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Global Fortune 1000 Companies Report 5G Transition Plans

Dec. 10, 2021
How do your concerns and goals regarding 5G technology compare?

In the era of digital twinning, IIoT device-based data gathering and data analytics powered by artificial intelligence, the need to increase network speed may feel inevitable. For companies laying down these systems fresh, setting 5G as the minimum bar may be less complicated than for companies already employing some or all of the related technologies who must therefore upgrade existing networks.

ABB Power Conversion in August 2021 commissioned a research study, “Destination 5G: How Global Fortune 1000 CIOs and CTOs Are Charting Their Course” to inquire among Global Fortune top 1000 companies across the U.S., France, Germany and Italy as to how they are handling transitions to 5G technology. The 204 CIOs and CTOs that responded give insight into how companies are thinking about the technology as a whole and how their long-term strategies are affected by the need to upgrade.

According to the ABB study, 83% of the respondents stated their companies will transition to 5G within the next two years, though 47% believe the biggest barrier to transitioning to 5G lies in misunderstanding its potential uses and benefits. Does this suggest that a healthy number of companies are upgrading without knowing across the organization what, precisely, they are going to do with the technology?

“We believe that the 83% of tech leaders who are embracing 5G understand that the immediate benefits – including higher bandwidth mobile services and private networks – will lead to new smart technologies and use cases in the future,” says Raj Radjassamy, 5G wireless segment leader at ABB Power Conversion.

“Realistically, these future-forward 5G use cases – such as fully autonomous vehicles, augmented reality, virtual reality, real-time analytics with edge computing, industrial automation and intelligent infrastructure – won’t happen overnight,” continues Radjassamy, “which is why there are still misunderstandings surrounding the short-term benefits of transitioning to 5G so soon.”

What 5G Networks Are for and What They Require

Increased network security and the need for private network or IIoT enhancements were cited by 54% and 52% of respondents respectively as the primary reason they intended to transition to 5G. The survey did not gather information on what specific IIoT enhancements the respondents planned to support with faster networking, though Radjassamy makes educated guesses.

“In an ideal world, the majority of today’s manufacturers would be operating greenfield sites with the latest, 5G-ready equipment. However, many could face challenges with older-generation equipment (such as pumps, motors, actuators, etc...) that is not IIoT ready,” says Radjassamy. “We can theorize that today’s primary IIoT enhancement concern is centered around retrofitting legacy equipment with new-generation sensing technology that will help transform manufacturing floors into hyper-connected, agile facilities of the future.”

Acceleration of digital transformation and advanced Iot/IIoT development were each cited by 46% of respondents as the greatest expected impact of a transition to 5G networks. The tremendous impact of smart factories and manufacturing on their businesses informs the thinking of 35% of the survey respondents. “Upgraded sensing technology will unveil a new level of data collection and data analytics to better monitor, assess and optimize industrial systems, and further embed these systems into digital IIoT environments,” says Radjassamy. Some 25% of the respondents believe that AR/VR technology and digital twins will have the most significant impact on their businesses.

The survey also inquired as to the anticipated CapEx and OpEx expenses of a 5G transition, such as the need to deploy an increased number of macro and smaller cell sites, that will add strain to power grids and also require meters and backup power. According to Radjassamy, overall cost when considering the upgrade to 5G was not a significant concern, with 48% of respondents stating they would allocate between $250,000 and $499,000 for front-end 5G transition.

Specific aspects of the transition, however, did concern the respondents, like the cost of the massive amounts of small cells, each with dedicated fiber optic cables, power equipment, and backhaul connections, compared to macro cell sites. An increased energy demand between 26% and 50% is expected by 42% of the survey respondents.

You can download the full report through the ABB website.

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