Industrial IoT market ‘worth $600bn’ by 2023 as 5G set for commercial launch

Alan Burkitt-Gray
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US and China to lead in 5G rollout while Europe lags, say Ericsson and Nokia CEOs

The first 5G services will be in service by the end of this year, said the CEOs of both Ericsson and Nokia.

The new mobile technology will primarily fuel the industrial internet, especially in China, said Ericsson’s CEO, Börje Ekholm, speaking to analysts and media on Monday morning.

Meanwhile Nokia’s CEO Rajeev Suri said the US and China are leading the race to be first with commercial services, by the end of 2018 or early in 2019.

But both CEOs, speaking at Mobile World Congress, said more spectrum is needed for 5G services to be successful. “The US needs to be more advanced in spectrum, he told analysts and media on Sunday afternoon. “This needs to be urgent for policy makers.”

He said: “The US and China are ahead of other parts of the world,” with Japan and South Korea following up. “Parts of Europe will move as well, particularly the Nordics, but I do not see large 5G rollouts in Europe for years to come.”

He said Nokia is working with NTT DoCoMo in Japan plus both KT and SK Telecom in South Korea. The company is running a trial with Vodafone in Milan and with Telefónica in Segovia. Nokia also has a pact with China Mobile to look at 5G in vertical industries.

The new generation is needed to cater for the explosion in data by consumers, he said, pointing out that mobile data will rise sevenfold between 2016 and 2021. At the same time traffic between data centres will rise five times as fast, he added. “There is more and more traffic on the networks of webscale companies.”

Ekholm, in what was a hesitant, somewhat disjointed speech from the man who has run Ericsson for just a year, said the company had 38 memorandums of understanding with operators for 5G field trials, though he did not name any. “We have several contracts for commercial delivery of 5G this year.”

He echoed Suri by saying “mobile networks must cope with the surge in data traffic” which is rising at 65% a year and will have grown eightfold by 2023.

There will be 5G devices on the market next year, he said, and he forecast that by 2023 there will be one billion subscribers using 5G for enhanced mobile broadband.

Factories will have “more than one sensor per cubic metre” connected to the internet of things (IoT), he said, all using licensed spectrum rather than Wifi.

“There will be a $600 billion market in 2026 for massive IoT deployment around the world,” said Ekholm. Though “we don’t know which use case will ultimately pay for 5G”, he said the industrial IoT will provide “new revenue sources”.

Like Suri, he said spectrum is important. “We believe governments need to make new spectrum available in the mid-band and high bands.” He called spectrum “a critical national resource” that governments should regard as part of their “national ecosystem”.

He agreed with Suri is identifying the early areas for 5G. “Development is being driven by North America and north-east Asia, with China being a leader, along with Japan and several other nations round there.”

Huawei, the major world rival to both Ericsson and Nokia, is banned from selling network equipment in the US – as is fellow Chinese vendor ZTE. Does this give Nokia an unfair advantage and put prices up for US consumers, Global Telecoms Business asked Suri. “This is a competitive industry,” he said.