G is a timely reminder of the innovative power of market-based systems to innovate, enhance experiences, provide productivity boosts for businesses and ultimately improve the quality of life for consumers. Adoption of 5G will provide an important stimulus for the global economy in 2020.

With the UK about to hold a general election, it is incumbent upon each of the political parties to consider the efficacy of their policies relating to 5G. Overzealous centralised policy making, well intended though it might be, will create a sub optimal incentive structure crowding out private investment.

The last thing the UK economy needs is flawed programmes restraining the next phase of the technology revolution. 5G needs policy support not state direction of capital.


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