Speaker 1: Hi, this is Dana Perkins, and you're listening to Switch
Speaker 1: on the B and E F Podcast. Today we are
Speaker 1: going to talk about the role of five G in cars.
Speaker 1: You may have seen in the news that five G
Speaker 1: is rolling out in various locations around the world, and
Speaker 1: I think a lot of us are thinking about how
Speaker 1: five G is going to impact our lives in terms
Speaker 1: of the phones that were physically going to hold in
Speaker 1: our hands, amazing processing power in the palm of your hand,
Speaker 1: and I can't help but think about people queuing up
Speaker 1: outside of Apple waiting to get their next edition of
Speaker 1: the iPhone. And I'm sure we're going to see some
Speaker 1: of that with different five G enabled phones. But today
Speaker 1: we're really going to talk about cars and the other
Speaker 1: things that five G can do for us. Five G
Speaker 1: has the potential to unlock various things within the smart
Speaker 1: home and smart building space and also within the vehicle
Speaker 1: and mobility space. I'm joined today by our analyst Andrew Grant,
Speaker 1: who focuses his time on intelligent mobility, and he looks
Speaker 1: at everything from mobility as a service all the way
Speaker 1: through to five G. The really fun, techy stuff that
Speaker 1: you're going to interact within a car. That is what
Speaker 1: Andrew covers. If you're interested in reading more about this,
Speaker 1: you can look up BNFS research note titled the Role
Speaker 1: of five G in Cars. This is available on BNF
Speaker 1: dot com and at b NF go on the terminal.
Speaker 1: This is available to clients of BNF and if you're
Speaker 1: not yet a client but want to know more, email
Speaker 1: us at sales dot BNF at Bloomberg dot net and
Speaker 1: we will be happy to sort you out. Please note
Speaker 1: that BNF does not provide investment or strategy advice. We've
Speaker 1: got a full disclaimer at the end of the show,
Speaker 1: but right now let's go ahead and jump in. Andrew,
Speaker 1: thank you for joining us today. So I want to
Speaker 1: start with what is five G. Well, then it wouldn't
Speaker 1: surprise you to learn that five G is the fifth
Speaker 1: generation of cellular technology. So the first generation allowed you
Speaker 1: to do things like walk and talk, the second generation
Speaker 1: and allows text messaging, the third generation got everybody online,
Speaker 1: the fourth generation our content streaming, and then the fifth
Speaker 1: generation is what's coming next. So we just had rollout
Speaker 1: in the UK recently, Is that correct? Well, we had
Speaker 1: rollout of a version of five G. It comes in
Speaker 1: many different forms. It's not quite as clear and cut
Speaker 1: and dry as one generation stopping and another generation starting.
Speaker 1: It's a collection of technologies. Some of those early technologies
Speaker 1: have been rolled out in the UK over lower frequencies,
Speaker 1: but a lot more is coming operating at higher frequencies,
Speaker 1: and the possibilities of that are really interesting. So we've
Speaker 1: got this note that you've written called the roll of
Speaker 1: five G in cars. So this conversation really revolves around
Speaker 1: cars and what this is going to potentially facilitate for us.
Speaker 1: But am I correct in assuming that this is all
Speaker 1: really potential right now and that you have some technologies
Speaker 1: that can work on four G. Five G might make
Speaker 1: them better, But what's new? What is five G going
Speaker 1: to facilitate that four G can't facilitate right now? I mean,
Speaker 1: that's what we were trying to figure out with this note.
Speaker 1: I mean I've mentioned the really cornerstone breakthrough is that
Speaker 1: the different cellular generations enabled and in a lot of
Speaker 1: cases autonomous vehicles and connected cars as cited as the
Speaker 1: real breakthrough five G, and that's gonna be what we
Speaker 1: remember five G four So we wanted to really dig
Speaker 1: down and see what specific technologies worth in the vehicle
Speaker 1: would be enhanced or enabled by five G technology, and
Speaker 1: you group these into four different areas. Am I correct? Yeah,
Speaker 1: that's that's how we like to think about it. So,
Speaker 1: I mean, the first one is the most straightforward, So
Speaker 1: that's your standard connected car features at the moment. You
Speaker 1: can have a four G enabled WiFi hotspot in your vehicle.
Speaker 1: You can have a range of connected car services, streaming
Speaker 1: or updated navigation, you can have all kinds of different
Speaker 1: content streaming in your vehicle. And as connection speeds increase,
Speaker 1: then the logical assumption is that consumers will be consuming
Speaker 1: more of the of those services. So that allows you
Speaker 1: to have other services built into those vehicles, things like
Speaker 1: augmented reality, virtual reality services that consumers can can enjoy
Speaker 1: while they're traveling in the vehicle. Okay, so you're just
Speaker 1: assuming that you're not driving, because I'm thinking virtual reality
Speaker 1: is probably not a great thing when you need to
Speaker 1: be watching the road. I mean, part of this is
Speaker 1: to keep the passengers entertained. But if consumers, well, if
Speaker 1: you end up not driving your vehicle, then yes, you
Speaker 1: would need a way to be entertained as well. Would
Speaker 1: five G be required in order for us to have
Speaker 1: wide scale rollout of autonomous driving. To be quite clear,
Speaker 1: it's not necessarily required, but it does seem to help
Speaker 1: in a number of different ways. So we're looking at
Speaker 1: these four areas within your note about the role of
Speaker 1: five gen cars, so enhancing info, attainment services, cooperative intelligent
Speaker 1: transport systems, tell operation, high definition mapping. So of those,
Speaker 1: I'm going to ask you you've got to pick a
Speaker 1: favorite child you wrote this note, So if somebody wanted
Speaker 1: to read the most interesting section, which of the four
Speaker 1: do you think is the most provocative? I mean, I
Speaker 1: think the one that maybe it gets a bit too
Speaker 1: far on the weeds for for some people. But the
Speaker 1: cooperative intelligent transport system is something that's being debated now.
Speaker 1: A bunch of different markets are having different or taking
Speaker 1: different policy stances on it, and it's going to have
Speaker 1: a big effect on not just automas vehicles, but the
Speaker 1: whole road transport sector. Where are we finding five G
Speaker 1: rolling out right now? So I've seen in the news
Speaker 1: that it's in the UK and that rollout is happening
Speaker 1: as we speak. What other countries are you finding this in?
Speaker 1: I mean, in most developed markets there's some form of
Speaker 1: five G rollouts, either underway or being planned. Specific frequency
Speaker 1: spectrums are being auctioned to to the telcos across China,
Speaker 1: South Korea, Japan, um throughout Europe and Germany. We mentioned
Speaker 1: the UK, and then in the US and those are
Speaker 1: and probably I would say SINGAPOREES or so up there.
Speaker 1: It's one of the the leaders in the space. So
Speaker 1: if you're an auto manufacturer, where is the opportunity for you?
Speaker 1: Because I see the obvious opportunity for the telcos, But
Speaker 1: I'm seeing an auto manufacturer that's now got a battery
Speaker 1: that they've may be purchased from another company and now
Speaker 1: the internal computer system that is being facilitated by these
Speaker 1: mobile phones. Is there a real opportunity for them or
Speaker 1: they sort of just the physical couch and shell that's
Speaker 1: moving all of this exciting technology forward. Yeah, I mean
Speaker 1: talking about like connected cause in general now and I
Speaker 1: mean five G is part of that. But the real
Speaker 1: opportunity for automaker is is the data that they are
Speaker 1: collecting on the vehicle and how consumers are using those vehicles.
Speaker 1: They're getting a far better understanding of how those vehicles
Speaker 1: operate than they ever have before. There's more and more
Speaker 1: senses that are being packed into those vehicles that allows
Speaker 1: them to do things that they really didn't realize were
Speaker 1: possible a few years ago. So every uh, well just
Speaker 1: about every new car has a temperature gauge in it,
Speaker 1: and that gives you a really detailed weather mapp Once
Speaker 1: a big fleet of vehicles is distributed around the city,
Speaker 1: so that information that can inform their future decisions, whether
Speaker 1: that's what kind of mobility services they want to offer next,
Speaker 1: whether it's how to configure their vehicles so that they
Speaker 1: are more suitable for ride hailing and car sharing, or
Speaker 1: whether it's data that they can start sharing with third
Speaker 1: parties and start making turning that into a genuine revenue stream.
Speaker 1: So there are opportunities for automakers, but in terms of
Speaker 1: the the cellular contract and being able to actually charge
Speaker 1: consumers a price for what they consume content wise in
Speaker 1: the vehicle, they might not be as well positioned as
Speaker 1: some of the stakeholds in the space. So Andrew, every
Speaker 1: year we do an event in San Francisco that's really
Speaker 1: about mobility and technology coming together also with the energy
Speaker 1: industry and batteries and storage. Right, was five G rollout
Speaker 1: a big topic of conversation this year or were there
Speaker 1: other things that were more interesting to that audience. And
Speaker 1: and do you think five G rollout will be an
Speaker 1: interesting topic next year? I mean we've we had a
Speaker 1: panel on it. We got some telco experts to come
Speaker 1: along and we had a lovely conversation on stage. It
Speaker 1: might have been overshadowed by some other panels that we
Speaker 1: ran that were kind of more high level. Five G
Speaker 1: is still even though the rollout is just starting, the
Speaker 1: impact is only really going to be significant sort of
Speaker 1: twenty bete. So it's something we'll keep talking about. But yeah,
Speaker 1: well we'll we'll definitely keep talking about it. I appreciate
Speaker 1: the fact that you're saying that this rollout is going
Speaker 1: to take till because you know, as we've moved from
Speaker 1: three G to four G and now five G, I
Speaker 1: think that we as consumers may take for granted that
Speaker 1: this stuff is going to roll out super fast, but really,
Speaker 1: just given the physical size of the infrastructure that has
Speaker 1: to be laid in order to make this work, it's
Speaker 1: going to take some time. Do you see that as
Speaker 1: the largest barrier to roll out or is it lagging
Speaker 1: technology in other ways that maybe I'm not aware of
Speaker 1: it all. I wouldn't say, it's the technology that's holding
Speaker 1: five G up at all. If anything, it might be
Speaker 1: a policy problem in terms of how you roll out
Speaker 1: these small cell substations where instead of having as with
Speaker 1: previous technologies uh standards, um, you'd be able to put
Speaker 1: a base station that could cover a wide area with
Speaker 1: five G. The idea is to put a lot of
Speaker 1: little small cells in place that kind of cover hundred
Speaker 1: three much smaller range and and sort of dot those
Speaker 1: throughout the city. So that kind of rollout. It's a
Speaker 1: very different infrastructure player from what what we used to
Speaker 1: from the set of the space, so that might take
Speaker 1: a little bit more time about how you go about
Speaker 1: rolling that out. You need to auction the spectrum. So
Speaker 1: there's all these different policy challenges that are that are
Speaker 1: holding things up the technology. I mean, I've I've spoken
Speaker 1: to a lot of experts in the space who are
Speaker 1: have got their hands and developing the technology, and they
Speaker 1: sort of are not concerned about having it ready on time.
Speaker 1: It's it's more about how to go about deploying it
Speaker 1: and who are the company's deploying it. Because I've seen
Speaker 1: Huawei mentioned a lot in the news. Yes, so that's
Speaker 1: certainly somebody you should be aware of another one's qualcom
Speaker 1: mean Ericson and Nokia are the companies that are are
Speaker 1: heavily involved in developing the technology for the base stations.
Speaker 1: UM but I mean the space, just like a lot
Speaker 1: of industries, is heavily interconnected. So the effect of bands
Speaker 1: on Hawaewi and UM the Chinese tech companies do have
Speaker 1: an effect on on the rollout, but we don't see
Speaker 1: it having like a major stopping effect. It's it's still
Speaker 1: going to go ahead. There are enough companies working on
Speaker 1: this space with enough capability that five G rollouts will
Speaker 1: be proceeding occasionally with minor blips like the one induced
Speaker 1: by Hallaway's recent troubles. Andrew, thank you so much for
Speaker 1: joining us today. Thank you Danna, and we will hopefully
Speaker 1: have you on again on Switched on b n e
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