- Major analyst firms like Deloitte underestimate 5G's transformative role in industry, focusing on consumer applications
- The U.S. is losing its competitive edge in global technology due to the lack of a unified Industry 4.0 strategy
- Telecom operators have a critical opportunity to capitalize on the 5G revolution – but will they take it?
Another day, another embarrassing analyst flub.
You can always tell when portentous changes are coming to the comms industry because big-name industry analyst firms start to get things entertainingly wrong.
In January, it was Gartner making an absolute arse of itself with its hilariously ill-advised Magic Quadrant for 4G and 5G Private Mobile Network Services.
This month it’s Deloitte’s turn to wear the analyst cone of shame with its latest telecom industry forecast.
Telcos have struggled to “find large use cases that require 5G speeds and features,” said Deloitte. “That’s because things that require the speeds and low latencies 5G offers, like self-driving cars, augmented/virtual reality goggles and remote telesurgery are not expected to see broad adoption until the end of this decade, if at all.”
My friends, this is some Enron-level analysis.
Deloitte’s examples of 5G applications are what poker players call a “tell.” In this case, it tells me that Deloitte doesn’t know what it’s talking about.
Self-driving cars, VR goggles and telesurgery were first proposed in the 1950s, ’60s and ’90s, respectively. Things have progressed since then. A lot.
Today, the most exciting uses of 5G are in heavy industry — mining, rail networks, ports, utilities and so on. 5G is being deployed at these businesses as the cloud-native network infrastructure to support transformational digital upgrades based on AI, automation, predictive analytics and robotics.
These Industry 4.0 applications are proven and governments worldwide are enacting policies to accelerate their deployment and reinvent their economies.
But not in the U.S., the only developed country without a centralized government-incepted national strategy for digitalization (or effectual gun control, or universal healthcare, or the metric system…. There’s a pattern here, see?).
Instead, America trusts in Big Tech companies to do all that cloud and AI malarkey. This is a fatal miscalculation because Big Tech is in the business of making as much money as possible, regardless of the consequences to the little people, and not of building digital industrial infrastructure for the good of the nation. And, in fact, this digital oversight will certainly cost the U.S. its No.1 spot in the global economy before the midpoint of this century (remember this in 2050 when you shed a tear over that 401K, wondering where it all turned sour).
Islands in the stream
How can Deloitte and America get this so wrong? In a word, “insularity” — an affliction that pervades the U.S. as a whole and its tech market in particular.
Like America, Deloitte’s report authors (three Americans, a Canadian and one chap from India) apparently haven’t clocked that the world — and the communications industry — is on the cusp of the greatest communications transition of all time.
We are following the money into the vast and unmapped hinterlands of industrial digitalization — a world where the entire global economy is blown into fragments and rebuilt — like the Six Million Dollar Man, Better! Faster! Stronger! — using Industry 4.0 technologies to create a golden age of unprecedented industrial profitability, efficiency and sustainability.
How big is this market? To paraphrase Douglas Adams: “Industrial digitalization is big. You just won't believe how vastly, hugely, mind-bogglingly big it is.”
Some very astute people inside vendors Ericsson, Huawei, Nokia and ZTE have grasped the scale of the opportunity and are pivoting their companies towards it.
A handful of service providers — notably T-Mobile and China Mobile — also understand the assignment and are building infrastructure that will support the new industrial world, add value to it and allow them to profit from the transition, rather than just acting as a utility, delivering metered data to and from the factory door.
And I grok this Industry 4.0 scene, too, obviously. (Join the club; we have t-shirts).
Biff it! Biff it real good!
Carriers have an obvious role to play in this market in the U.S., facilitating the licenses companies need to run the private 5G networks on which Industry 4.0 apps run. This is a classic foot in the door for them, an opportunity for carriers to follow up by offering systems integrator services that deal with the critical issue of connecting specialized, vertical OT (operational technology) networks to horizontal 5G infrastructure.
The problem is that when firms of Deloitte and Gartner’s stature counsel carriers and focus on 5G as a consumer technology or AI as a standalone technology, they listen to them (unlike when I tell them stuff and they just say I’m annoying, which is certainly true but equally doesn’t mean I’m wrong).
"Given that 5G now covers more than half of the global population, operators have an opportunity to take a breather and improve their capital intensity ratios," Stefan Pongranz of Dell’Oro Group told Fierce Network.
This is akin to suggesting that operators have an opportunity to go out of business twice as quickly as they otherwise might. Actually, their survival relies on not taking a breather, upping the pace and embracing the Industry 4.0 opportunity as if their survival depends on it. Because it does.
There’s vast irony in analysts — the ones that pride themselves on their expertise in identifying crucial technology transitions — completely overlooking the most significant technology transition of all time (partly because they ignored their own advice to their clients to eliminate departmental silos. I mean, really?)
However, the situation also exposes a disturbing reality: the U.S. is losing the crucial Industry 4.0 battle. In fact, the dangerous confluence of crap analyst reports and a level of domestic arrogance that borders on psychosis means America isn’t even aware that there’s a tech revolution taking place around it.
Want to learn more about Industry 4.0 technology and how it is resetting the global economy, except in the U.S.? Check out these articles and videos:
- Op-Ed: $20B port crane farce points to bigger problems for US
- Exclusive Op-Ed: World’s first Level 4 autonomous network makes comms history
- Op Ed: Here's what the industrialized world could look like in 10 years
- FNTV: We need 6G for the trillion-device network
- FNTV: AI delusions – Don't bring sanctions to a tech fight
- FNTV: Gartner’s Magic Quadrant report: A magical misstep for 5G?
- Op-Ed: What hope, digital America?
- FNTV: Why the UK government keeps failing at digital strategy
- FNTV: The US built the world's most advanced railway but it’s not in America
- FNTV: The global south rises - A new 5G power shift
- Op-Ed: Deutsche Telekom still doesn’t ‘get’ 5G – and Germany is the big loser
- Op-Ed: AI infiltrates US nuclear plants via unregulated back door
Steve Saunders is a British-born communications analyst, investor and digital media entrepreneur with a career spanning decades.
Op-eds from industry experts, analysts or our editorial staff are opinion pieces that do not represent the opinions of Fierce Network.