Current state of 5G

markets
Aalto Summer Course
Peik Schulman, EY | 7.6.2021

“
5G should be considered as
an ecosystem-powered
platform to pair with
enabling technologies
connecting people,
machines and devices with
business processes.
Page 2 7 June 2021 Presentation title
Presenter
Peik Schulman
5G and IoT strategy, Business Development
peik.schulman@fi.ey.com | +358 40 709 6868
Senior Manager responsible for cross-industry 5G and
Internet of Things (IoT) business development. Peik helps
communication service providers (CSPs) and enterprises
across industry verticals to unleash the business potential of
5G and IoT.
 Agenda
1 Introduction to 5G

2 Current state of 5G

3 EU recovery fund – plausible 5G accelerator

4 The 5G opportunity for enterprises – EY study

5 Cyber security requirements

6 Semiconductor shortage – market outlook

7 Q&A

Page 3
”5G expectations” – 5G will account for 1.2 billion connections by 2025

5G will drive additional $2T with B2B industrial IoT

OPPORTUNITY
~$4,5T

Intelligent Cloud
& Intelligent Edge
(Industry 4.0 with 5G)

4G impact
on B2B*
~$2,5T
5G Industrial Impact
•
•
“Myriad Things”
Multitude Edge Cloud
• Augmented Control Platforms
Mobile/cloud • High performance networking
Consumer Impact • Private ultra fast, low latency
~$250B • AR/VR Immersive 5G industrial networks
Client/server experiences e.g. in gaming
and social media
~$25B • “Edge cloud” in the pocket
PC
IMPACT
*4G is incapable of enabling true IoT industry revolution due to
lower speed, availability, and responsiveness

Source: GSMA, 5G to add $2.2 trillion to the global economy over next 14 Years

Page 4
Introduction to 5G

5G roadmap 5G unlocks new use cases

Financial Services
Human Speed
Offices &
2022 Optimized standard Work
Full 5G vision
Homes 10 Gbps
100 times of 4G speeds
2021 Urban Latency
Environments Education
3GPP 5G Rel. 17
> 40 GHz (mm wave)
10%
Enhanced of 4G latency (Time taken for
2020 mobile signal to be recognized by an end point)
Standards-based mass rollout
broadband
Health Care Mobile data

5G
Warehouses & volume per area
3GPP 5G Phase 2
2019 Retail Sites
Critical IoT Massive IoT 1000x
greater than today
First deployments Massive Critical
2018 IoT communication Factories &
3GPP 5G Phase 1 Agriculture Connected
industries
Mobile broadband
devices per area

2017 Pre-standards 5G start 1000x

Transportation Utilities
& logistics
3GPP 5G Rel. 14 Energy
2016 Industry specs consumption
Vehicles
1/10th
compared to 2010

Page 5 7 June 2021

The 5G opportunity is a key enabler in “monetizing data” across industries

Financial Services
Human Offices &
Cities in the world Work
1,146* sites Homes

Military bases Urban

10,000 sites Environments Education
Universities
26,300 sites
Enhanced
mobile
broadband
Health Care

5G
Hospital & labs
Warehouses Warehouses & 263,000 sites
3,300,000 sites Retail Sites

Massive Critical
IoT communication Factories &
industries Industrial & manufacturing
Agriculture 10,710,000 sites
Mining
54,000 sites Sliced / private
Utilities
Transportation
Oil & gas network and edge
8,000 sites
& logistics cloud demand
Power generation
47,6000 sites
Transport venues & ports
50,000 sites Vehicles Water utility plants
140,000 sites
*cities with a population over 500 000. Statistics from Harbor Research, United Nations Service Provider Equipment
Market source: Dell’Oro Group Analysis from EY

Page 6 7 June 2021

5G is an ecosystem play

Smart home Digital services

Financial Services
Human Offices & 5G enablers
Work
Homes
Chipset vendors

Smart city Urban

Environments Education

Enhanced
mobile Health care
broadband
Health Care

5G
Retail and payment Wireless
Warehouses & network vendors
Retail Sites

Industrial automation
Massive Critical
IoT communication Factories &
Agriculture industries
Smart agriculture
Fixed network vendors

Transportation Energy
Utilities
& logistics
Transport & logistics
Vehicles Autonomous vehicle

Page 7 Company logos for illustration purpose only

Telco infrastructure supplier environment

Revenue rankings remained stable between 2019 and 2020, with Huawei, Nokia, Ericsson, ZTE, Cisco, Ciena, and
Samsung ranked as the top seven suppliers, accounting for 80% to 85% of the total market.

Top 7 Suppliers 2019 2020

Huawei 28% 31%
Nokia 16% 15%
Ericsson 14% 15%
ZTE 9% 10%
Cisco 7% 6%
Ciena 3% 3%
Samsung 3% 2%
Telecommunications Infrastructure supplier top 7 revenue share

Source: Dell’Oro Group, March 8 2021 Total telecom equipment market 2020 update
Equipment includes: Broadband access, microwave and optical transport, mobile core network and radio access network, SP router and CE switch

Page 8 7 June 2021 Presentation title

Current state
of 5G
5G rollout and adaption have accelerated: status – Sept 2019…….

5G share of total
connections in 2025 15% 2019
(GSMA est.)
World

Global 5G Statistics
5G Deployments 862

Deployment Types
Commercial Availability 697
Limited Availability 31

Pre-Released 134

Status Sept 3 2019*

*) Source: Ookla and GSMA

Page 10 7 June 2021
…vs status – June 2021 (65K sites globally)

2021

Global 5G Statistics
5G Deployments 862

Deployment Types
Commercial Availability 65.1K
Limited Availability 13

Pre-Released 187

Status June 3 2021*

www.speedtest.net/ookla-5g-map
Page 11 7 June 2021 Presentation title
In the press

DNA Finland, 04.06.2021

Nokia, 11.03.2021
AWS, 03.06.2021

Ericsson, 01.06.2021
5G
Phonearena.com, 14.04.2021

Orange, 22.03.2021 Cellnex, 15.01.2021

Page 12 7 June 2021
TCO* Full scale 5G deployment vs. Enterprise focused 5G deployment
*) Holistic concept total cost of ownership (TCO) that subsumes both CapEx and OpEx

A full-scale 5G rollout that seeks to rapidly cover 80% of the population A fast-paced, Enterprise focused 5G deployment

Other

Other
Energy
Energy
Core
infrastructure
Core
infrastructure Backhaul
Backhaul

RAN
infrastructure
RAN
infrastructure

5G Baseline & Optimized Cases = average annual TCO for the 2021-
2025 period for a European mobile operator rolling out a 5G network
in 3.4-3.6 GHz band. 4G Reference Case = the average 2013-2018
annual network TCO.

Page 13 7 June 2021 Source: GSMA SDN=Software Defined Network, NFV=Network Functions Virtualization,
CUPS=Control and User Plane Separation , C-RAN=Cloud Radio Access Network
Monetization of 5G services for enterprises ‘Something’ as a Service (XaaS), or through a
disruptive B2B2X ecosystem orchestrator role
5G Technical capabilities Monetization

Offices and Health Care Education Urban Factories and Utilities

Market
Work Environments industries

Consumer | Enterprise | Public Sector

XaaS
Digital economy

B2B B2B2X
Use cases B2C Business
Business Model

Go to market

Products and Services

cost structure
Ecosystem
partners CAPEX OPEX Operations

SLA

Page 14 7 June 2021 Presentation title

Lessens learned from early enterprise 5G customer engagements
Opportunity
Business initiative examples
► Factory of the future projects
► Global sustainability targets
► Modernization initiatives
Expected outcome / value
► Drive growth
► Reduce costs
► Protect productivity
► Protect investments
“5G timing is perfect as
wireless on the shop floor is
almost non existent
5G as enabling technology Challenges
(private) 5G network
+ edge cloud to empower
Large global corporations
► Spectrum availability and devices
People ► Ecosystem / partners
► Cost and delivery times
Processes
Data Corporate IT decision makers
► WiFi networks are approved and
known solutions by IT
► Used to COTS equipment
► 5G value proposition (outdoor a
no brainer – indoor another case)
“
5G for manufacturing
requires market shaping
(education, clear value proposition
and business case)
EU recovery fund –
plausible 5G
accelerator
Recovery and innovation funds

Page 17
Source: https://ec.europa.eu/info/strategy/recovery-plan-europe_en
 EU recovery: Overview of the Finnish recovery package allocation

192 m € 75 m € 13 m € 70 m € 20 m € 20 m €
Green Digitalization Strengthening Expansion of Common online Travel industry
transition of youth continuous learning platform for digitalization &
services learning universities sustainable
travelling
30 m € 40 m € 100 m € 230 m €
Improved Healthcare data Development Treatment queue 267 m € 150 m € 105 m € 94 m €
access to collection and of digital recovery Employment and
services utilization Research and Skills and Export and sectors
services Labor market
Development Continuous affected by the
Learning pandemic

Social- and Healthcare services 400

636 Employment and Learning
Finnish
Green Transition Recovery package

40 m € 110 m € 310 m € 332 m € 2,075 bn. €

822
Transportation Energy
30 m €
Buildings Industry 217 Digitalization
Agriculture and
Forestry 155 m € 155 m €
Networks New production
technologies 135 m € 62 m € 20 m €
40 m € Digital Acceleration of Digital
Energy 60 m € 110 m € Infrastructure Digitalization Trust
efficiency and Energy efficiency Primary and
wood construction
20 m € and digitalization of secondary recycling
Biogas and processes and re-use of 50 m € 85 m € 10 m €
materials 25 m € 14 m €
electrical distribution Rural Renewal of Development of Development Cybersecurity
networks broadband train control and artificial intelligence, of condominium research and exercise
connectivity management systems 6G and quantum scenarios
20 m € (housing) digital
Private charging computing registry
infrastructure
Page 18
Source: The Finnish Department of Treasury, Helsingin Sanomat
EU recovery package – Finland
5G to enable incremental value through a more connected society
Commercialization

“
5G impact analysis [ecosystem & scalability]
5G is a critical building block in building a Low High
Enabling technology
[digital platform]
greener, more digital and more resilient Europe. 5G capabilities
[technology features]

Page 19
Impact analysis by EY
European Investment Bank (EIB) report – a ”call to action” to boost investments
Accelerating the 5G transition in Europe Report, Feb 2021
• 5G is central to a large-scale technological, industrial and innovation transition globally, which
represents a significant opportunity for Europe

• 5G technologies are a driver of European strategic digital autonomy. European businesses developing
5G technologies, equipment and applications compete in a global market

• 5G can make European supply chains and industrial ecosystems more efficient and resilient

• 5G will enable SMEs to participate more actively in the communications ecosystem, because
• In the 5G future will see an increasing role for software compared to hardware (“softwarisation”);
• and a more distributed networking approach relying on mobile devices for computing and performing tasks
(“cloudification”)
• The European Commission and the EIB Group have a number of programmes that can be used to
successfully support SMEs in the 5G domain in Europe

Page 20 7 June 2021

 EY conducted an online survey of 1,012
enterprises in February and March 2021,
updating a survey conducted in 2020

Selected findings from

EY Reimagine Industry The survey is designed to explore
Futures Study enterprise behaviours, attitudes and
intentions toward emerging
technologies, with a focus on IoT and 5G-
based IoT.
Enterprise adoption of 5G is set to ramp up significantly in years to come

Investment in emerging technologies

Q. Which of the following emerging technologies is your organization investing in?

% of all respondents, n=1,010

Analytics and AI 64% 15% 12% 7% 2%

Robotics and automation 61% 14% 8% 10% 7%

Edge computing 42% 27% 17% 11% 3%

IoT 37% 19% 15% 20% 10%

AR/VR 17% 23% 16% 23% 20%

5G 17% 30% 26% 17% 11%

Blockchain 15% 21% 15% 30% 19%

Quantum computing 10% 23% 17% 40% 10%

Currently investing Plan to invest in next one year Plan to invest in two to three years

Monitoring technology, no plans to invest Technology is not relevant to my organization

Organizations have a broad range of 5G-IoT application scenarios in their sights

Demand for 5G-based IoT by application type

Q. Which are or will be the most significant 5G-based IoT application scenarios for your organization? (Please select all that apply)

% of respondents, N = 682 (enterprises currently investing or planning to invest in IoT)

41% 41% 40% 39% 39% 39%

38% 38% 38% 37% 36%
35% 34% 34% 35%
31%

Critical infrastructure Supply chain Systems and process Private Customer insights and Predictive or real-time Personalized products VR, AR and ultra-HD
monitoring and control management and optimization campus/network feedback operations and services video
orchestration capability

2021 2020

All 5G-IoT use case clusters are “in play.” Respondent interest in application types is broadly consistent with last year, with growing significance attached to
monitoring/control applications and private networks while interest in VR/AR has dropped year-on-year.
Winning 5G providers will provide trusted business outcomes, supported by a coherent
vision about what 5G-based IoT can provide
Many organizations are struggling to
identify the right 5G vendor
Respondents that believe their
organization is struggling to
64% identify the right type of
vendor to address 5G strategy
Enterprises want vendors to articulate a
more coherent 5G-IoT vision …
Respondents that believe vendors
need to articulate a more coherent
74% vision of 5G for their organization
to construct a robust investment
case
Current 5G interactions are tactical and
transactional …
Respondents that believe
their organization’s vendor
67% interactions around 5G are
largely transactional and
tactical
… and require support with use case
formulation
Respondents that will prioritize
74% vendors who are able to support
new or unique business models
… but enterprises are looking for
collaborator that can deliver business
outcomes
Respondents that believe their
organization will prioritize
vendors that can deliver 5G
79% business outcomes as
collaborators rather than pure
cost or technology benefits
They will prioritize vendors with specific
skills in critical areas
Organizations that will prioritize
vendors that offer deep industry
70% vertical expertise as part of
their 5G capabilities
% of respondents, N = 1,010
Monitoring and automation use cases are finding increasing favour among
automotive respondents
Automotive and transportation 5G-IoT use cases

Q. Which are or will be the most significant industry-specific 5G-based IoT application scenarios for your organization? (Please select three)

% of automotive respondents currently investing or planning to invest in IoT

41%
35% 34%
33%
31% 30%
29% 30%
27% 28% 28%
26% 26% 26% 26%
23% 24% 23%

16%

Freight monitoringAutomated vehicle Self-driving Vehicle diagnostics Vehicle and driver Map or navigation In-vehicle media Vehicle to vehicle Mobility as a Fleet management
production vehicles safety services and entertainment communications service

2021 2020

Automotive and transportation use case interest has shifted away from more some low latency-dependent applications – such as vehicle-to-vehicle communications – and
towards more manufacturing and remote monitoring services. However, interest in self-driving cars has risen while interest in vehicle safety and navigation use cases are
consistent year-on-year.
Healthcare respondents are focused on more sophisticated use cases in the wake of the
COVID-19 pandemic
Healthcare 5G-IoT use cases

Q. Which are or will be the most significant industry-specific 5G-based IoT application scenarios for your organization? (Please select three)

% of healthcare respondents currently investing or planning to invest in IoT

42%
40%
35%
32% 31%
29% 30% 30%
28% 27% 28% 28%
26%
22% 23%
21% 20% 20% 21%
18%

Patient monitoringConnected hospital Inter- or intra- Remote surgery Clinician training Connected Virtual care Chronic disease Clinician decision Passive collection
system data ambulances delivery prevention support of wellness data
sharing

2021 2020

In the wake of the COVID-19 pandemic, patient monitoring and virtual care delivery have become relatively more important as 5G use cases compared to passive
collection of wellness data. More sophisticated use cases that can benefit from 5G’s low latency are also rising: connected hospital, remote surgery and connected
ambulances
Surveillance, transport, training and tourism use cases have gained ground among
government respondents
Government and public sector 5G-IoT use cases

Q. Which are or will be the most significant industry-specific 5G-based IoT application scenarios for your organization? (Please select three)

% of government and public sector respondents currently investing or planning to invest in IoT

63%
57%
51% 53%

43% 42% 42% 40%

37% 36% 36%
27% 29% 28%

Local government services Building and site Transport optimization Public safety and Citizen education and Tourism services Public utilities (e.g. waste,
(e.g. public Wi-Fi) surveillance emergency response training water)

2021 2020

Local government services – including public Wi-Fi and city hall services – remain the leading 5G-IoT use cases, but a number of other use cases are growing in appeal
year-on-year. Building surveillance relating to government and military sites shows the greatest uptick.
Product traceability and personalized hospitality/entertainment resonate more than
before with consumer products and retail respondents
Consumer products and retail 5G-IoT use cases

Q. Which are or will be the most significant industry-specific 5G-based IoT application scenarios for your organization? (Please select three)

% of government and public sector respondents currently investing or planning to invest in IoT

42%
37% 35%
32% 34% 34% 33% 33% 33% 34%
28% 26% 27% 26% 28%
23% 25% 25%

Product traceability Personalized Sports and Connected home In-store customer Product monitoring Agri-business Drone deliveries Pre-emptive product
(e.g. goods hospitality (e.g. hotel entertainment venue appliances experience (e.g. goods services (e.g. ordering
provenance via guest services) services temperature) surveillance)
sensors

2021 2020

Consumer products and retail use case preferences remain largely consistent with last year. However, product traceability has gained appeal – reflecting the importance of
supply chain-driven use cases, while location-specific services that can take advantage of 5G – personalized hospitality and venue services – are also gaining more
prominence.
Manufacturing use case preferences are consistent with the prior year but goods
tracking has leapt in importance
Manufacturing 5G-IoT use cases

Q. Which are or will be the most significant industry-specific 5G-based IoT application scenarios for your organization? (Please select three)

% of manufacturing respondents currently investing or planning to invest in IoT

39% 38% 36% 36% 35%

32% 32% 31% 31% 31% 31% 31%
29% 28% 29% 27% 28%
24%

Tracking of goods Remote monitoring, Factory robot and Real-time machinery Connected products Product design Product as a service Factory process Predictive machine
inside or outside inspection and machine interactions control and tools innovation business models simulation and maintenance
factory diagnostics training

2021 2020

Manufacturing respondents tend to favour use cases where the location-specific and low latency credentials of 5G come to the fore – factory robot interactions and real-
time machinery control. However, goods tracking has jumped in importance, reflecting the importance of more efficient logistics and supply chain.
Cyber security
requirements
The transition towards 5G – increasing cyber security requirements
Research and Markets, 5G Security Market, June 2020

Adoption of disruptive
6.5B
Overall 5G security
2.56B
Infrastructure security
49.2%
Communications
technologies
Cloud/Virtualization, Mobility, Big
market by 2025 leading the segment security CAGR Data, Digitization/IP-fication,
Collaboration, Internet of Things

Standalone 5G – with new defence requirements

Secure networks
and platforms Multiple connections, new Individual network slices Cloudified networks, apps,
user equipment and devices and private networks services and virtualization
Service
orchestration
Secure devices Apps, content
Edge cloud
Secure applications and BSS/OSS
data Network
orchestration

The cloud complexity:

1. 5G distributed cloud – multiple cloud
Azure AWS Google
levels leading to distributed applications Core/RAN vendor
Transition phase services & network functions 5G VNF Software
2. IT Cloud – deployment covering virtual Public Cloud
• Evolved Package infrastructure, virtual resources and Company’s Edge
Core migrated to 5G virtual management to support 5G Platform
• Network virtualization Mobile Operator
distributed cloud, network functions and
• Distributed cloud 5G Network
• Integration with LTE orchestration Azure AWS Google
deployments - core,
• To provide enhanced
edge & far-edge
3. Enterprise Service Cloud – a combination
mobile broadband
• 3rd party APIs
of in-house and third-party cloud
capabilities offered to enterprise
Page 31 customers
The ”what” in 5G cybersecurity
5G will start affecting all parts of our lives because it will be the underlying infrastructure for so much of the critical services that
are provided to the public and in the enterprise supply chain
Supply Chain
The threat is the unknown,
suppliers manage their own
security controls and their
01 risk appetite may not align.
IoT
This threat is twofold,
consumer driven with masses
of insecure IoT devices and
05
Enterprise driven where
critical services are managed
via IoT devices
Page 32
Privacy
Different jurisdictions call for
different controls, failing to
understand how this impacts
02 consumer data may result in
regulatory fines.
Human
Insider threats come from
intentional attacks and
unintentional mistakes. Both
06
need to be accounted for.
Signalling
Aging protocols cannot be
easily replaced and therefore
compensating controls
03 should be implemented. In
tandem strategic planning to
move away from legacy
technology must be
considered.
Device /
Software
Vulnerable devices are
07
attached to the network
introducing numerous
threats to the operators
Cloud
Cloud adoption presents risk
within supply chain and
deployment areas, as the
04 operators outsource service
management, but not
accountability, to the
provider
5G Network
Addressing Non-standalone
and Standalone architectural
challenges like Network
08
slicing, integration with
existing infrastructure etc.
Semiconductor
shortage – market
outlook
Semiconductor market outlook

► Semiconductor market to grow 12,5 % vs. 10,8 % in 2020

► Growth led by 5G, laptops, server, smart home and wearables, automotive,
Wi-Fi access points
► Shortages are expected to ease by the end of Q3 21
Financial Times, 7.6.2021
► 5G semiconductor revenues will grow 116 %, total mobile phone semiconductors will grow 23 %
► Notebook PC semiconductor revenues will grow 18 %
► Server semiconductor revenues will grow 17 % as digital transformation increases
► Automotive semiconductor revenues will grow 14 % as shortages expected to mitigate by year end
► Connected Home, Wearables , and Entertainment semiconductor revenues will grow 16 %

► Intelligent edge inflection point is coming as optimized compute intersects with AI

► 5G deployments of mid-band spectrum and mmWave in dense geographies, private networks, transportation,
and large venues, scales by middle of decade
► Autonomous vehicles will not reach high volume until 2035; commercial fleet and Robot-taxis will come first along with Mobility-
as-a-Service

Page 34 7 June 2021

Source: IDC
 Technology drivers and semiconductor long term growth

2020 – 2025 CAGR

Edge 33,0 %

WLAN Access Points 32,7 %

FASTER | SMALLER | SMARTER
► 5G
5G Smartphones 26,1 %
► Cloud Infrastructure
► Advanced packaging
Smart Home/Wearable 10,0 %
► AI accelerators
► Network transformation Server 6,8 %
► Autonomous vehicles
► Intelligent edge Workstation 6,1 %
► Smart home
► Wearables Industrial 5,6 %

Mobile infrastructure 3,4 %

PC 2,9 %

0,0 % 5,0 % 10,0 % 15,0 % 20,0 % 25,0 % 30,0 % 35,0 %

Page 35
Source: IDC
Q&A
 Thank you
Peik Schulman
5G and IoT strategy, Business Development
peik.schulman@fi.ey.com | +358 40 709 6868

Page 37 7 June 2021 Presentation title


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