Thomas Savery's ambition for his 1698 invention, the steam-powered pump, was modest: "...that water in its fall from any determinate height, has simply a force answerable and equal to the force that raises it.” The first application of steam for mechanical labour did little and was prone to explosions but changed the world. Not as much as Newcomen’s Atmospheric Engine, though, in 1712. Installing a piston, Newcomen improved some of Savery’s flaws. But the engine was still just a pump.
Along came James Watt in 1763, with improvements to Newcomen’s engine, and things took a significant turn. His engine used a separate condenser, was twice as efficient, and produced rotary motion: this opened up the portal to a new chapter in human progress.
Although Watt’s ushered in the industrial revolution by raising the factor of productivity and making large-scale factories a reality, the true economic miracle was unleashed nearly 40 years later, in 1804, when steam engines gave birth to the rail. The networks that railways created shrank the world, revolutionised human movement and supply chains, and most directly led to the Industrial Age that followed.
Parallels to the telecom revolution are hard to miss. From the advent of Savery Pump-like, barely feasible, expensive and clunky EDGE / CDMA technology, to an Atmospheric Engine like 3G that teased the possibilities, to the Watt-Engine-like ubiquity of 4G: we are already amidst the most monumental revolution ever ushered in humanity's history by the access to and flow of information. I’d venture to wager, that the introduction of 5G is like the advent of railways: it will bring access and equity to parts of the world that never had it, and make technologies possible and feasible that was always just beyond the horizon.
5G will be a phenomenal leap in terms of penetration, capacity augmentation, and the technologies it enables. The tech revolution of India today was built on the back of the 4G revolution of the last decade, and if we get the same level of 5G penetration, it will unlock an exponentially larger opportunity set. But that's not it: 4G was always capacity constrained, and thus, so was the stuff that could be built atop it. It's no surprise then, that the stuff we got out of the 4G revolution was mostly consumption-oriented (more data from the servers to you, rather than bi-directional), or geared towards e-commerce. This ushered in the age of online retail, OTT and social media.
Anything that required more was not possible. We know today how to drive cars autonomously; the reason we can't (in many cases), is because of the latency involved in communicating with a remote vehicle, where milliseconds can have life-or-death impacts. Similarly, IoT devices are easy to build, but 4G networks can't support them en-masse, rendering them unfeasible. Machine Learning and AI applications today must rely on hardware-constrained, edge-compute devices as real-time cloud communication is expensive and clunky, if at all possible.
5G has the potential to disrupt each of these challenges. Cloud compute-based technologies, such as IoT devices, machine learning and vision, AI and telepresence are all within grasp. It is also likely that 5G upends traditional broadband networks, which would disrupt bundled OTT and television operators as well. And, if 5G achieves true last-mile penetration in rural India, getting the last non-smartphone users online, would lead to an explosive market expansion for every seller.
Almost all of the tech revolution India has seen this decade was built atop the 4G revolution. 5G will be exponentially more impactful.
Go back to 2010, when the 4G auctions were held, and try and remember the world you were in. Was 20-minute food delivery ordered on your phone, while you watch a Netflix series on a wireless network remotely conceivable? What 4G gave us is the tip of the iceberg. 5G will be the economic engine that fuels much of the innovation, growth and wealth creation for the next two decades. It will transform human lives in ways that are almost impossible to predict today.
In a market where we have become jaded by plunging valuations of flailing unicorns and daily crashes of fly-by-night crypto-utopias, it is easy to write off any kind of hope as hype. Dismissing 5G with that callousness would be a mistake.
So let me be the random stranger at Dustin Hoffman's graduation party in 'The Graduate' and say to you: "One Word: 5G”
(The writer is the Managing Director of Bexley Advisors - a boutique investment bank focused on the tech, media and MSME sectors)