The race for 5G has already started. The deployment of ultra-fast mobile phone networks introduces great changes in the industry, including the current business model. Mats Granryd, general director of GSMA (the entity that groups more than 750 telephone companies around the world) points out that Argentina is not so far behind Europe, which “clearly does not lead,” he clarifies. The executive explained that the arrival of 5G involves large investments by the operators, for which he requested the concession of the frequencies for a longer period.
Although he did not give specific dates for the debut of the 5G, Granryd assured that “his development in Argentina will be faster than the 4G”. While passing through Buenos Aires and before leaving for Barcelona to attend the Mobile World Congress, the largest mobile phone trade fair organized annually by the GSMA, Granryd spoke with the Economist about the next technological leap, the evolution of ultra-fast communications and the new ones services that will allow interconnecting people, devices and cars from the cell phone.
-Why do you estimate the arrival of 5G in Argentina?
-All will depend on the moment in which the operators find a suitable business model. I presume that the first real tests will be carried out between 2020 and 2021, but the massive development will require a little more.
-What are the most advanced countries in the race?
-There are several Asian countries (Japan, Korea, China) and the United States. This is where the highest rates of development are observed. In Europe there are many tests, as in Argentina. But we estimate that the massive deployment of 5G will begin next year. But it is important to emphasize that both technologies (4G and 5G) will coexist for a long time and that there will be no abrupt cut.
-The development of 5G requires high levels of investment. What would be the right business model for your recovery?
-We do not see a very big difference with what we have now. The industry globally invests today in 4G; tomorrow a mixture between 4G and 5G and then it will be for 5G.
-The global sale of cell phones fell for the first time in 2018. Do you think that 5G could reinvigorate the terminal business?
-The reason why equipment sales are falling is that before a person had more than one phone Before, also, the operators had different business models and different rates. Now that is not happening anymore. The penetration of mobile phones in some markets was 120% and now it is going down, and there is nothing wrong with that. We are consuming more data and the consumption of data is growing, and that is what generates the money today. In the 5G era, we’re going to have a lot more data. As mobile operators we will have the opportunity to combine different speeds with other technologies, such as Artificial Intelligence, Big Data, Internet of Things. Tomorrow it will be possible to connect in a single device people, the dog, the car and the appliances. Everything will be interconnected.
-The rates are also going to be 5G?
-I do not think so. The future business model will not be based on data consumption, but in addition, the connected devices consume little data. You will have Netflix, for example, but the rest of the things are low consumption. The important thing is to find an adequate service that combines different technologies. And then different values can be loaded. That is what we call “intelligent connectivity”.
– So we’re going to a flat rate model?
-I think it will be a variable model. In some cases yes, in some others it does not, it depends. The operators are very creative to find good rates for users.
– How does the US-China war affect the evolution of mobile telephony towards 5G?
-Until now, not at all. However, this industry depends on scale. The development of 4G was even throughout the world and that produced cheap services and that cell phones were cheap. Today calls can be made from Argentina to Japan or the United States, but that was not possible 10 years ago. Something key for us in the industry is to have scale. And anything that obstructs the scale is bad, because it slows down progress and development.