Hi, this is Dana Perkins, and you're listening to Switch on the B and E F Podcast. Today we are going to talk about the role of five G in cars.
You may have seen in the news that five G is rolling out in various locations around the world, and I think a lot of us are thinking about how five G is going to impact our lives in terms of the phones that were physically going to hold in our hands, amazing processing power in the palm of your hand, and I can't help but think about people queuing up outside of Apple waiting to get their next edition of the iPhone. And I'm sure we're going to see some
of that with different five G enabled phones. But today we're really going to talk about cars and the other things that five G can do for us. Five G has the potential to unlock various things within the smart home and smart building space and also within the vehicle and mobility space. I'm joined today by our analyst Andrew Grant, who focuses his time on intelligent mobility, and he looks at everything from mobility as a service all the way through to five G. The really fun, techy stuff that
you're going to interact within a car. That is what Andrew covers. If you're interested in reading more about this, you can look up BNFS research note titled the Role of five G in Cars. This is available on BNF dot com and at b NF go on the terminal. This is available to clients of BNF and if you're not yet a client but want to know more, email us at sales dot BNF at Bloomberg dot net and we will be happy to sort you out. Please note
that BNF does not provide investment or strategy advice. We've got a full disclaimer at the end of the show, but right now let's go ahead and jump in. Andrew, thank you for joining us today. So I want to start with what is five G. Well, then it wouldn't surprise you to learn that five G is the fifth
generation of cellular technology. So the first generation allowed you to do things like walk and talk, the second generation and allows text messaging, the third generation got everybody online, the fourth generation our content streaming, and then the fifth generation is what's coming next. So we just had rollout in the UK recently, Is that correct? Well, we had rollout of a version of five G. It comes in
many different forms. It's not quite as clear and cut and dry as one generation stopping and another generation starting. It's a collection of technologies. Some of those early technologies have been rolled out in the UK over lower frequencies, but a lot more is coming operating at higher frequencies, and the possibilities of that are really interesting. So we've got this note that you've written called the roll of
five G in cars. So this conversation really revolves around cars and what this is going to potentially facilitate for us. But am I correct in assuming that this is all really potential right now and that you have some technologies that can work on four G. Five G might make them better, But what's new? What is five G going to facilitate that four G can't facilitate right now? I mean, that's what we were trying to figure out with this note.
I mean I've mentioned the really cornerstone breakthrough is that the different cellular generations enabled and in a lot of cases autonomous vehicles and connected cars as cited as the real breakthrough five G, and that's gonna be what we remember five G four So we wanted to really dig down and see what specific technologies worth in the vehicle would be enhanced or enabled by five G technology, and you group these into four different areas. Am I correct? Yeah,
that's that's how we like to think about it. So, I mean, the first one is the most straightforward, So that's your standard connected car features at the moment. You can have a four G enabled WiFi hotspot in your vehicle. You can have a range of connected car services, streaming or updated navigation, you can have all kinds of different content streaming in your vehicle. And as connection speeds increase, then the logical assumption is that consumers will be consuming
more of the of those services. So that allows you to have other services built into those vehicles, things like augmented reality, virtual reality services that consumers can can enjoy while they're traveling in the vehicle. Okay, so you're just assuming that you're not driving, because I'm thinking virtual reality is probably not a great thing when you need to be watching the road. I mean, part of this is
to keep the passengers entertained. But if consumers, well, if you end up not driving your vehicle, then yes, you would need a way to be entertained as well. Would five G be required in order for us to have wide scale rollout of autonomous driving. To be quite clear, it's not necessarily required, but it does seem to help
in a number of different ways. So we're looking at these four areas within your note about the role of five gen cars, so enhancing info, attainment services, cooperative intelligent transport systems, tell operation, high definition mapping. So of those, I'm going to ask you you've got to pick a favorite child you wrote this note, So if somebody wanted to read the most interesting section, which of the four
do you think is the most provocative? I mean, I think the one that maybe it gets a bit too far on the weeds for for some people. But the cooperative intelligent transport system is something that's being debated now. A bunch of different markets are having different or taking different policy stances on it, and it's going to have a big effect on not just automas vehicles, but the whole road transport sector. Where are we finding five G
rolling out right now? So I've seen in the news that it's in the UK and that rollout is happening as we speak. What other countries are you finding this in? I mean, in most developed markets there's some form of five G rollouts, either underway or being planned. Specific frequency spectrums are being auctioned to to the telcos across China,
South Korea, Japan, um throughout Europe and Germany. We mentioned the UK, and then in the US and those are and probably I would say SINGAPOREES or so up there. It's one of the the leaders in the space. So if you're an auto manufacturer, where is the opportunity for you?
Because I see the obvious opportunity for the telcos, But I'm seeing an auto manufacturer that's now got a battery that they've may be purchased from another company and now the internal computer system that is being facilitated by these mobile phones. Is there a real opportunity for them or they sort of just the physical couch and shell that's moving all of this exciting technology forward. Yeah, I mean talking about like connected cause in general now and I
mean five G is part of that. But the real opportunity for automaker is is the data that they are collecting on the vehicle and how consumers are using those vehicles. They're getting a far better understanding of how those vehicles operate than they ever have before. There's more and more senses that are being packed into those vehicles that allows them to do things that they really didn't realize were
possible a few years ago. So every uh, well just about every new car has a temperature gauge in it, and that gives you a really detailed weather mapp Once a big fleet of vehicles is distributed around the city, so that information that can inform their future decisions, whether that's what kind of mobility services they want to offer next, whether it's how to configure their vehicles so that they are more suitable for ride hailing and car sharing, or
whether it's data that they can start sharing with third parties and start making turning that into a genuine revenue stream. So there are opportunities for automakers, but in terms of the the cellular contract and being able to actually charge consumers a price for what they consume content wise in the vehicle, they might not be as well positioned as
some of the stakeholds in the space. So Andrew, every year we do an event in San Francisco that's really about mobility and technology coming together also with the energy industry and batteries and storage. Right, was five G rollout a big topic of conversation this year or were there other things that were more interesting to that audience. And and do you think five G rollout will be an interesting topic next year? I mean we've we had a panel on it. We got some telco experts to come
along and we had a lovely conversation on stage. It might have been overshadowed by some other panels that we ran that were kind of more high level. Five G is still even though the rollout is just starting, the impact is only really going to be significant sort of twenty bete. So it's something we'll keep talking about. But yeah,
well we'll we'll definitely keep talking about it. I appreciate the fact that you're saying that this rollout is going to take till because you know, as we've moved from three G to four G and now five G, I think that we as consumers may take for granted that this stuff is going to roll out super fast, but really, just given the physical size of the infrastructure that has to be laid in order to make this work, it's
going to take some time. Do you see that as the largest barrier to roll out or is it lagging technology in other ways that maybe I'm not aware of it all. I wouldn't say, it's the technology that's holding
five G up at all. If anything, it might be a policy problem in terms of how you roll out these small cell substations where instead of having as with previous technologies uh standards, um, you'd be able to put a base station that could cover a wide area with five G. The idea is to put a lot of little small cells in place that kind of cover hundred three much smaller range and and sort of dot those
throughout the city. So that kind of rollout. It's a very different infrastructure player from what what we used to from the set of the space, so that might take a little bit more time about how you go about rolling that out. You need to auction the spectrum. So there's all these different policy challenges that are that are
holding things up the technology. I mean, I've I've spoken to a lot of experts in the space who are have got their hands and developing the technology, and they sort of are not concerned about having it ready on time. It's it's more about how to go about deploying it and who are the company's deploying it. Because I've seen
Huawei mentioned a lot in the news. Yes, so that's certainly somebody you should be aware of another one's qualcom mean Ericson and Nokia are the companies that are are heavily involved in developing the technology for the base stations. UM but I mean the space, just like a lot of industries, is heavily interconnected. So the effect of bands on Hawaewi and UM the Chinese tech companies do have an effect on on the rollout, but we don't see it having like a major stopping effect. It's it's still
going to go ahead. There are enough companies working on this space with enough capability that five G rollouts will be proceeding occasionally with minor blips like the one induced by Hallaway's recent troubles. Andrew, thank you so much for joining us today. Thank you Danna, and we will hopefully have you on again on Switched on b n e F is a service provided by Bloomberg Finance LP and
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