One Call All the Answers - 5G Calling

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5G is here: Realising your potential
within the mobile economy
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alltheanswers

After all the
waiting, 5G is here...
With all the potential that it holds, there is
little doubt that 5G will be a game changer.
Nevertheless, the business case for mobile
operators remains difficult: huge spectrum
and infrastructure capital investments are
required and compelling economic models for
monetisation are yet to be fully developed.
So will 5G prove a golden opportunity
for mobile network operators (MNOs)
to expand their customer bases and tap
into rich new revenue streams – or will
the gold wear off and lose its shine?
Much will depend on how much extra
consumers are prepared to pay for superior 5G
bandwidth, capacity and smaller delay times
(lower latency gaming) – and on the extent
to which MNOs can build new partnerships
and develop profitable use-cases for their
enterprise customer base, leveraging the
connectivity of the Internet of Things (IoT).
Indeed, many commentators believe that the
initial value of 5G will be in the enterprise,
or B2B customer segment, through these
new use-cases and IoT. It may be several
years before 5G really takes off in the
consumer segment – just as it took some
years before 4G spawned new mass services
such as rich media & video content.
In this publication, we will explore the
key factors in enabling 5G economic
success and outline viable value-adding
business case approaches to ensure a
competitive, secure mobile ecosystem,
building a connected United Kingdom.
We look at a range of topics:
–– The global backdrop and 5G
differences by continent
–– The size of the prize –
commercialisation of 5G
–– Moving from hypothetical use cases
to compelling business cases
–– Enterprise partnerships and market models
–– The consumer proposition – will
there be a rush to 5G?
–– IoT – use-cases in action
–– The regulatory landscape against
which 5G needs to succeed
The 5G journey is just beginning. For
MNOs, starting in the right way will
be critical to making it a success.
Ian West
Partner, Head of TMT
KPMG in the UK
The first official 5G services have
gone live in the UK and more are set
to quickly follow.
Contents
Customer
experience
p09
New
business
models
p04
The global
perspective
p03
Internet of
things
p12
Regulation
p16
Click on the images below to go
directly to the different sections
One Call All The Answers
© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
02

The global
perspective
In the initial stages, 5G will be
quite different in each part of
the world. In the US, where Verizon
and AT&T are the main
first movers, 5G should be
through fixed wireless access
(FWA) – bringing the huge
capacity of 5G into people’s
homes without the need
for any cables. The same is
true in Australia via Optus
and Telstra. However, this is
for home, not mobile, use.
In the UK, 5G is being targeted
for mobile usage right from
the start. But the rollout will
come in two phases, with
‘full’ 5G not expected to be
available until around 2023.
Differences in
5G by continent
The first wave in the UK
this year, known as Non
Standalone (NSA) 5G, will
make use of the existing
base stations for 3G and
4G networks with new
antennas placed on them.
Full 5G - Standalone (SA) 5G
- will run on new networks
with new base stations.
The cost of creating NSA
5G will be much lower than
for SA 5G – but will still be
significant. There are perhaps
50-60,000 base stations
in total around the UK, and
they will all (in time) need 5G
antennas. That will represent
a major investment, along
with installation costs and,
in some cases, base tower
reinforcing needed (the
antenna weigh around
40kg). A Government
report estimated that
between 2018/19 and
2020/21, around £6.85
billion is set to be invested
in broadband and 5G
infrastructure in a mixture
of private and central
government funding.
Some of these costs
will be offset by a rise
in network sharing. We
will see an increasing
move from the passive
sharing of today (where
operators share the same
tower but have their own
separate antennas on
them) to active sharing
(where operators share
not only the tower but
also the antennas).
SA 5G will be even
more expensive. New
base stations will be
needed – perhaps five
times as many. We
will see a process of
network densification
with smaller base stations
(or micro cells) being
installed in urban areas
to boost capacity.
Another issue is that many
European countries have
not started the process
to create the framework
conditions to build and
operate 5G networks. So
MNOs may find it difficult
to offer their early adopter
customers the 5G roaming
overseas that they might
want and expect.
Who decides what and
where 5G can be
5G wireless is an explicit set of technologies specified
by 3GPP as “Release 15” and “Release 16”, and
recently has begun a track for “Release 17”. 3GPP is
an organisation consisting of essentially all the world’s
telecommunications standards bodies who agree to share
the definition of mobile wireless. Today, 3GPP specifies
which technology constitutes 5G wireless and, by exclusion,
which is not, as well as where the networks will be.
03

The size of
the prize
There is a huge 5G prize to be
won – by those operators and
businesses that can create
the right business models to
harness its potential
wire-cutting services.
Research and analysis by
KPMG has identified an
estimated £3.5 trillion in
value to be unlocked globally
through 5G use-cases over
the next seven years. In the
UK specifically, we estimate
some £106 billion of value.
This will be generated through
the five features of 5G that
are the key drivers of value:
capacity, reliability, latency,
bandwidth and efficiency.
It is the combination of
these features that will be
transformational in what
the MNO can enable for
the enterprise customer.
Consequently, it won’t only
be the MNOs that profit – but
their business customers
too, across sectors, including
government, finance,
healthcare, manufacturing,
consumer goods/retail and
technology/media/telecoms.
New business
models
04

This value will be realised through the
business outcomes that 5G can deliver.
There are six components of what we
call the DNA of 5G enterprise value:
Machine enhanced
decision making
Minimising human error
and improving the quality
of decision making.
Data rich environments
Unleashing new business models
through the vast amounts of
additional data from sensors which
can be connected to IoT through
5G, whereas under 4G this can
only happen through Wi-Fi.
Visualisation
Providing staff or customers
with deep knowledge and
experience overlays.
Agile automation
Automation with minimal trade-off of
customisation, flexibility or quality.
Intelligent efficiency
Ubiquitous access to data and
computer power, reducing friction
and wastage while enhancing quality.
Trusted connections
Providing critical services/products
with secure data and network uptime.
Gaming, healing...
the huge possibilities of 5G
However, it won’t be a case of throwing
the 5G switch and seeing all the new
values emerge: it will take time to
develop. We see three time horizons:
0-3 years
Private or campus style use-cases
These will be private networks
in a limited geography – such as
manufacturing environments.
2-6 years
City use-cases
As 5G networks become publicly accessible
in cities, various ‘decentralised’ verticals
will be able to unlock value, including
healthcare and financial services, along with
mobility, live entertainment and more.
5+ years
Destination unknown
It is almost impossible to predict the impact
of 5G this far into the future, but technological
advancements in edge computing and
Artifical Intelligence (AI) could mean a host
of new business case opportunities.
At Oulu, Finland, where there is a 5G development centre, a
5G hackathon was held in 2017. The top ideas included:
–– A game streaming service
–– A way to do stroke rehab through VR
–– Smart bandages that track your healing
–– A way for parents to interact with babies
who are stuck in incubators
All of these ideas need either the high bandwidth, low
latency or low-power, low-cost aspects of 5G.
One Call All The Answers05
© 2019 KPMG LLP, a UK limited liability partnership and a
member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved

Developing enterprise
partnerships to
generate returns
Operators have already sunk
significant sums in buying
spectrum from Ofcom,
with the first auction in April
2018 raising around £1.4bn.
Ofcom is working on making
more spectrum available for
future wireless broadband
services by December 2022.
The cost of building out an
actual 5G network is complex
to calculate. Some costs
are sunk already in creating
the existing 3G and 4G
networks, with incremental
costs on top for the new 5G
antenna and other equipment.
Separating out incremental
from fully allocated costs
will not be straightforward.
But operators need to do
this in order to understand
the real costs and returns.
Huge capital expenditure
will be required for the
deployment of complex
5G networks.
As it is unlikely that consumer
mobile spend will cover these
costs, the focus must shift
to enterprise solutions.
For this, MNOs will need
to enter into partnerships
on a level not seen before.
The breadth of potential
5G solutions will create a
market too big for them to
handle alone. If they do not
lead in orchestrating such
collaboration, the device
manufacturers or software
application providers will
seize the initiative instead.
They will have to think beyond
conventional connectivity
driven revenue, and become
more like a consulting
business – finding solutions
for their customers’ existing
problems or helping them
create new business models.
This will require a combination
of 5G connectivity, IoT, AI, big
data processing technologies
and security systems.
One example of how new
business models could be
created is the live events
market. Operators will be
eyeing opportunities to
not only give fans a more
innovative experience via
5G services, in the arena or
stadium, but also help the
event organiser improve
stadium management. By
being part of the sports
ecosystem, the potential
benefits to operators include
increased average revenue
per user (ARPU) on the
consumer side and growth of
their enterprise businesses.
As a business leader, the
key is to look at 5G and what
it can do for your company
for IoT in terms of a 2-3 year
road map. What can I do
with more bandwidth and
minimal latency on a project by
project basis and the impact
on the business case?
Operators are already thinking
about partnering with other
ecosystem players including
tournament organisers, social
media companies, device
manufacturers and video
game companies. Mobile
gaming through the cloud,
in particular, is a market
that could be dramatically
enhanced through 5G, bringing
gamers whole new levels of
experiential interactivity.
06

The competition to
obtain first mover
advantage is likely
to be fierce.
Making
partnerships work
We have already seen
MNOs partnering with
other stakeholders for 5G
network rollouts and use-case
testing – such as Vodafone
with IBM and O2 inviting
FTSE 100 businesses to
participate in its 5G testbed.
There has also been a flurry
of activity around investing
and sharing 5G infrastructure
build such as towers, fibre
and edge data centres.
But what will MNOs need
to consider in order to
make these partnerships,
joint ventures and
collaborations work?
The same good principles
in any deal negotiations will
apply – but the imperative
to get it right will be even
higher than the norm.
MNOs will need to ensure
that the risk / rewards are
distributed sensibly between
the parties. Developing pilots
/ test applications for vertical
markets is challenging,
but the ultimate goal is to
commercialise the solution
and this requires careful
consideration on how the
partnering is structured.
Operators will need to be
very clear about why they
are entering into a deal. They
must have a laser focus on:
–– The specific value creation
being enabled by the
deal and timescale
–– How 5G implementation
costs will be shared
–– How revenue streams
will be shared
–– The governance
structures around it
Players in the telecoms industry
already collaborate and partner
to some extent. But under 5G,
this will need to intensify.
We are also likely to see
increased levels of acquisitions
in the market. The big
telecoms players will look to
buy up niche technologies
from developers that will
enhance their offerings - in
particular in the AI space, as
well as edge computing.
Some MNOs may also look
at suitable ICT businesses
to bolster their enterprise
capability, seeing this
as a quicker solution
than joint ventures.
MNOs will need to continually
scan the market for new
technologies, services and
products that will bring
competitive advantage.
07

Moving into
adjacent markets
It may be helpful to use the
analogy of retail, which has
been transformed in recent
years by the increasing
migration of consumers
to digital channels. The
successful retailers of today
are those who have blurred
the boundaries of bricks and
mortar stores with digital
channels so that customers
can interact how they wish,
such as buying online and
collecting in-store. Retailers
who failed to successfully build
a digital channel alongside
their physical networks
have all but disappeared.
Operators will need to form
partnerships to leverage
the opportunities of 5G.
So it is with 5G. The wireless
CSPs that can blur the
boundary between the fixed
aspect of their infrastructure
and the variable aspect of
virtualisation, linking the two,
will be the winners. They
need to create an environment
where their customers are
not buying services in either
the physical world or the
virtual world, but rather are
buying services that are
blended and personalised.
In the consumer space,
this could mean forming
a partnership with a
manufacturer of ‘smart’
washing machines or other
appliances. The washing
machine will have a SIM
card in it connecting it to the
operator’s 5G network.
The consumer may buy
the appliance under a new
model, such as ‘pay-per
-wash’, given that such a
charging mechanism will be
possible through the data
that can be generated and
captured by the IoT-connected
machine. By entering into this
partnership, the appliance
manufacturer gains the benefit
and value of the operator’s
5G network (and pays for
it), while the operator opens
up a new revenue stream.
In the B2B space, an example
could be a training company
delivering virtual reality based
training to businesses through
AR headsets. The training
company would upload its
software to the operator’s
secure cloud and send out
headsets together with a
‘router’ device so that the
headset would connect to
the training via the operator’s
5G network. Again, the
training company receives
the benefit of, and pays for,
the value of the low latency
and high bandwidth of the
operator’s 5G network and
its cloud capacity; while the
operator benefits from an
additional income source
through the partnership.
These are just a couple
of examples of the new
paradigms that could
emerge. Through the IoT,
cloud data streams, device
connectivity, and network
slicing to manage and charge
for different capacities and
capabilities, operators will
have the opportunity to
facilitate new services to
new sets of customers in
both the consumer and
enterprise segments.
Continued success requires growth into
adjacencies - implying investment in
new capabilities.
Core
Initiatives that reinforce areas of strength, increasing
the resilience of the current business model.
Adjacencies
Initiatives that involve moving into adjacencies: either
new products or customers, building on the core.
Transformation
Initiatives that redefine the financial, business, and
operating models, requiring significant investment.
Finding new customers
Core
New
customers
Market
penetration
Product
bundling
Platform
business model
New market
entry
New data
solutions
New devices
and solutions
New client
sectors
Adjacencies
Transformation
Creatingnewpropositions
08

With 5G services beginning
to become available in certain
locations this year, MNOs
will be keenly watching the
signals to determine customer
sentiment. Will there be a
stampede to sign up for 5G?
Will there be
a rush to 5G?
It doesn’t look likely, at least
in the early stages. There are
several reasons for this.
Firstly, most of today’s
contract customers are tied
in on existing deals. Many
of today’s (4G) handsets are
expensive, costing £1,000
or more, and most contract
customers will have taken
12-36 month contracts to
spread the cost of the phone.
Unless they can afford to
pay the balance off – or a
rival provider offers to do
so – then that debt will be
a block to moving. They are
likely to be inclined to wait
until their present contract
is nearing its natural end.
Customer
experience
09

Customers on SIM only contracts,
meanwhile, are far more likely to
think about making the move.
However, we also have to
factor in the cost of the new 5G
handsets that will be required.
These are likely to be more
expensive than 4G handsets, a
cost that could deter many people
from moving to a 5G service,
at least in the first instance.
There are also questions over
the availability of 5G handsets,
particularly in the early days.
Apple’s 5G device, for example,
is not expected to be available
until around September 2020.
At present, 5G has limited
availability and not all mobile
network providers are offering
the same coverage. Even on
4G, only two thirds of the
country can currently receive
full coverage and, according to
press reports, discussions are
underway with the main MNOs
to expand network coverage
within rural areas. Could this
slow down 5G uptake further?
The ability to switch providers
by a free text message, rather
than having to obtain a PAC
code, came into effect in July
this year and is an interesting
piece of synchronicity with 5G.
But while it has made switching
much easier for consumers, it has
not sparked a 5G rush in itself.
There’s no doubt 5G will reshape
the market – but it won’t happen
overnight. Consumers are likely
to adopt more of a ‘wait and see’
approach until there is a use-case
that cannot be experienced on 4G.
Does speed matter?
Mobile screen time is skyrocketing - Nielsen 2018 research shows not only are we
using our mobile phones to access the Internet, but stay on-line via these devices
for longer. On average, we now use our mobiles to access the Internet for an hour
or more each week compared to two years ago – bringing on-line time, via a mobile
device, up to over nine hours for the average person. While the improvement in speeds
under 5G may not necessarily mean that people spend less time on their phones,
the improvement in the quality of the time spent is just as important. Faster speeds
will enable quicker web browsing via mobile devices, and quicker downloads.
Plenty has been said about 5G already, to put that into context, the absolute
maximum that 4G can handle is 60MB/sec. With speeds of up to 100
gigabits per second, 5G is set to be as much as 100 times faster than 4G.
Do you remember when 4G felt lightning fast - not anymore.
What does 5G mean for websites? On a 4G connection, to fully load the average
mobile landing page it takes 22 seconds. However, research indicates 53% of people
will leave a mobile page if it takes longer than 3 seconds to load (according to Google)
compared to 5 milliseconds with 5G. We’ve also been thinking about some longer-
term impacts of 5G’s extra speed. If page loading times really do drop down below
5 milliseconds across the board, then it wouldn’t shock us to see page loading times
reduced n importance in search engine rankings, perhaps even removed altogether.
5G’s extra capability could also see web designers introduce more elements
of augmented and virtual reality into websites. Traditionally this has been used
on apps, where the tech is downloaded once and installed rather than loaded
on a connection every time a site is accessed. With 5G’s increased speed, we
could see these elements incorporated into mobile sites very soon.
We are going to be generating a lot more data. We
are talking about hundreds of megabits for 4G, with
5G we are going to be seeing multiple megabytes
of speed. Think about downloading an entire season
of Star Trek in a few minutes compared to an hour
it would take with current technology. This starts to
matter to a consumer and may provide a compelling
reason to upgrade.
© 2019 KPMG LLP, a UK limited liability partnership and a member
firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved

Searching for
the killer app
But what will 5G actually bring
consumers? Improvements to
speed, capacity and reliability
will be welcome – but for
most people, 4G already
serves them well. The full
5G service offering lightning
fast speeds of up to 20Gbps
won’t be available until around
2023. Initial networks are
more likely to offer speeds
of 150-200Mbps most of
the time, perhaps hitting
1Gbps in quiet times.
It will require more than an
uplift in what most consumers
already regard as ‘hygiene
factors’ to entice people to
move, en masse, to a service
that could cost them more
on a monthly basis and
also require them to buy an
expensive new handset.
Vodafone’s 5G launch stunt,
in which it hosted “the UK’s
first live holographic call using
5G”, linking up a footballer
in Manchester with the
company’s Newbury office,
was an eye-catching moment.
It underlined the power of a
5G network and the ability
to create ultra-fast, high
bandwidth, stable connections.
For 5G to succeed with
consumers at the level
MNOs hope it will, new
‘killer’ capabilities will be
needed. The question is,
what will these be?
It may be that the biggest
change 5G will bring to
consumers is in virtual and
augmented reality, if this can
be successfully incorporated
into 5G handsets. As phones
transform into devices meant
to be used with VR headsets,
the very low latency and
consistent speeds of 5G
will take customers into an
internet-augmented world,
if and when they want it.
As we referenced earlier, 5G
may also have a powerful
impact on the gaming industry.
The sector is actively preparing
itself for the new opportunities
that 5G and the accompanying
cloud-based capabilities will
bring to mobile gaming. AAA
gaming publishers recently
announced mobile versions of
their premium games at the E3
expo this year, while Google’s
cloud gaming service, Stadia,
will be reliant on a robust
5G connection. MNOs need
to ensure that they can
handle these connections,
and build the partnerships
necessary to deliver the
exceptional experience
customers will be expecting.
There is no doubt that new
winning propositions and
services will emerge. At the
moment, though, outside
gaming, it is almost impossible
to predict what they will be.
Operators need to play to their strengths, exploring ideas
that leverage new technologies.
Propositiontype
Customer type
Telco consumer
(e.g. current base)
Network
connectivityDatasolutions
Specialiseddevices
andsolutions
Adjacent consumer
(e.g. buyers of IoT)
Enterprise
(e.g. SMEs)
Customer digital
solutions
– Digital payments
– AR experiences
– Content play
Mobile connectivity
– Core mobile
connectivity & bundling
– Global footprint
– Smartphone-
connected car
Device connectivity
– Network connectivity
for IoT devices
– Cloud platform
application processing
Seamless connectivity
– Connectivity for
transport and logistics
– Remote working
solutions
User data applications
– Location-based
solutions
– Usage-based
programs
– Smart city advertising
Predictive & operational
– Location and user data
– Network scheduling
– Data-driven decisions
– Proprietary cloud
platforms
Enablement & digital
– IoT enablement
platforms
– Digital IoT monitoring
– Cloud data streams
Integrated connectivity
– Connected home
& security
– IoT bundles (off-the-shelf)
– Connected health
– Connected car
Smart business
– Mobility solutions
– AR/VR for workforce
– Connected store/office
– Autonomy applications
11

IoT will be among the top
drivers of 5G value.
Use-cases in
action: smart
manufacturing
The ability of 5G to support
IoT networks, connecting
multiple devices in a
high-speed, low latency,
ultra-reliable environment,
will be transformational.
Companies will be spending
trillions of pounds on IoT
in the next five years.
One of the clearest, and
earliest, beneficiaries of
IoT will be the industrial/
manufacturing sector. The
Industrial Internet of Things
(IIoT) is no longer just a
futuristic idea. More and
more, it is already becoming
the way business is done.
For companies that make
parts, components and other
products, the IIoT is integral
to creating smart factories.
Leading companies around
the world are using IoT to
bring operational technology
(OT) and informational
technology (IT) together for
the first time. By creating
a universe of connected
things, they are able to:
–– Collect and analyse
data more effectively
–– Optimise business
practices
–– Improve the customer
experience
–– Drive new revenue
streams
In manufacturing, the linear
process, whereby materials are
ordered, machines are pre-set,
and managed by people to
produce homogeneous goods,
with quality only assessed at
the end of the process, will
be replaced by a dynamic,
self-regulating, self-adjusting
process that allows agility,
speed, higher productivity,
lower reworking and greater
capacity for customisation.
Through smart sensors
connected to automated
processes, machines will be able
to update themselves and initiate
a new process when there is
demand or halt a process if an
issue is detected. The linear
process becomes circular in an
always-on value chain. Through
a combination of AI-based
planning, edge computing, high
bandwidth with low latency,
connected machines, AR-
enabled workers and integrated
logistics, the way manufacturers
work will be transformed.
The key abilities of 5G are
highlighted in several ways:
–– Capacity is needed
for the vast number
of sensors which will
stream data to mainframe
computing platforms
making the decisions.
–– Bandwidth and latency are
needed if workers are to
make informed decisions
as to the real-time status
of the machines.
–– Security is needed to
keep the private network
up and running, and
prevent any malicious
attacks which could
compromise the process.
We estimate that manufacturing
will be the earliest significant
beneficiary of the value of 5G - to
the tune of £499bn globally.
Internet of
Things (IoT)
12

Manufacturing
How will 5G revolutionise the
UK manufacturing sector?
Key ingredients
Low latency
Low delay will let us
accurately position
and control devices
at rapid tempo.
Wireless control
Separating sensors and
actuators from wires
will free our ability
to operate in space
and give us access
to a much wider and
richer set of info.
Robotics
Teleoperation (being
able to support humans
in the loop where it
is too dangerous to
operate or inefficient
to have them operate
devices) requires 5G.
Networked
intelligence
Industrial control
requires a level of
networked intelligence
where we can throw
lots of CPU power to
understand our world
and make sense.
Source Worcestershire 5G Consortium https://www.gov.uk/government/case-studies/worcestershire-5g-consortium-testbed-and-trials
Source Dr. Kenneth C. Budka, Senior Partner, Bell Labs Consulting.
Source https://uk5g.org/discover/read-articles/5g-ushers-in-a-low-latency-industrial-revolution/
Increasing
manufacturing
output
Smart
factories
Improve output across
million
the UK’s strong workforce.
2.6
Manufacturing firms could see
as much as a 1% increase in
overall productivity increasing
annual profits across the
country by almost £3.5 billion.
Almost half of senior decision
makers indicated that UK companies
need to invest more in R&D to
retain their high position in the
global manufacturing market.
5G across the
manufacturing industry
is part of the drive
for Industry 4.0, also
referred to as the fourth
industrial revolution.
1%
£44.6 billion + 1% increase in output =
£1.78bnover a year.additional
13

Use-cases in
action: the huge
mobility market
The rise of connected and
autonomous vehicles (CAVs),
sending and receiving
data across 5G networks,
will create a whole new
ecosystem of value.
CAVs are expected to
eventually generate some
2 petabytes of data per
year (which equates to over
2,700GB per day), bringing
vast opportunities for those
who can access and leverage
the data effectively to sell
relevant products and services
to users. 4G networks
cannot support this level of
data transmission on a wide
scale, but 5G networks will
likely have sufficient capacity
once properly rolled out.
One of the biggest impacts
IoT will have on our society
and economy is in the field
of mobility.
The progressive development
of CAVs, coupled with the
shift in consumer preference
away from vehicle ownership
to vehicle access, could
see the rise of fleets, that
individuals and businesses
access on a subscription or
pay-as-you-go basis – rather
like having a Netflix account.
Fleets for personal or
commercial use will steadily
converge as fully automated
vehicles mean that moving
people and moving goods
will become more aligned.
Whether operated and owned
by ride-hailing companies,
car manufacturers or on-
demand mobility service
providers, the changes will
be far-reaching. But this
vision is heavily dependent
on the effective rollout of
5G and national security-
level cyber infrastructure.
For the UK economy alone,
we believe there is a £75-
150bn opportunity. This will
include a £20bn+ boost to UK
industry through telecoms
demand, new digital revenue
streams, service industry
revenue, greater efficiency
of city infrastructure and
freed up asset value.
There are significant prizes
to play for, including huge
downstream digital revenue
streams that we estimate
could increase ten-fold
over a 10-year lifetime of
a future vehicle through
content, media and retail that
consumers will purchase on
journeys when they are freed
up from actually driving.
The sheer bandwidth needed
to support the operation of
connected CAVs, both private
and commercial, will be the
essence of the challenge for
telcos - potentially including
vehicle-to-vehicle, vehicle-to-
infrastructure communications
and cyber security. We will
see an intensifying battle
between telcos and media
content providers to deliver
content directly into CAVs and
retain access to the customer.
14

Catalyst of a massive
Internet of Things (IoT)
The capability of 5G to support the transmission of large amounts of high speed data
and a high density of devices or sensors, with different characteristics in a common
communication framework, stimulate the implementation of a massive IoT.
Source: 5G Americas - 5G services and use cases
Utilities Smart
buildings/
venues
Industrial Agriculture
Smart cities Consumers
Environment Logistics
Smart metering
Smart grid management
Smoke detectors
Alarm systems
Home automation
Predictive maintenance
Process monitoring
and control
Maintenance monitoring
Climate/agriculture
monitoring
Livestock tracking
Smart watering
Parking sensors
Smart bicycles
Waste management
Smart lighting
Wearables
Kids/senior tracker
Medical monitoring
Flood monitoring/alerts
Environmental monitoring
(water, air, noise, etc.)
Fleet management
Goods tracking
15

Effective regulation that
supports the rollout of 5G
whilst also underpinning crucial
security aspects will be key.
The stakes
will be high
With so much data flowing
between parties over
5G networks and in IoT
environments, it will be
essential that security and
privacy are not compromised.
Regulation, such as GDPR, has
made data privacy a prominent
issue, whilst well-publicised
allegations against a tech giant
of social media data harvesting
have undermined public trust.
Meanwhile, the security
stakes will be high. The
ramifications of a cyber
breach or ransomware attack
on the IoT network of a
manufacturing facility, power
station or even a military
environment could obviously
be extremely serious.
Security issues are already
looming large in the 5G
narrative due to geo-political
wranglings over Chinese
telecoms giant Huawei. With
the US and other jurisdictions,
such as Canada, Australia and
New Zealand, considering
‘blacklisting’ the company,
and Google pulling its apps
from Huawei phones, there
are significant question
marks over the role that
Huawei will be allowed to
play in 5G internationally.
The fact is that Huawei is a
key supplier. There are only
three credible producers of
the technology needed for 5G
networks – Huawei, Nokia and
Ericsson. Of these, the only
player able to produce them on
an industrial scale is Huawei.
In a study KPMG carried out
for the UK’s Department of
Culture, Media and Sport,
we found that operators
widely believe they will
need access to Huawei
technology to launch 5G in
the timescales envisaged.
Huawei is also one of
the three largest handset
manufacturers globally, along
with Apple and Samsung.
Blockages or a ban on Huawei
network equipment and
devices could significantly
slow the rollout of 5G in
the UK and elsewhere.
It is a political issue that
needs to be resolved.
Meanwhile, telcos will face
greater responsibility than
ever before in the 5G world.
Ensuring that they can meet
regulatory requirements
around security, privacy and
consumer protection will be
a non-negotiable imperative.
Regulation
16

Can we help you land
your 5G strategy?
There is no doubt that 5G is a
game changer. However, operators
will need a clearly defined strategy
to make it a success. It could be a
long journey.
In some ways, 5G has synergies with
another long journey: the Apollo moon
landing that the world has been celebrating
the 50th anniversary of in 2019.
In an era when computers were room-sized,
the Apollo computers were small: one cubic
foot, a single box that a person or a spaceship
could carry, and they were the first computers
to have AI capability. They were programmed
in such a way that they could look at all the
work that needed to be done to fly the lunar
module, at a given millisecond, and do the work
in order of importance. In 1969, computers
that made their own decisions were unique.
This is how KPMG sees the possibilities
for 5G. Like Apollo, it represents a
huge leap forward and will enable
businesses to do extraordinary things.
At KPMG, we have the expertise to help
you land your 5G go-to-market plan, picking
the most mission-critical tasks to do first:
–– Mobility and IoT strategy
–– Use-case and business case development
–– Solution design and integration
–– Organisational redesign and
change management
–– 5G transformation program
management office
–– Test management and quality assurance
–– Analytics and intelligent automation
design and operation
–– Cybersecurity and risk management
1.
2.
3.
What role do you want to play in
the evolving 5G ecosystem?
What is the desired mix of collaboration vs.
ownership that balances speed, agility and control?
How do you leverage your current brand
and relationships to ‘own the customer’?
17

Please get in touch if you
would like to talk to us about
anything related to 5G.
Ian West
Partner, Head of TMT UK
e. onecallalltheanswers@kpmg.co.uk
Contacts
18

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate
and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the particular situation.
© 2019 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Designed by CREATE | CRT108016 | October 2019
https://home.kpmg/uk/onecall

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