Telecom executives say Taiwan’s best bet to tap the 5G market is via the Internet of Things (IoT), an evolving concept in which all types of everyday devices are connected to the Internet. According to consultancy McKinsey & Co., IoT relies on sensors and actuators embedded in physical objects, which are linked through networks. Those networks typically use the same Internet Protocol (IP) that connects the Internet.
“5G will transform wireless connectivity,” says Chen Shyang-Yih, president of Chunghwa Telecom Laboratories. “It will allow us to move from a focus on smartphones to a comprehensive ecosystem in which all kinds of different devices are connected to the Internet.” With Taiwan’s strengths in ICT, many Taiwanese firms are eager to invest in IoT, he notes. “It’s a big opportunity.”
Investors would seem to agree. In June, Fu Hwa Securities Investment Trust Co. launched an IoT investment fund that aims to raise NT$20 billion (US$625 million). The fund is targeting smart manufacturing, online banking, autonomous vehicles, cloud computing, Big Data, and smart logistics.
Also in June, smartphone chip designer MediaTek said it would invest more than NT$200 billion (US$6.15 billion) over the next five years on new technologies, among them 5G technology. At a press conference, MediaTek chairman Tsai Ming-kai said the company has already invested in IoT technologies such as autonomous vehicles, and plans to invest in deep learning and virtual reality in the future.
Some Taiwanese firms have already begun providing IoT enterprise services. Last year, Far EasTone, Taiwan’s No. 3 telecom carrier, launched a smart-city system in Tainan offering transportation, education and disaster-prevention services. The system was featured at the Global World Mobile Congress held in Shanghai in June. The company expects its Tainan smart-transportation system to attract 500,000 users by its third year of operation.
Far EasTone is targeting the consumer IoT field as well. In July, it launched a remote home-surveillance service that allows subscribers to monitor their homes when they are out of the house. The service functions by way of an internet-enabled security camera, which displays surveillance footage on the smartphone of a subscriber. Far EastTone says the service alerts subscribers when it detects an incident, such as the presence of an intruder. The company expects its home-surveillance service to attract 300,000 subscribers within three years and help it to take a 37% share of Taiwan’s smart-home market.
Meanwhile, Far EastTone is teaming up with Swedish telecom equipment vendor Ericsson to establish Taiwan’s first 5G laboratory at T-park in New Taipei City. The Lab will focus on developing innovative 5G technology and applications, such as enhanced network performance, IoT core platforms, cloud-based technologies and advanced radio technology, according to Far EasTone.
“Through our joint efforts with Ericsson, we are taking an important step toward bringing 5G capabilities to Taiwan, enabling the deployment of next-generation ICT applications and pioneering 5G services for consumers and enterprises, especially in the areas of transportation, media and utilities,” Far EasTone president Yvonne Li said in a statement.
Far EasTone aims to create an open 5G ecosystem with trials beginning as early as 2018, a company spokesperson said by email. Once it launches 5G services, FET expects its revenue mix to change significantly.
For some of Taiwan’s struggling tech firms, 5G and IoT may offer a path to revival, market insiders say. Foremost among those companies is handset maker HTC, whose fortunes have flagged amidst smartphone commoditization. In July, HTC announced it had joined the U.S. government’s Advanced Wireless Research Initiative. HTC will provide virtual-reality systems to support the program’s testing platforms, the Taoyuan-based company said in a statement. Other companies involved in the program include AT&T, Verizon, T-Mobile, Samsung, Nokia, and Qualcomm.
The U.S. National Science Foundation will lead the US$400 million program, which “aims to enable the deployment and use of four city-scale testing platforms in the next 10 years,” according to a White House statement. Participating in the program is a good opportunity for HTC, observes the 5G Program Office’s Lai. “It’s quite possible VR will be the killer application for 5G,” he says.
What Exactly is 5G?
5G is one of the telecom sector’s more nebulous buzzwords. In the sense that it will supplant 4G, 5G is a next-generation radio-access technology with data-rate and latency targets. But there is also a belief that 5G will revolutionize device connectivity in a way its predecessors did not, laying a foundation for a hyper-connected world. This view holds that networked cells and devices will facilitate Machine-to-Machine (M2M) services and the Internet of Things (IoT).
How then should 5G be defined? Researchers at the London-based GSM Association, which represents mobile operators globally, say both of the above perspectives are valid, but that unique sets of requirements are associated with particular new services. Lumping them together as a single set could pose challenges for implementation, they say.
Certainly, “the jump from 4G to 5G is greater than from 3G to 4G,” says Mark Hung, a vice president at research firm Gartner. “Previously, it was just about speed.”
Given the complex transition from 4G to 5G, experts say a strong industry commitment will be necessary to ensure that the technology is standardized and deployed by the target date of 2020. At the same time, the race is on among nations to be the first to implement the technology. “2020 is the official date, but we’re seeing intense competition among different countries trying to roll it out before that,” Hung says. “It’s really about bragging rights – being the first country in the world to deploy 5G.”
Industry observers do not expect Taiwan will be the first to launch 5G, or to lead the development of the 5G standard. South Korea and Japan are far ahead of Taiwan in that regard.
For consumers, who defines 5G and when it is deployed are less important than how the technology could transform connectivity. According to the Taiwan Association of Information and Communication Standards (TAICS), 5G will facilitate a cluster of cloud-connected devices across a range of fields including health, entertainment, and motoring. As a result, apps no longer will be confined to the device on which they run, but will allow devices in the same cluster to communicate with one another.
In its 2015 Taiwan 5G White Paper, TAICS explains how this connectivity might play out in a real-life scenario: a person driving on the road suddenly being struck by a seizure. Fortunately, she has a safety feature app on her smartphone that connects to a wearable device monitoring her health and to actuators on the car linked to a safe-braking system. These devices are all also connected through the cloud to her emergency contacts. If the driver were to suddenly have a seizure, the safety app on her smartphone would automatically engage the safe-braking system, which would pull the car over safely to the side of the road. Meanwhile, the wearable device would relay information about her health as well as her location to her emergency contacts. Her car would also be able to communicate with other vehicles on the road to avoid a collision while it was pulling over.
Meanwhile, with 5G still several years away from adoption, researchers at the GSM Association, which represents the interests of mobile operators worldwide, urges businesses and consumers to take advantage of improving 4G LTE technology. In a December 2014 report, they note that operators have made solid progress boosting the data speeds of their existing networks.” Thus, “while there remain monetization and interconnect issues around LTE, these advancements will enable operators to offer many of the services that have been put forward in the context of 5G long before 5G becomes a commercial reality,” they conclude.
The News Lens has been authorized to repost this article. The piece was first published by Taiwan Business TOPICS.
(Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei.)