1
00:00:00,200 --> 00:00:05,680
Speaker 1: Hi, this is Dana Perkins, and you're listening to Switch

2
00:00:05,840 --> 00:00:08,799
Speaker 1: on the B and E F Podcast. Today we are

3
00:00:08,840 --> 00:00:11,920
Speaker 1: going to talk about the role of five G in cars.

4
00:00:12,400 --> 00:00:14,079
Speaker 1: You may have seen in the news that five G

5
00:00:14,280 --> 00:00:17,040
Speaker 1: is rolling out in various locations around the world, and

6
00:00:17,040 --> 00:00:18,960
Speaker 1: I think a lot of us are thinking about how

7
00:00:19,000 --> 00:00:21,200
Speaker 1: five G is going to impact our lives in terms

8
00:00:21,239 --> 00:00:23,439
Speaker 1: of the phones that were physically going to hold in

9
00:00:23,480 --> 00:00:27,560
Speaker 1: our hands, amazing processing power in the palm of your hand,

10
00:00:27,880 --> 00:00:30,639
Speaker 1: and I can't help but think about people queuing up

11
00:00:30,920 --> 00:00:33,960
Speaker 1: outside of Apple waiting to get their next edition of

12
00:00:34,000 --> 00:00:36,199
Speaker 1: the iPhone. And I'm sure we're going to see some

13
00:00:36,240 --> 00:00:39,240
Speaker 1: of that with different five G enabled phones. But today

14
00:00:39,320 --> 00:00:42,280
Speaker 1: we're really going to talk about cars and the other

15
00:00:42,400 --> 00:00:45,240
Speaker 1: things that five G can do for us. Five G

16
00:00:45,479 --> 00:00:49,240
Speaker 1: has the potential to unlock various things within the smart

17
00:00:49,280 --> 00:00:52,600
Speaker 1: home and smart building space and also within the vehicle

18
00:00:52,640 --> 00:00:56,880
Speaker 1: and mobility space. I'm joined today by our analyst Andrew Grant,

19
00:00:57,000 --> 00:01:00,960
Speaker 1: who focuses his time on intelligent mobility, and he looks

20
00:01:01,000 --> 00:01:03,840
Speaker 1: at everything from mobility as a service all the way

21
00:01:03,840 --> 00:01:06,840
Speaker 1: through to five G. The really fun, techy stuff that

22
00:01:06,880 --> 00:01:09,360
Speaker 1: you're going to interact within a car. That is what

23
00:01:09,440 --> 00:01:12,960
Speaker 1: Andrew covers. If you're interested in reading more about this,

24
00:01:13,120 --> 00:01:16,520
Speaker 1: you can look up BNFS research note titled the Role

25
00:01:16,560 --> 00:01:19,960
Speaker 1: of five G in Cars. This is available on BNF

26
00:01:20,000 --> 00:01:22,880
Speaker 1: dot com and at b NF go on the terminal.

27
00:01:23,480 --> 00:01:26,399
Speaker 1: This is available to clients of BNF and if you're

28
00:01:26,480 --> 00:01:29,000
Speaker 1: not yet a client but want to know more, email

29
00:01:29,120 --> 00:01:32,440
Speaker 1: us at sales dot BNF at Bloomberg dot net and

30
00:01:32,480 --> 00:01:34,920
Speaker 1: we will be happy to sort you out. Please note

31
00:01:34,959 --> 00:01:37,920
Speaker 1: that BNF does not provide investment or strategy advice. We've

32
00:01:37,959 --> 00:01:39,640
Speaker 1: got a full disclaimer at the end of the show,

33
00:01:39,720 --> 00:01:42,680
Speaker 1: but right now let's go ahead and jump in. Andrew,

34
00:01:42,760 --> 00:01:45,640
Speaker 1: thank you for joining us today. So I want to

35
00:01:45,680 --> 00:01:49,760
Speaker 1: start with what is five G. Well, then it wouldn't

36
00:01:49,840 --> 00:01:52,360
Speaker 1: surprise you to learn that five G is the fifth

37
00:01:52,440 --> 00:01:56,920
Speaker 1: generation of cellular technology. So the first generation allowed you

38
00:01:57,000 --> 00:01:59,960
Speaker 1: to do things like walk and talk, the second generation

39
00:02:00,040 --> 00:02:04,320
Speaker 1: and allows text messaging, the third generation got everybody online,

40
00:02:04,800 --> 00:02:08,480
Speaker 1: the fourth generation our content streaming, and then the fifth

41
00:02:08,520 --> 00:02:12,320
Speaker 1: generation is what's coming next. So we just had rollout

42
00:02:12,360 --> 00:02:15,560
Speaker 1: in the UK recently, Is that correct? Well, we had

43
00:02:15,680 --> 00:02:19,200
Speaker 1: rollout of a version of five G. It comes in

44
00:02:19,240 --> 00:02:22,280
Speaker 1: many different forms. It's not quite as clear and cut

45
00:02:22,280 --> 00:02:26,160
Speaker 1: and dry as one generation stopping and another generation starting.

46
00:02:26,200 --> 00:02:30,519
Speaker 1: It's a collection of technologies. Some of those early technologies

47
00:02:30,600 --> 00:02:33,520
Speaker 1: have been rolled out in the UK over lower frequencies,

48
00:02:33,919 --> 00:02:37,799
Speaker 1: but a lot more is coming operating at higher frequencies,

49
00:02:37,840 --> 00:02:40,959
Speaker 1: and the possibilities of that are really interesting. So we've

50
00:02:40,960 --> 00:02:43,880
Speaker 1: got this note that you've written called the roll of

51
00:02:43,919 --> 00:02:47,400
Speaker 1: five G in cars. So this conversation really revolves around

52
00:02:47,560 --> 00:02:51,440
Speaker 1: cars and what this is going to potentially facilitate for us.

53
00:02:51,840 --> 00:02:54,079
Speaker 1: But am I correct in assuming that this is all

54
00:02:54,320 --> 00:02:58,720
Speaker 1: really potential right now and that you have some technologies

55
00:02:58,720 --> 00:03:00,919
Speaker 1: that can work on four G. Five G might make

56
00:03:00,919 --> 00:03:03,200
Speaker 1: them better, But what's new? What is five G going

57
00:03:03,200 --> 00:03:07,079
Speaker 1: to facilitate that four G can't facilitate right now? I mean,

58
00:03:07,120 --> 00:03:08,920
Speaker 1: that's what we were trying to figure out with this note.

59
00:03:09,280 --> 00:03:13,320
Speaker 1: I mean I've mentioned the really cornerstone breakthrough is that

60
00:03:13,360 --> 00:03:17,800
Speaker 1: the different cellular generations enabled and in a lot of

61
00:03:17,840 --> 00:03:21,679
Speaker 1: cases autonomous vehicles and connected cars as cited as the

62
00:03:22,320 --> 00:03:25,480
Speaker 1: real breakthrough five G, and that's gonna be what we

63
00:03:25,520 --> 00:03:28,760
Speaker 1: remember five G four So we wanted to really dig

64
00:03:28,800 --> 00:03:32,600
Speaker 1: down and see what specific technologies worth in the vehicle

65
00:03:32,960 --> 00:03:36,960
Speaker 1: would be enhanced or enabled by five G technology, and

66
00:03:37,000 --> 00:03:41,120
Speaker 1: you group these into four different areas. Am I correct? Yeah,

67
00:03:41,160 --> 00:03:42,960
Speaker 1: that's that's how we like to think about it. So,

68
00:03:43,000 --> 00:03:46,280
Speaker 1: I mean, the first one is the most straightforward, So

69
00:03:46,720 --> 00:03:49,600
Speaker 1: that's your standard connected car features at the moment. You

70
00:03:49,640 --> 00:03:53,000
Speaker 1: can have a four G enabled WiFi hotspot in your vehicle.

71
00:03:53,080 --> 00:03:56,720
Speaker 1: You can have a range of connected car services, streaming

72
00:03:57,160 --> 00:04:00,800
Speaker 1: or updated navigation, you can have all kinds of different

73
00:04:00,840 --> 00:04:04,920
Speaker 1: content streaming in your vehicle. And as connection speeds increase,

74
00:04:05,040 --> 00:04:08,720
Speaker 1: then the logical assumption is that consumers will be consuming

75
00:04:08,760 --> 00:04:12,360
Speaker 1: more of the of those services. So that allows you

76
00:04:12,400 --> 00:04:15,040
Speaker 1: to have other services built into those vehicles, things like

77
00:04:15,200 --> 00:04:19,919
Speaker 1: augmented reality, virtual reality services that consumers can can enjoy

78
00:04:20,040 --> 00:04:23,520
Speaker 1: while they're traveling in the vehicle. Okay, so you're just

79
00:04:23,560 --> 00:04:26,640
Speaker 1: assuming that you're not driving, because I'm thinking virtual reality

80
00:04:26,720 --> 00:04:28,280
Speaker 1: is probably not a great thing when you need to

81
00:04:28,320 --> 00:04:30,240
Speaker 1: be watching the road. I mean, part of this is

82
00:04:30,279 --> 00:04:34,320
Speaker 1: to keep the passengers entertained. But if consumers, well, if

83
00:04:34,560 --> 00:04:37,520
Speaker 1: you end up not driving your vehicle, then yes, you

84
00:04:37,560 --> 00:04:40,119
Speaker 1: would need a way to be entertained as well. Would

85
00:04:40,160 --> 00:04:43,680
Speaker 1: five G be required in order for us to have

86
00:04:43,800 --> 00:04:47,800
Speaker 1: wide scale rollout of autonomous driving. To be quite clear,

87
00:04:48,040 --> 00:04:52,120
Speaker 1: it's not necessarily required, but it does seem to help

88
00:04:52,160 --> 00:04:54,240
Speaker 1: in a number of different ways. So we're looking at

89
00:04:54,279 --> 00:04:56,840
Speaker 1: these four areas within your note about the role of

90
00:04:56,880 --> 00:05:01,040
Speaker 1: five gen cars, so enhancing info, attainment services, cooperative intelligent

91
00:05:01,080 --> 00:05:06,719
Speaker 1: transport systems, tell operation, high definition mapping. So of those,

92
00:05:07,200 --> 00:05:08,560
Speaker 1: I'm going to ask you you've got to pick a

93
00:05:08,560 --> 00:05:12,320
Speaker 1: favorite child you wrote this note, So if somebody wanted

94
00:05:12,360 --> 00:05:15,160
Speaker 1: to read the most interesting section, which of the four

95
00:05:15,320 --> 00:05:17,680
Speaker 1: do you think is the most provocative? I mean, I

96
00:05:17,720 --> 00:05:21,120
Speaker 1: think the one that maybe it gets a bit too

97
00:05:21,160 --> 00:05:23,360
Speaker 1: far on the weeds for for some people. But the

98
00:05:23,880 --> 00:05:27,640
Speaker 1: cooperative intelligent transport system is something that's being debated now.

99
00:05:28,080 --> 00:05:30,880
Speaker 1: A bunch of different markets are having different or taking

100
00:05:30,880 --> 00:05:33,359
Speaker 1: different policy stances on it, and it's going to have

101
00:05:33,400 --> 00:05:36,479
Speaker 1: a big effect on not just automas vehicles, but the

102
00:05:36,520 --> 00:05:40,920
Speaker 1: whole road transport sector. Where are we finding five G

103
00:05:41,120 --> 00:05:44,040
Speaker 1: rolling out right now? So I've seen in the news

104
00:05:44,279 --> 00:05:46,960
Speaker 1: that it's in the UK and that rollout is happening

105
00:05:47,000 --> 00:05:49,599
Speaker 1: as we speak. What other countries are you finding this in?

106
00:05:50,160 --> 00:05:54,200
Speaker 1: I mean, in most developed markets there's some form of

107
00:05:54,279 --> 00:06:01,359
Speaker 1: five G rollouts, either underway or being planned. Specific frequency

108
00:06:01,400 --> 00:06:08,360
Speaker 1: spectrums are being auctioned to to the telcos across China,

109
00:06:08,800 --> 00:06:14,359
Speaker 1: South Korea, Japan, um throughout Europe and Germany. We mentioned

110
00:06:14,400 --> 00:06:16,160
Speaker 1: the UK, and then in the US and those are

111
00:06:16,200 --> 00:06:19,120
Speaker 1: and probably I would say SINGAPOREES or so up there.

112
00:06:19,120 --> 00:06:22,719
Speaker 1: It's one of the the leaders in the space. So

113
00:06:22,760 --> 00:06:26,160
Speaker 1: if you're an auto manufacturer, where is the opportunity for you?

114
00:06:26,240 --> 00:06:29,760
Speaker 1: Because I see the obvious opportunity for the telcos, But

115
00:06:29,800 --> 00:06:32,919
Speaker 1: I'm seeing an auto manufacturer that's now got a battery

116
00:06:32,960 --> 00:06:35,960
Speaker 1: that they've may be purchased from another company and now

117
00:06:36,160 --> 00:06:39,920
Speaker 1: the internal computer system that is being facilitated by these

118
00:06:39,960 --> 00:06:43,600
Speaker 1: mobile phones. Is there a real opportunity for them or

119
00:06:43,720 --> 00:06:46,400
Speaker 1: they sort of just the physical couch and shell that's

120
00:06:46,440 --> 00:06:50,240
Speaker 1: moving all of this exciting technology forward. Yeah, I mean

121
00:06:50,320 --> 00:06:52,800
Speaker 1: talking about like connected cause in general now and I

122
00:06:52,800 --> 00:06:55,880
Speaker 1: mean five G is part of that. But the real

123
00:06:55,880 --> 00:06:58,800
Speaker 1: opportunity for automaker is is the data that they are

124
00:06:58,839 --> 00:07:02,200
Speaker 1: collecting on the vehicle and how consumers are using those vehicles.

125
00:07:02,400 --> 00:07:05,080
Speaker 1: They're getting a far better understanding of how those vehicles

126
00:07:05,120 --> 00:07:07,920
Speaker 1: operate than they ever have before. There's more and more

127
00:07:08,000 --> 00:07:11,040
Speaker 1: senses that are being packed into those vehicles that allows

128
00:07:11,080 --> 00:07:15,680
Speaker 1: them to do things that they really didn't realize were

129
00:07:15,680 --> 00:07:19,640
Speaker 1: possible a few years ago. So every uh, well just

130
00:07:19,720 --> 00:07:22,800
Speaker 1: about every new car has a temperature gauge in it,

131
00:07:22,920 --> 00:07:25,760
Speaker 1: and that gives you a really detailed weather mapp Once

132
00:07:25,840 --> 00:07:29,480
Speaker 1: a big fleet of vehicles is distributed around the city,

133
00:07:29,560 --> 00:07:33,880
Speaker 1: so that information that can inform their future decisions, whether

134
00:07:33,920 --> 00:07:37,560
Speaker 1: that's what kind of mobility services they want to offer next,

135
00:07:38,960 --> 00:07:43,280
Speaker 1: whether it's how to configure their vehicles so that they

136
00:07:43,360 --> 00:07:47,160
Speaker 1: are more suitable for ride hailing and car sharing, or

137
00:07:47,160 --> 00:07:50,360
Speaker 1: whether it's data that they can start sharing with third

138
00:07:50,400 --> 00:07:55,200
Speaker 1: parties and start making turning that into a genuine revenue stream.

139
00:07:55,240 --> 00:07:59,120
Speaker 1: So there are opportunities for automakers, but in terms of

140
00:07:59,160 --> 00:08:04,000
Speaker 1: the the cellular contract and being able to actually charge

141
00:08:04,040 --> 00:08:08,280
Speaker 1: consumers a price for what they consume content wise in

142
00:08:08,280 --> 00:08:11,240
Speaker 1: the vehicle, they might not be as well positioned as

143
00:08:11,280 --> 00:08:14,600
Speaker 1: some of the stakeholds in the space. So Andrew, every

144
00:08:14,680 --> 00:08:17,679
Speaker 1: year we do an event in San Francisco that's really

145
00:08:17,720 --> 00:08:23,200
Speaker 1: about mobility and technology coming together also with the energy

146
00:08:23,240 --> 00:08:27,320
Speaker 1: industry and batteries and storage. Right, was five G rollout

147
00:08:27,360 --> 00:08:30,040
Speaker 1: a big topic of conversation this year or were there

148
00:08:30,080 --> 00:08:33,439
Speaker 1: other things that were more interesting to that audience. And

149
00:08:33,440 --> 00:08:35,400
Speaker 1: and do you think five G rollout will be an

150
00:08:35,400 --> 00:08:39,000
Speaker 1: interesting topic next year? I mean we've we had a

151
00:08:39,000 --> 00:08:42,480
Speaker 1: panel on it. We got some telco experts to come

152
00:08:42,520 --> 00:08:46,160
Speaker 1: along and we had a lovely conversation on stage. It

153
00:08:46,400 --> 00:08:50,520
Speaker 1: might have been overshadowed by some other panels that we

154
00:08:50,600 --> 00:08:52,840
Speaker 1: ran that were kind of more high level. Five G

155
00:08:53,040 --> 00:08:55,840
Speaker 1: is still even though the rollout is just starting, the

156
00:08:55,920 --> 00:08:59,120
Speaker 1: impact is only really going to be significant sort of

157
00:08:59,240 --> 00:09:05,760
Speaker 1: twenty bete. So it's something we'll keep talking about. But yeah,

158
00:09:05,800 --> 00:09:09,079
Speaker 1: well we'll we'll definitely keep talking about it. I appreciate

159
00:09:09,120 --> 00:09:10,680
Speaker 1: the fact that you're saying that this rollout is going

160
00:09:10,760 --> 00:09:13,800
Speaker 1: to take till because you know, as we've moved from

161
00:09:14,320 --> 00:09:16,920
Speaker 1: three G to four G and now five G, I

162
00:09:16,920 --> 00:09:19,320
Speaker 1: think that we as consumers may take for granted that

163
00:09:19,360 --> 00:09:22,200
Speaker 1: this stuff is going to roll out super fast, but really,

164
00:09:22,360 --> 00:09:26,559
Speaker 1: just given the physical size of the infrastructure that has

165
00:09:26,600 --> 00:09:29,000
Speaker 1: to be laid in order to make this work, it's

166
00:09:29,000 --> 00:09:31,840
Speaker 1: going to take some time. Do you see that as

167
00:09:31,920 --> 00:09:34,720
Speaker 1: the largest barrier to roll out or is it lagging

168
00:09:34,760 --> 00:09:37,840
Speaker 1: technology in other ways that maybe I'm not aware of

169
00:09:37,880 --> 00:09:42,440
Speaker 1: it all. I wouldn't say, it's the technology that's holding

170
00:09:42,800 --> 00:09:46,079
Speaker 1: five G up at all. If anything, it might be

171
00:09:46,600 --> 00:09:49,800
Speaker 1: a policy problem in terms of how you roll out

172
00:09:49,840 --> 00:09:55,640
Speaker 1: these small cell substations where instead of having as with

173
00:09:55,720 --> 00:10:00,720
Speaker 1: previous technologies uh standards, um, you'd be able to put

174
00:10:00,760 --> 00:10:05,000
Speaker 1: a base station that could cover a wide area with

175
00:10:05,120 --> 00:10:06,920
Speaker 1: five G. The idea is to put a lot of

176
00:10:06,960 --> 00:10:12,240
Speaker 1: little small cells in place that kind of cover hundred

177
00:10:12,320 --> 00:10:16,560
Speaker 1: three much smaller range and and sort of dot those

178
00:10:16,600 --> 00:10:18,960
Speaker 1: throughout the city. So that kind of rollout. It's a

179
00:10:19,040 --> 00:10:22,360
Speaker 1: very different infrastructure player from what what we used to

180
00:10:22,480 --> 00:10:24,600
Speaker 1: from the set of the space, so that might take

181
00:10:24,600 --> 00:10:27,240
Speaker 1: a little bit more time about how you go about

182
00:10:27,320 --> 00:10:30,280
Speaker 1: rolling that out. You need to auction the spectrum. So

183
00:10:30,280 --> 00:10:33,199
Speaker 1: there's all these different policy challenges that are that are

184
00:10:33,240 --> 00:10:37,000
Speaker 1: holding things up the technology. I mean, I've I've spoken

185
00:10:37,040 --> 00:10:40,120
Speaker 1: to a lot of experts in the space who are

186
00:10:40,760 --> 00:10:43,880
Speaker 1: have got their hands and developing the technology, and they

187
00:10:43,920 --> 00:10:47,439
Speaker 1: sort of are not concerned about having it ready on time.

188
00:10:47,520 --> 00:10:50,280
Speaker 1: It's it's more about how to go about deploying it

189
00:10:50,679 --> 00:10:52,960
Speaker 1: and who are the company's deploying it. Because I've seen

190
00:10:53,120 --> 00:10:56,880
Speaker 1: Huawei mentioned a lot in the news. Yes, so that's

191
00:10:56,880 --> 00:10:59,160
Speaker 1: certainly somebody you should be aware of another one's qualcom

192
00:11:00,040 --> 00:11:02,959
Speaker 1: mean Ericson and Nokia are the companies that are are

193
00:11:02,960 --> 00:11:06,800
Speaker 1: heavily involved in developing the technology for the base stations.

194
00:11:07,240 --> 00:11:11,520
Speaker 1: UM but I mean the space, just like a lot

195
00:11:11,520 --> 00:11:16,439
Speaker 1: of industries, is heavily interconnected. So the effect of bands

196
00:11:16,520 --> 00:11:21,240
Speaker 1: on Hawaewi and UM the Chinese tech companies do have

197
00:11:21,280 --> 00:11:25,320
Speaker 1: an effect on on the rollout, but we don't see

198
00:11:25,400 --> 00:11:29,560
Speaker 1: it having like a major stopping effect. It's it's still

199
00:11:29,600 --> 00:11:31,800
Speaker 1: going to go ahead. There are enough companies working on

200
00:11:31,800 --> 00:11:35,880
Speaker 1: this space with enough capability that five G rollouts will

201
00:11:35,880 --> 00:11:42,360
Speaker 1: be proceeding occasionally with minor blips like the one induced

202
00:11:42,360 --> 00:11:46,600
Speaker 1: by Hallaway's recent troubles. Andrew, thank you so much for

203
00:11:46,679 --> 00:11:50,080
Speaker 1: joining us today. Thank you Danna, and we will hopefully

204
00:11:50,120 --> 00:11:54,120
Speaker 1: have you on again on Switched on b n e

205
00:11:54,240 --> 00:11:57,160
Speaker 1: F is a service provided by Bloomberg Finance LP and

206
00:11:57,160 --> 00:12:00,600
Speaker 1: its affiliates. The recording does not constitute, nor should it

207
00:12:00,640 --> 00:12:04,520
Speaker 1: be construed as investment and vice investment recommendations, or a

208
00:12:04,559 --> 00:12:08,400
Speaker 1: recommendation as to an investment or other strategy. Bloomberg and

209
00:12:08,600 --> 00:12:11,920
Speaker 1: f should not be considered as information sufficient upon which

210
00:12:12,040 --> 00:12:15,800
Speaker 1: to base an investment decision. Neither Bloomberg Finance LP nor

211
00:12:15,880 --> 00:12:19,560
Speaker 1: its affiliates makes any representation or warranty as to the

212
00:12:19,600 --> 00:12:23,320
Speaker 1: accuracy or competentness of the information contained in this recording,

213
00:12:23,440 --> 00:12:26,240
Speaker 1: and any liability as a result of this recording is

214
00:12:26,280 --> 00:12:27,520
Speaker 1: expressly disclaimed