5G builds on the first 4 mobile generations to accelerate the business world
Cellular networks have a long history of transforming the world of business. Today, understanding how 5G will change the way companies operate is crucial – as its impact will be much greater than that of previous generations. By understanding how the first four mobile network generations shaped the world, you can be better prepared for the fifth.
The first generation: 1G
Sales professionals were among the first people to embrace mobile phones, which at the time were 30 to 40lb devices that were permanently installed in cars. These first mobile phones quickly began to transform the business world. Firstly, traveling sales professionals could call in orders immediately as they left customers. Thanks to 1G, they no longer needed to wait to call in orders from the hotel the next morning. Secondly, sales professionals were able to have more flexibility throughout the week. They could call and inform customers about delays, and customers could contact them more frequently.
Both phones (USD 3,000) and calls (USD 3 per minute) were expensive, but the positive value they added still exceeded these costs.
Characteristic for this mobile era were briefcase-sized phones, and brief conversations that were limited to a few people for professional purposes. People were also often only able to use these phones for domestic calls.
The second generation: 2G
The demand for mobile services grew in the lead up to the roll out of 2G – both from professionals that wanted a mobile phone for flexibility and status purposes, and from consumers that were inspired by them. The real game changers were phones that could fit in your pocket and the introduction of TXT/SMS and email capabilities.
With the broader adoption of mobile phones, the business world continued to shrink as it became even quicker to get answers to questions. Suddenly, you could be sat in a customer meeting and send your colleague a text asking an urgent question. Everyone in your company soon had a mobile phone, and customers' began to expect immediate responses to queries.
Second-generation mobile phones had both voice and message capabilities, and at the back end of the 2G era we began to see email-centric devices – a new status symbol in the corporate world.
When I think back to this era, I remember pocket-phones filling the whole inner pocket of your suit jacket. The battery life was short, with a few hours in standby mode. Messages were limited by 20-character windows, and were typed on a 12-character keyboard. Blackberries became a staple food for businesses.
The third generation: 3G
The third generation came with the promise of mobile access to the internet and video telephony. But for businesses and professionals, their world began to shrink further. This time – the boundaries between people’s work and their personal lives began to blur globally.
The first global phone saw daylight and eliminated the need for globetrotters to carry multiple phones across different continents. Secondly, we began to connect our laptops to mobile networks. We started to do work on our laptops away from the office, and people began to work in homes and places of leisure.
The 3G era moved professionals' focus beyond the mobile phone. Data cards for laptops and personal MiFi-routers enabled this step-in businesses' evolution. The question of whether laptops or phones would be the main drivers for mobile data traffic was subject to much speculation. Tri-band phones and global roaming were not cheap, but they were widely adopted.
The 3G era turned out to be different than initially projected. Workation (working vacation) became a new word in our vocabulary, as the line between work and personal lives blurred. I became dependent on having both phone and laptop access everywhere.
The fourth generation: 4G
The 4G era accelerated the business world even further. Mobile apps became the next big thing for businesses, as they reduced the distance between you and your customers even further. Two things played a central role in this. First, the shift of e-commerce growth from desktop/laptop to mobile devices. E-commerce still happens on computers, but mobile devices have been behind e-commerce growth. Secondly, the migration of social media from desktops/laptops to smartphones has created an entirely new advertising landscape.
Three anchors represent the center of gravity in the 4G eco-system; smartphones, universal mobile data connectivity, and centralized hyperscale data centers. The rise of devices made personal phones at work more common than business phones used for private purposes.
The 4G-powered business era is fresh in our minds thanks to smartphones and app stores. Over the last few years, we’ve seen plenty of business unicorns emerge that would not exist without apps. Finally, we’ve witnessed an explosion in social media which is increasingly video and picture-centric and monetized with targeted advertising.
The fifth generation: 5G
Now we’re entering a new era – and 5G has the potential to transform the business world into an instant economy thanks to five major developments. The combined force of these factors is why 5G will play a crucial role in transforming business sectors:
5G enables businesses to collect more data about their customers and translate data into insights in real time. There insights can show how customers research and buy your offerings, and how they use them post-purchase. The collection of data points combined with real-time interpretation is the new norm for customer insights and you’ll need them to compete well. The time between learning about your customers to acting upon new insights becomes zero.
5G has the potential to eliminate response times for cloud-based applications used on mobile devices. Digital personal assistants were born in centralized hyperscale data centers, and had longer-than-necessary response times for users. 5G will change these response times and eliminate lag, both in the mobile network and by moving cloud and network functions closer to users. The perception of lag from request to digital action for any device using cloud-based applications will become invisible. The strong growth in voice-controlled applications will add to the impact of this experience-focused phenomena.
5G will accelerate the delivery model for digital and physical goods and services further. The first wave of e-commerce relied on free delivery within two days, and the bar was recently raised to one-day and hourly delivery. The next step is for businesses to become more agile both in manufacturing itself and inbound/outbound logistics. Every click will count, and the time between signal to purchase to goods delivered is a race towards zero. Each week of reduced overall lead times in the supply chain can deliver an extra percentage point on the bottom line.
During the first three generations, we trained our staff with books and education courses. 4G and YouTube have accelerated the learning curve for both customers and employees. The next step in the journey is not to train your employees just in time before they need new skills. With 5G and Augmented Reality, you can prepare your employees as they need new skills – an invaluable tool as markets move at a faster pace. Welcome to the internet of skills, not learning by doing, but doing while learning. A new world where your competitiveness not only come from the competence your staff possesses as individuals. But how far and fast you can augment their knowledge with the collective skills in your company combined with the broader Internet talent pool.
5G is the first mobile network generation with performance on par with wires. This creates an opportunity to untether all devices that add business value. The primary reason for doing this is to increase business agility, and using devices in their optimal locations. No device or person needs to be tied to locations close to power and Ethernet ports. 5G can increase flexibility and agility by allowing all digital devices and people to be where they add the most value right now, not where we predicted them to add the most value, because those predictions are always based on an incomplete data set. The value of this paradigm shift has grown in importance as the work force is decoupled from workplaces.
Want to know more?
This post is part of our 5G Practitioner’s Guide where we outline 9 strategic conversations service providers should have in 2020 to accelerate 5G for business. Investing time in these topics will make you better equipped to engage in 5G dialogues with your business customers.
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