Riding the next wave of mobility: How 5G will transform Asia-Pacific in 2020

Driving digital success with three key ingredients

Anthony Ho

With the arrival of 2020, we have reached the long-promised “Year of 5G” and ultrafast connections that will speed up innovations, not only in the technology sector, but across other verticals as well.  January is a critical time for setting business goals and analyzing key trends that could drive significant regional growth in the coming year. So, with that in mind, let’s take a closer look at what to expect from 5G in Asia-Pacific in 2020.

Changing the face of telecommunications

There is no denying that ultrafast 5G is set to transform telecoms as we know it. Momentum is building behind the global advent of this technology, heralded by the introduction of several 5G-powered innovations, some of which were recently showcased at CES 2020.

To ride the 5G wave, network providers are investing in infrastructure to ensure they can achieve the reach, scale and agility they need to gain the edge. This is illustrated in the findings of the latest Global Interconnection Index (GXI), which indicates that interconnecting with network providers is a dominating use case for interconnection bandwidth, making up more half of all interconnection bandwidth (66%) globally in 2022.

5G infrastructure and endpoint devices are already in place across lots of markets in the Asia-Pacific region. With anticipation mounting for this long-awaited technology and the innovations that are sure to follow its rollout, businesses and consumers alike are keeping close tabs on the official launch of 5G.

Currently leading the game in Asia-Pacific are South Korea and China, where 5G rolled out last year, but other markets are closing the gap. In Australia, Vodafone Hutchison recently announced that Nokia will supply its 5G equipment, while in Hong Kong the last three 5G spectrum auctions were resulted in a combined cost of HKD665.1 million ($85 million) for 100MHz of 3.3GHz airwaves. Singapore’s telecoms regulator the Infocomm Media Development Authority (IMDA) has said that the rollout of new 5G networks can begin this year, but nationwide coverage may take much longer and be initially limited to only two networks.

Connecting vehicles to drive smart and live sustainably

5G promises faster speeds and a reduction in lag time, which can eventually be catalysts for futuristic applications like connected vehicles. The introduction of 5G is expected to support connected vehicles that communicate with other systems to offer enhanced or automated driving experiences. According to an FTI Consulting whitepaper sponsored by Equinix, it is expected that by 2020, 98% of all new cars sold will be connected driven by ubiquitous mobile networks plus government-required connectivity.1 In Asia-Pacific we are already seeing some of this in action.

Australia’s first on-road trial for a connected vehicle, which involves safety features like such as ‘Red-light Violator Warnings’ and ‘Pedestrian Alert Right-Turn Assist’, has been green lit. Meanwhile in Tokyo, as many as 100 self-driving cars will ferry passengers around competition venues to promote driverless vehicle technology in the lead-up to the Summer Olympics.

In 2020, the high-bandwidth connectivity and extraordinary speed of 5G will help support connected vehicles and deliver smart transportation systems, services, and experiences that are built on the real-time exchange of information between dispersed sensors, devices, and machines.

The deployment of 5G networks will also enable cities to get one step closer to realizing their vision of becoming a smart city. While smart city initiatives are flourishing in markets like Hong Kong and Singapore, a city cannot be truly ‘smart’ without smart transportation, which is why connected vehicle technology adoption has accelerated across the region in recent years.

Fintech: the era of digital transactions

The launch of 5G combined with the rapid growth of mobile, the implementation of smart city initiatives and the rise of e-commerce are all fueling a rise in fintech innovations. With ultralow latencies and ultrafast speeds, 5G will shake up the financial market by shortening settlement cycles and bringing a lightning-fast real-time user experience to mobile devices.

In the Chinese city of Guangzhou, for example, tourists from Hong Kong will soon be able to make mobile payments on public transportation using Alipay, a mobile wallet launched by Ant Financial Services Group. In Japan, LINE Pay is integrating WeChat Pay into its systems, enabling it to be accepted by participating retailers across the country. Likewise, in South Korea, Naver is partnering with LINE Pay and Payco in Japan, Thailand, and Taiwan to enable cross-border mobile payments for nearly 80 million combined users.

With start-ups and established firms transforming the market with new innovations, competition is heating up in the banking sector. To enhance user experience and customer engagement, financial firms are drawing on next-level innovations like data analytics, machine learning, artificial intelligence, and robotic process automation to evolve and stay competitive.

Virtual banking will be another key development milestone in 2020, with Hong Kong’s first virtual bank, ZA Bank, having opened its metaphorical doors in late 2019. This is expected to be followed by seven other digital banks in the first half of 2020. Meanwhile, in Singapore, five virtual banking licenses are expected to be granted in mid-2020 by the Monetary Authority of Singapore.

Three ingredients of digital success

Central to the rollout of 5G technology, will be the vast and innovative networks on which it will be distributed. In today’s globalized world, data is being exchanged between businesses, service providers, and users across the globe, but distance remains the greatest hindrance to peak performance for modern business applications. Using the public internet also means sharing network bandwidth with numerous anonymous users, resulting in latency and security issues. To embrace 5G in 2020, digital businesses must rely on three key ingredients:

Interconnection

Interconnection refers to direct and private traffic exchange between people, things, locations, clouds, and data, ensuring security, high-performance, and low latency. According to the latest Global Interconnection Index (GXI), interconnection bandwidth is expected to grow at 56% CAGR and exceed 3,825 Tbps by 2022 in Asia-Pacific, contributing 29% of global capacity. This points to a growing demand for interconnection in the region to support digital businesses. Leveraging the geographic reach of Equinix Interconnection services will play a valuable role in helping companies accelerate their digital transformation initiatives thanks to the ability to instantly deploy flexible, interconnection-oriented network architectures worldwide.

Digital edge 

To remove the distance between services and users, IT leaders must deploy interconnection at the digital edge and bring applications closer to data processing and users. Companies can leverage Platform Equinix®, the world’s largest global interconnected platform, to securely deploy, directly connect, and effectively scale their digital infrastructurewhere everything is within reach. With Platform Equinix, customers are able to quickly, seamlessly and securely connect endpoints within Equinix International Business Exchange™ data centers across the globe. Designed to accelerate digital transformation for global businesses, Equinix offers enterprises a new way to deploy network services closer to the edge, without a physical data center deployment or hardware requirements. Equinix’s broad portfolio of physical and virtual interconnection services also enables enterprises to reduce capital expenses and scale IT and network services globally by virtually deploying a digital-ready infrastructure.

Robust ecosystem

Partners and service providers play an instrumental role in supporting the operation and growth of a company. At Equinix, customers can enjoy secure, direct access to a robust, interconnected ecosystem of 1,800 network providers and over 2,900 cloud and IT service providers globally, as well as a variety of solutions such as Equinix Cloud Exchange FabricTM to help enterprises across different industries enhance performance, lower latency, and increase reliability. In addition, Equinix’s new product innovation is designed to enable customers to modernize their networks virtually, within minutes, by deploying Network Functions Virtualization (NFV). This means customers can choose from a broad suite of vendor-neutral, virtual network services to connect their digital supply chains at Equinix.

On the cusp of transformation

With 5G poised to transform Asia-Pacific in 2020, we cannot wait to see some of the innovation and disruption across the region in coming 12 months.

Are you looking to revolutionize your business and embark on your digital transformation journey in the new year? Download our latest Global Interconnection Index (GXI) here to learn why interconnection matters and how Equinix can help you.

 

1 – https://www.equinix.hk/digital-edge/whitepapers/connected-cars-smart-mobility-infrastructure-trends-FTI/

Anthony Ho
Anthony Ho Director of Regional Product Management at Equinix in Hong Kong.