The economic potential of 5G internet and Nepal

5G Internet
Photo: bestinfopoint

It is safe to say, 5G internet will take over the world. To ensure Nepal does not miss out, Nepal Telecom is also planning to trial 5G internet in the current fiscal year.

But what exactly is 5G internet? How it is different from 3G or 4G internet? What impact it will have on industries, the business ecosystem and the economy around the globe and how Nepal and its budding entrepreneurs and citizens can reap the benefit of it?  These are some fundamental questions we are going to discuss in this article.

5G, or the fifth generation of wireless technology, represents a monumental leap in internet connectivity. It is the latest iteration in the evolution of wireless networks, succeeding 4G (LTE) technology. What sets 5G apart is its ability to deliver faster speeds, lower latency, increased capacity, and improved reliability. This breakthrough technology has the potential to revolutionise not only how we connect to the internet but also how industries, businesses, and economies function on a global scale.

Comparing 5G internet to 4G and 3G

Photo: Nato

While 3G and 4G brought significant advancements over their predecessors, 5G internet takes this progress to a whole new level:

Speed: 5G internet promises speeds which can be 100 times faster than its predecessor 4G, reaching download speeds up to 10 Gbps. This means downloading large files, streaming high-definition content, and using data-intensive applications will become almost instantaneous.

Latency: Latency is going to be reduced significantly in 5G internet from 50 ms in 4G to only 4 ms. Latency is the time taken by information to travel from an internet browser to a network server and vice versa. Lower latency means faster response time which can be really crucial for real-time applications like remote surgery, autonomous vehicles, and augmented reality.

Coverage: 5G internet can handle more than a million devices at a time which is 250 times higher than what 4G internet is capable of. This paves the way for the Internet of Things (IoT) to flourish, enabling a vast array of connected devices and sensors. Along with that, it can be seamlessly used in crowded places, parks, events, etc.

Reliability: 5G networks are designed to be more resilient and dependable, ensuring a consistent and stable connection even in densely populated areas or during peak usage times.

Impact on Industries, Business Ecosystem, and Economy

So, 5G is not just an upgrade from its predecessors; it is a quantum leap in connectivity. With speeds up to 100 times faster than 4G, and incredibly low latency, 5G sets the stage for a new era of innovation. With the ability to transmit vast amounts of data in real time, industries will become more efficient, more productive, and more adaptable. And as the world becomes increasingly interconnected, economies are set to experience a profound shift.

Global Impact:

The introduction of 5G internet is set to trigger numerous transformations across industries and economies worldwide. According to a World Economic Forum report, 5G internet will create a total global value creation of USD 13.2 Trillion by 2035. A fascinating fact is it is approximately the 2020 GDP of the second-largest economy in the world China. Further, it is expected that it will give direct or indirect employment to 22.3 million people throughout the world.

1. Internet of Things

The Internet of Things (IoT) refers to a vast network of physical objects or “things” that are connected to the internet and have the ability to collect, transmit, and exchange data with other devices and systems. The key concept of IoT is to enable these objects to communicate and interact with each other, often without requiring direct human intervention. But the problem is all these devices need lots of data and very fast internet connectivity.

5G’s low latency, high speed and better coverage will enable the growth and massive public adoption of smart IoT devices such as smart homes, driverless cars, smart wearables, IoT medical devices for quick medical service in case of emergency, smart robots, etc. which will drive comfortability, efficiency, safety and reduce the costs.

The use of these devices will not be less than a science fiction movie for now but with the growth of 5G and IoT devices, this will be the reality in the near future.

It is safe to say this is going to be one of the next economic miracles but the question is how exactly we and our country can take benefit out of it? By becoming consumers or by becoming producers?

Even from a global perspective, the IoT industry is in its starting phase. There are significantly fewer players and market forces in the industry. Further, the market size is small but it is expected to grow massively.

If budding Nepali entrepreneurs start early, dedicating their efforts to research and develop products within this industry, the potential rewards upon its successful growth could be substantial.

Photo: Medium

2. Business Process Outsourcing/Freelancing Industry

According to an Institute for Integrated Development Studies (IIDS)report, Nepal’s IT sector earned around Rs 68 billion in foreign currency in 2022. This is 1.4 per cent of the country’s GDP. The report further says that Nepal has more than 106 IT companies and more than 66,000 freelancers.

Consider this: with only 106 IT export companies and 66,000 freelancers, Nepal has managed to generate a significant influx of revenue. This is in a country where policies are not particularly favourable towards IT and business, and where the necessary IT infrastructure is still in the process of being developed. This underscores the immense potential that Nepali youth and the IT sector hold for driving the economic development of Nepal.

5G Internet holds immense potential in transforming various aspects of the economy. Its high-speed connectivity can catalyse business process outsourcing, freelancing, and remote work culture, enabling seamless video conferencing, and unlocking possibilities in AR and VR technologies. Furthermore, the advent of 5G is anticipated to expand the horizons and market reach of the IT sector, potentially offering us greater access to the global market.

3. Gaming and Entertainment Industry

Have you experienced playing online games like PUBG, Free Fire, Clash of Clans, etc.? Now, imagine enjoying them without any lag, with graphics so immersive that it feels like reality. Plus, you would not even need to download these games, saving a significant amount of space on your mobile and PC. That would truly be an amazing experience, do you not you think?

“5G internet, with its rapid connectivity and cloud-based services, will enable these possibilities. Moreover, immersive experiences, including augmented and virtual reality, are set to revolutionise gaming, movies, entertainment, digital tourism, as well as content creation and consumption.

4. Education Industry

With the advent of 5G technology, the synergy between 5G internet and Education Technology (EdTech) is poised to revolutionise how education is delivered, accessed, and experienced. This fusion has the potential to reshape the landscape of education, making it more immersive, personalised, and accessible to learners of all ages.

In Nepal, where access to quality education is a challenge in certain regions, the combination of 5G internet and EdTech holds tremendous potential. It can bridge the educational divide, offer personalised learning experiences, and equip learners with the skills needed for the 21st-century job market.

5. Agriculture Industry

In Nepal, where agriculture has been the backbone of the economy and a way of life for generations, a new wave of transformation is on the horizon. The convergence of cutting-edge technology, represented by 5G, and the age-old practice of farming is opening doors to a future of sustainable, efficient, and smart agriculture.

Imagine a farmer in a remote village equipped with a smartphone, accessing real-time data about soil moisture, temperature, and crop health. With 5G internet’s high-speed and low-latency capabilities, this information can be instantly transmitted from field sensors to the farmer’s device.

Precision agriculture becomes a reality, as farmers make informed decisions about irrigation, fertilisation, and pest control this can help in optimising resources, increasing productivity and reducing the cost.

6. Financial Service Industry

The integration of 5G technology is poised to revolutionise the financial services industry, ushering in a new era of enhanced customer experiences, optimised operations, and unprecedented innovation. 5G’s ultra-low latency ensures that financial transactions, whether on stock exchanges or digital payment platforms, occur at lightning speed. This can reduce the risk of market volatility and create a more secure environment for high-frequency trading.

In banking, for instance, virtual branches and augmented reality interfaces can provide personalised financial service and product recommendations.

AI-powered chatbots and virtual assistants. Financial institutions can offer instant customer support, answer queries, and assist with transactions, enhancing customer satisfaction and reducing wait times.

Nepal in 5G race

Photo: SD Times

5G offers so many new economic possibilities but where exactly Nepal is in the 5G race?

Nepal had previously planned to launch 5G internet in July 2021. If it had been successful Nepal would be the first country in South Asia to roll out 5G infrastructure. However, due to the Covid lockdown and various other reasons, the plan was delayed. If we look at our neighbouring countries, India, Bangladesh, and Sri Lanka have already rolled out 5G, placing Nepal significantly behind in this technological race.

Positive steps, however, have been taken as Nepal has recently started the trial for 5G internet. NTC’s 5G project has been backed by Huawei, the world’s leading 5G internet and telecom service provider. Many of us do not know but Huawei has been a key architect in the development of Nepal’s telecommunication sector for the last two decades.

The start of the 5G trial and its effective mass implementation can bring a new era of 5G and can be a stepping stone for Nepal to be part of massive global economic growth and possibility. If we stay behind the 5G internet race then we might also lose the possible opportunity to our hungry and powerful neighbors. So, it is necessary to make sure we catch up with upcoming technology and leverage our resources capital, human and technology to reap the maximum benefits.

When we examine the economy and history of any successful nation, a common thread emerges: they are already investing in products and industries that will remain relevant for the next 10 to 20 years.

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Bishwokarma is a Chartered Accountant and the host of Finance Factory.

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