5 Predictions on How 5G will Shape the Automotive Sector

Interconnected digital infrastructures and data transfer between OEMs and mobile providers are key for successful 5G roll-out

Equinix, Inc. (Nasdaq: EQIX), the world’s digital infrastructure company, has published five predictions on how the new connectivity standard 5G is set to shape the automotive sector and its underlying digital infrastructure. The analysis sheds light on how original equipment manufacturers (OEMs) and mobile providers are adapting their digital infrastructure and utilizing partner ecosystems in order to realize the full potential of 5G such as advancements in connected driving and new data-driven services.

Equinix’s expansive global footprint across more than 60 markets—and its position as a leading meeting and aggregation point to a globally-connected automotive ecosystem of OEMs, Tier 1 system manufacturers, Autotech companies, 1800+ network service providers and 2900+ cloud providers—give it a unique and holistic lens to observe critical digital infrastructure trends.

Vladislav Iankov, Sales Director, Equinix Bulgaria

1) To advance 5G, mobile providers and participants of the future mobility ecosystem will transform their digital infrastructure and collaborate within shared ecosystems

5G holds the potential to bring about major advancements, not just for the automotive sector, but future mobility as a whole. However, a high level of interoperability and openness is required to realize this potential. Traditional OEMs, Tier 1 system and part manufacturers, are therefore expected to increasingly move away from a siloed and centralized IT architecture towards a collaborative, dynamic approach based on data sharing and collaborations with industry peers via consortia and novel partnerships.

Equinix predicts that as 5G is being rolled out, participants of the future mobility ecosystem, including mobile providers, will adapt their digital infrastructures, placing a greater emphasis on direct and private interconnection and participation in a digital automotive ecosystem which brings together OEMs, service and technology providers, as well as cloud, network and mobile providers. This projected growth in private connectivity is also supported by the Global Interconnection Index (GXI) Volume 4, a market study recently published by Equinix. It predicts the globally installed private interconnection bandwidth capacity within the telecommunications sector will grow 50% annually between 2019 and 2023 to 5,071 Tbps, contributing 31% of overall interconnection bandwidth.

To foster collaboration between providers, and accelerate the development of complex 5G use cases, Equinix has launched a new 5G and Edge Proof of Concept Center (POCC) at its Infomart Campus in Dallas, Texas. The POCC will provide a 5G and edge “sandbox” environment, enabling Mobile Network Operators, cloud platforms, technology vendors and enterprises, to directly connect with the largest edge data center platform and ecosystems resident at Equinix. This enables participants to test, demonstrate and accelerate complex 5G and edge deployment and interoperability scenarios which can also be applied to the automotive sector.

2) Data management capabilities are moving closer to the edge

5G will lead to a huge increase in data in the automotive sector. For advanced connected cars, the data flow is estimated to reach 1 GB per vehicle per day. This is forecast to further explode by 30 times to 1 TB of data per vehicle, per month, by 2025 as functionality increases.

This creates a need for significantly more bandwidth and faster data processing capabilities close to end users and mobile devices at the digital edge. Furthering this, the new 5G standard has a more limited reach than 4G due to higher radio frequencies requiring operators to deploy more radio equipment, optical capacity and network aggregation points to cover the same geographical area. Equinix therefore expects a significant increase in local edge computing capabilities.

Starting in densely connected urban centers, where digital infrastructures are enabled, the rollout of 5G will lead to an expansion of “Multi-access edge computing” (MEC) capacities which bring the cloud to the digital edge and deliver physical and/or virtual computing resources with ultra-low, single-digit latency. This improves application performance, reliability and overall network efficiency. Large interconnection and colocation data centers play a central role here as they provide network service providers with direct and secure interconnection and aggregation points between 5G network nodes. This allows 5G operators to reduce their use of smaller edge locations, thus minimizing up-front investments.

3) 5G will advance V2X (Vehicle-to-Everything) technologies, enabling connected driving and smart city applications

5G will enable important advances in the area of V2X technology which allows vehicles to communicate with other vehicles, pedestrians, and with the infrastructure managing roads, traffic and IT. This communication will lead to safer, less-congested roadways with an enhanced driver experience.

5G will play a key role for connected vehicles by bringing high-bandwidth connectivity for over-the-air updates, data transmission between vehicles and smart services. By 2025, V2X capabilities for vehicles and infrastructure will gain market momentum, with deployments expected to start as soon as late 2020. With a compound annual growth rate (CAGR) of 28%, the V2X market size is expected to reach a volume of over 30 billion US dollars by 2035.

Equinix expects this development to start in densely interconnected urban centers with sufficient edge computing capabilities in place. In order to realize the benefits of V2X and smart city use cases, an open and neutral infrastructure is required which interconnects participants of the future mobility ecosystem, network and digital service providers, and other components of the city’s infrastructure. This foundation will enable vehicles to share data and effectively analyze the surrounding area and traffic participants.

4) 5G will unlock new data-driven business opportunities for OEMs—especially in the area of entertainment and smart services

While automotive manufacturers have largely focused on engineering improvements in the past, the shift to connected, autonomous, shared and electric (CASE) vehicles—accelerated by the expansion of 5G—is causing automakers to rethink their business models and increasingly prioritize data-driven services. By 2023, McKinsey expects that 46% of automotive revenue growth will come from digital services.

5G is the first generation of mobile/wireless communications built to handle advanced enterprise services. It can support significantly higher data rates, lower latency, more concurrently connected devices, improved mobility, as well as better network energy efficiency. This paves the way for OEMs to invest in cutting-edge digital services including advanced driver assistance systems (ADAS), high-definition (HD) and augmented and/or virtual reality (AR/VR) infotainment, in addition to mobility services such as smart parking and traffic security.

To increase revenue potential and enable new, low-latency services, 5G operators and OEMs will make use of partner ecosystems within data centers. These include ecosystems around digital business, network peering, mobile and emerging IoT, as well as major hyperscale offerings.

5) 5G will advance automotive manufacturing, enabling the large-scale use of complex IIoT applications

Next to driver benefits, 5G is also expected to transform automotive manufacturing. Data collection and analysis through IoT devices—coupled with 5G’s faster transmission speeds—will allow for more visibility throughout the production process. Connected sensors enable manufacturers to derive meaningful insights from real-time interactions among machines, systems, assets and things.

Starting with the deployment of private 5G campus networks, Equinix expects OEMs will increasingly leverage 5G to implement complex IIoT use cases. This includes predictive maintenance, which can significantly reduce operational expenditures and down times. IoT can also be used to monitor automotive supply chains, optimizing the efficient use of equipment. Lastly, 5G is expected to advance the use of robotics in automotive assembly lines by allowing for the optimized monitoring and use of IoT sensor data, resulting in greater precision and reduced costs.

To work together and deliver better insights, these devices will need to be dynamically integrated with networks, clouds and digital ecosystems via fast, secure, low-latency interconnection. OEMs can leverage direct interconnection to connect with emerging IoT ecosystems and leading cloud providers, allowing them to accelerate innovations to advance connected, smart and sustainable mobility.

Quotes

  • Vladislav Iankov, Sales Director, Bulgaria, Equinix:

“It’s important to note that this new generation of networks—5G—is designed primarily for machines to communicate with each other. This means peak speeds of 20 gigabits, and a density that can reach up to 1 million devices communicating within 1 square kilometer. This will generate huge data flows, requiring robust digital infrastructures. We’re seeing lots of activity like this happening in Bulgaria, particularly with the strong connectivity links to countries from Azerbaijan to Albania, and from Moldova to Israel. We believe that with the investments Equinix and others are making in the digitization of the country, people and companies in Bulgaria can make greater use of the opportunities provided by 5G.”

  • Maxime Flament, CTO, 5GAA:

“5G acts as a trigger to bring more connectivity to vehicles around the world. It is not just an infotainment upgrade, but a new shift towards safer, smarter, cleaner and more comfortable mobility. 5GAA strives to bring together companies from the automotive, technology and telecommunications industries to foster collaboration and innovation based on the new connectivity standard.”

 

Additional Resources

Some of the coverage is available below:

Manager.bg: 5 Predictions how 5G will Change the Automotive Industry

Computerworld.bg: 5 Predictions for 5G in the Automotive Sector

TechNews.bg: 5G Connectivity will Change the Automotive Sector