1、5G in industrial operations How telcos and industrial companies stand to benefi t 25G in industrial operations: How telcos and industrial companies stand to benefit Introduction Boasting features such as faster connectivity, greater reliability and security, lower latency and network slicing,1 5G ha

2、s gained a lot of attention in the industrial world: In August 2018, Audi started testing 5G as a solution for robotic motion control use cases. Though the trial is ongoing, results thus far have been “very satisfying,” according to Henning Lser, the head of Audis Production Lab.2 Matthias Fankhnel,

3、 the head of Global Engineering and Maintenance at BASF, believes that 5G networks offer the best means to meet their data transfer and connectivity plans. “In the future, when we use 20 or more vehicles, well only manage the massive data transfer with 5G technology,” he says.3 Experts believe that

4、5G has the potential to solve many of the connectivity issues faced in a range of industries, including manufacturing, transport hubs (harbors, airports, train stations), logistics, energy, and utilities. To really understand the transformative potential of this technology in manufacturing and asset

5、-intensive industries, we have undertaken a comprehensive research focusing on industrial operations rather than on consumer applications. As well as conducting one-on-one interviews with more than 20 industry and telecom executives, we surveyed: Around 800 manufacturing and asset-intensive companie

6、s across the world, assessing their willingness to adopt 5G and the use cases where they believe 5G can add maximum value. (In this report, we will refer to these companies as “industrial companies.”) Some 150 telecom executives, to build an understanding of their 5G readiness. The aim of this resea

7、rch is twofold. First, to help industrial companies identify the high-potential use cases for 5G and the optimum 5G adoption path to deliver on its potential. Second, to give telecom operators a comprehensive and nuanced understanding of the 5G expectations of industrial companies and how to meet th

8、ose demands. Our report looks at four areas: 1. Industrial companies appetite for speedy 5G adoption and the factors driving this interest 2. Why potential delays in 5G deployment are leading these companies to consider applying for 5G licenses and how that might affect telecom players 3. The potent

9、ial manufacturing use cases that 5G offers 4. Key recommendations for industrial companies as well as telecom players. 3 5G, the latest standard of cellular networks, addresses many challenges of our connected era: coping with the exponential growth of connected devices and data traffic, reducing en

10、ergy consumption, and increasing security and connectivity performance. It introduces a versatile, adaptive and programmable connectivity engine, built around several key pillars: A new radio, providing a step change from previous cellular technologies across three dimensions: Enhanced mobile broadb

11、and speed and increased capacity: 5G can theoretically offer speeds up to 100 x faster than 4G, supporting new bandwidth-hungry applications such as ultra-high definition video Ultra-reliability and low latency: with 5G, latency can be reduced by a factor of 10, down to single-digit milliseconds. Th

12、is means that it can support use cases such as autonomous vehicles or high-precision, wireless robotics Massive machine-type communications: 5G can support a very high density of devices (up to millions per km) supporting the expansion of IoT use cases at unprecedented scale. A new architecture, whi

13、ch is more open to third parties (partners, developers, service providers) via APIs and which offers: More distributed intelligence capabilities at the edge of the network A core network mutualized across multiple radio channels (e.g., new radio for 5G, LTE, NB-IoT, WI-FI, etc.) Natively software dr

14、iven, so that the network is flexible and adaptable in response to real-time demand and specific application requirements. The combination of this new radio capability and advanced architecture will allow 5G to deliver guaranteed quality of service for specific applications. It will do this through

15、network slicing: the same physical network can be partitioned into multiple virtual networks, each optimized for different applications, resulting in cost savings and faster time to market. The following table shows a quick comparison of 5G features with the previous cellular generations and the upc

16、oming WI-FI technology: 5Gs advantages over previous generations Enhanced mobile broadband speed: (peak data rate) Massive machine type communication: (Number of connected devices per unit area) Ultra-reliability and low latency: 20 Gbps for downlink and 10 Gbps for uplink 1 Gbps for downlink and 50

17、0 Mbps for uplink Approximately 4.8 Gbps 5 1 million/km2100 thousand devices/km2 Not defined. Depends on the bandwidth required per device Network latency is less than or equals to 1 millisecond with 99.999% assurance of delivery Network latency is 10 milliseconds Network latency is less than 10 mil

18、liseconds for 5Ghz band 5G4G (LTE-A)WI-FI 6 4 Source: International Telecommunications Union, “Key features and requirements of 5G/IMT-2020 networks,” accessed April 2019, , IEEE 802.11ax: The Sixth Generation of WI-FI, accessed May 2019. 45G in industrial operations: How telcos and industrial compa

19、nies stand to benefit Industrial companies have a significant and immediate appetite for 5G, but not all features will materialize within the timeframes they want: Two-thirds of industrial companies want to implement 5G within two years of its availability. But, despite this eagerness to move quickl

20、y, telco players will need at least three years to roll out all 5G features. One-third of industrial companies would consider applying for 5G licenses: This interest in private licenses is more prominent among large organizations 47% of these bigger organizations are planning to have a dedicated/pri

21、vate network and would consider applying for a private license. Interest is fueled by the belief that private networks will offer more autonomy and security and that telecom operators will be too slow. In spite of this interest from industrial companies, not all countries will offer a regulatory env

22、ironment (e.g., spectrum policy) in which this is possible. Telcos still have a role to play in building and operating such dedicated 5G networks. Executive summary key takeaways 5G offers exciting use case potential: Key use cases that draw on 5G range from real-time analytics based on edge computi

23、ng to video surveillance of remote production lines. Both industrial companies and telecom players need a clearly defined implementation roadmap: For industrial companies, this ranges from identifying the connectivity requirements for critical use cases to adjusting the connectivity roadmap as 5G ev

24、olves. For telco operators, this ranges from educating companies on the unique features of 5G to deploying solutions for the industrial campus. Telcos also need to collaborate closely with industrial companies to create a win-win business model by understanding connectivity pain points in industrial

25、 operations and adjusting the priorities of 5G network and services rollout. 5 Companies across the world are ready to embrace 5G, but 5Gs disruptive features will take some time to materialize Three-quarters of industrial companies (75%) believe that 5G is going to be a key enabler for their digita

26、l transformation in the next five years. In fact, 5G is placed higher than artificial intelligence or advanced data analytics (see Figure 1). The reason, partly, is that 5G will be the connectivity engine that drives the development, at scale, of technologies such as real- time image processing, edg

27、e analytics, advanced automation, and AR/VR. 5G is seen as an attractive proposition and there is appetite to launch quickly Industrial companies consider 5G a key enabler of their digital transformation 84% 75% 73% 66% 66% 61% 55% Cloud Computing 5G Advanced Automation (e.g. drones, AGVs) Non-Cellu

28、lar Connectivity (e.g. Wired, WI-FI, Bluetooth, LPWAN) Advanced Robotics AI/Machine Learning Advanced Data Analytics Additive Manufacturing 67% Mobility Telecom operators survey on 5G, MarchApril 201, N=150 respondents. 13 To overcome delays, some industrial companies are considering applying for lo

29、cal 5G licenses In order to realize 5Gs full potential at speed, some companies are planning to apply for licenses and set up private networks. “We cannot wait for the network operators to be ready we are in the midst of Industrie 4.0,” said a spokesman for Siemens, one of the companies planning to

30、bid for a local license in Germany.12 One-third are interested in a local license, though there are regulatory barriers One-third of industrial companies where 5G will play an influential role would consider applying for a license or have done so (see Figure 9). “We think having our own license is v

31、ery beneficial because this gives us the freedom to either deploy the network alone or with a telecom operator,” says Gunther May, head of Technology and Innovation, Business Unit Automation and Electrification, Bosch Rexroth AG.13 In some countries, industrial companies enthusiasm could be dampened

32、 by telecom regulation. While Germany and the US have frameworks that encourage private licenses for 5G, Spain, Italy, and France are among the countries that currently do not have spectrums reserved for 5G private licensing. Figure 9. Nearly one in three are planning to apply for 5G licenses themse

33、lves Has your organization applied for 5G license in your country of operation (or has it been considering to do so)? Yes No Cant say 47% 33% 20% Source: Capgemini Research Institute, Industrial companies survey on 5G, MarchApril 2019, N=313 industrial companies, percentages represent the share of r

34、espondents who have 5G in their connectivity roadmap and chose to answer this question. 145G in industrial operations: How telcos and industrial companies stand to benefit Industrial companies are keen on applying for 5G licenses Figure 10. Interest in applying for licenses by geography USFranceSwed

35、enNether lands UKBelgiumItalyGermanySpainNorwaySouth Korea Global avg. 12% 44% 44% 18% 41% 41% 15% 45% 40% 33% 33% 33% 21% 46% 32% 70% 30% 25% 45% 30% 23% 48% 28% 32% 41% 27% 21% 54% 25% 23% 54% 23% 20% 47% 33% YesNoCant say Source: Capgemini Research Institute, Industrial companies survey on 5G, Ma

36、rchApril 2019, N=313 industrial companies, percentages represent the share of respondents who have 5G in their connectivity roadmap and chose to answer this question. We think having our own license is very beneficial because this gives us the freedom to either deploy the network alone or with a tel

37、ecom operator,” - Gunther May, Head of Technology and Innovation, Business Unit Automation and Electrification at Bosch Rexroth AG 15 Figure 11. Interest in applying for licenses by sub-sector Global average Logistics Industrial Machinery Chemical (including petrochemical) Consumer Product Oil every

38、thing still has to be built and proven,” says Sbastien Kaiser, director, connectivity everything still has to be built and proven.” - Sbastien Kaiser, Director, Connectivity & Networks at SNCF. 225G in industrial operations: How telcos and industrial companies stand to benefit Strategy for telecom o

39、perators Figure 15. 5G strategy for telecom operators Educate client companies As we saw in Section 1, different 5G features will be available at different times. Telecom operators need to manage client expectations by educating them about these timelines. This process of education also needs to emb

40、race improving clients understanding of 5G. Our interviews revealed gaps in companies understanding as a number of executives reported that their technical teams lack in-depth knowledge on 5G, even though their understanding of other commercially available wireless technologies is pretty sound. Tele

41、com players need to play a proactive role in helping their clients technical departments develop this in-depth understanding, which will then support business case development. Help clients build connectivity strategies that are coherent with their digital transformation roadmap Industrial companies

42、 generally use a wide array of connectivity technologies. While technologies such as WI-FI and Bluetooth have been around for a long time and their limitations are understood 4G and IoT technologies, such as LTE-M23 or NB-IoT,24 still have a lot of potential and might not require an immediate upgrad

43、e to 5G. It is difficult for industrial companies to determine which technologies are ideal for 5G migration and at what point of time. “As we work on our connectivity roadmap strategy, the model is not fully decided yet. 5G is obviously part of the thinking process so that we avoid any investments

44、that could become obsolete when 5G arrives,” says Jean-Christophe Oulie, head of wireless connectivity at Airbus.25 Telcos need to use their expertise to help clients build a connectivity strategy best-suited for their digital transformation roadmap and identify the optimal path to 5G migration. Thi

45、s will require two key activities: Understanding clients target state of digitization and the time horizon to achieve it Analysis of connectivity technologies their clients currently use Source: Capgemini Invent, Capgemini Research Institute analysis. 5G strategy for telecom operators Educate indust

46、rial clients Defi ne a strategy to maximize gains from Industry 4.0 opportunity Set up co-innovation projects with clients and leverage partnerships with the 5G ecosystem Help clients build connectivity strategies coherent with digital transformation roadmap 23 Define a strategy to maximize gains fr

47、om the Industry 4.0 opportunity To capture a sizeable share of the Industry 4.0 opportunity, operators need to accelerate the test and build of a portfolio of connectivity/digital solutions. These can range from fully dedicated PMR networks (dedicated spectrum/radio/ core network/private cloud) to “

48、public” solutions leveraging macro networks, edge computing, and network slicing. This starts with the current private/dedicated LTE and 4G which currently addresses most advanced requirements but with a clear evolution path to 5G. There are a number of solutions for telcos to consider: Managed serv

49、ices and solutions for private 5G network: As we discussed in Section 2, many large industrial companies such as Audi, BASF, and Siemens are actively looking to set up private 5G networks. Telcos need to position themselves as their partners offering them managed services and tailor- made networking solutions for managing and maintaining their private networks. Targeted rollout of 5G for industrial campuses: Also, rollout of 5G across a large geographical area will take significant time. Our su