WEBVTT - 5G in Cars: Is This Where We Go Autonomous?

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<v Speaker 1>Hi, this is Dana Perkins, and you're listening to Switch

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<v Speaker 1>on the B and E F Podcast. Today we are

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<v Speaker 1>going to talk about the role of five G in cars.

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<v Speaker 1>You may have seen in the news that five G

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<v Speaker 1>is rolling out in various locations around the world, and

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<v Speaker 1>I think a lot of us are thinking about how

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<v Speaker 1>five G is going to impact our lives in terms

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<v Speaker 1>of the phones that were physically going to hold in

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<v Speaker 1>our hands, amazing processing power in the palm of your hand,

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<v Speaker 1>and I can't help but think about people queuing up

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<v Speaker 1>outside of Apple waiting to get their next edition of

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<v Speaker 1>the iPhone. And I'm sure we're going to see some

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<v Speaker 1>of that with different five G enabled phones. But today

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<v Speaker 1>we're really going to talk about cars and the other

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<v Speaker 1>things that five G can do for us. Five G

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<v Speaker 1>has the potential to unlock various things within the smart

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<v Speaker 1>home and smart building space and also within the vehicle

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<v Speaker 1>and mobility space. I'm joined today by our analyst Andrew Grant,

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<v Speaker 1>who focuses his time on intelligent mobility, and he looks

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<v Speaker 1>at everything from mobility as a service all the way

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<v Speaker 1>through to five G. The really fun, techy stuff that

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<v Speaker 1>you're going to interact within a car. That is what

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<v Speaker 1>Andrew covers. If you're interested in reading more about this,

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<v Speaker 1>you can look up BNFS research note titled the Role

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<v Speaker 1>of five G in Cars. This is available on BNF

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<v Speaker 1>dot com and at b NF go on the terminal.

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<v Speaker 1>This is available to clients of BNF and if you're

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<v Speaker 1>not yet a client but want to know more, email

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<v Speaker 1>us at sales dot BNF at Bloomberg dot net and

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<v Speaker 1>we will be happy to sort you out. Please note

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<v Speaker 1>that BNF does not provide investment or strategy advice. We've

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<v Speaker 1>got a full disclaimer at the end of the show,

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<v Speaker 1>but right now let's go ahead and jump in. Andrew,

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<v Speaker 1>thank you for joining us today. So I want to

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<v Speaker 1>start with what is five G. Well, then it wouldn't

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<v Speaker 1>surprise you to learn that five G is the fifth

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<v Speaker 1>generation of cellular technology. So the first generation allowed you

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<v Speaker 1>to do things like walk and talk, the second generation

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<v Speaker 1>and allows text messaging, the third generation got everybody online,

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<v Speaker 1>the fourth generation our content streaming, and then the fifth

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<v Speaker 1>generation is what's coming next. So we just had rollout

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<v Speaker 1>in the UK recently, Is that correct? Well, we had

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<v Speaker 1>rollout of a version of five G. It comes in

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<v Speaker 1>many different forms. It's not quite as clear and cut

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<v Speaker 1>and dry as one generation stopping and another generation starting.

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<v Speaker 1>It's a collection of technologies. Some of those early technologies

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<v Speaker 1>have been rolled out in the UK over lower frequencies,

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<v Speaker 1>but a lot more is coming operating at higher frequencies,

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<v Speaker 1>and the possibilities of that are really interesting. So we've

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<v Speaker 1>got this note that you've written called the roll of

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<v Speaker 1>five G in cars. So this conversation really revolves around

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<v Speaker 1>cars and what this is going to potentially facilitate for us.

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<v Speaker 1>But am I correct in assuming that this is all

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<v Speaker 1>really potential right now and that you have some technologies

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<v Speaker 1>that can work on four G. Five G might make

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<v Speaker 1>them better, But what's new? What is five G going

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<v Speaker 1>to facilitate that four G can't facilitate right now? I mean,

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<v Speaker 1>that's what we were trying to figure out with this note.

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<v Speaker 1>I mean I've mentioned the really cornerstone breakthrough is that

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<v Speaker 1>the different cellular generations enabled and in a lot of

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<v Speaker 1>cases autonomous vehicles and connected cars as cited as the

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<v Speaker 1>real breakthrough five G, and that's gonna be what we

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<v Speaker 1>remember five G four So we wanted to really dig

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<v Speaker 1>down and see what specific technologies worth in the vehicle

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<v Speaker 1>would be enhanced or enabled by five G technology, and

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<v Speaker 1>you group these into four different areas. Am I correct? Yeah,

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<v Speaker 1>that's that's how we like to think about it. So,

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<v Speaker 1>I mean, the first one is the most straightforward, So

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<v Speaker 1>that's your standard connected car features at the moment. You

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<v Speaker 1>can have a four G enabled WiFi hotspot in your vehicle.

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<v Speaker 1>You can have a range of connected car services, streaming

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<v Speaker 1>or updated navigation, you can have all kinds of different

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<v Speaker 1>content streaming in your vehicle. And as connection speeds increase,

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<v Speaker 1>then the logical assumption is that consumers will be consuming

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<v Speaker 1>more of the of those services. So that allows you

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<v Speaker 1>to have other services built into those vehicles, things like

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<v Speaker 1>augmented reality, virtual reality services that consumers can can enjoy

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<v Speaker 1>while they're traveling in the vehicle. Okay, so you're just

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<v Speaker 1>assuming that you're not driving, because I'm thinking virtual reality

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<v Speaker 1>is probably not a great thing when you need to

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<v Speaker 1>be watching the road. I mean, part of this is

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<v Speaker 1>to keep the passengers entertained. But if consumers, well, if

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<v Speaker 1>you end up not driving your vehicle, then yes, you

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<v Speaker 1>would need a way to be entertained as well. Would

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<v Speaker 1>five G be required in order for us to have

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<v Speaker 1>wide scale rollout of autonomous driving. To be quite clear,

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<v Speaker 1>it's not necessarily required, but it does seem to help

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<v Speaker 1>in a number of different ways. So we're looking at

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<v Speaker 1>these four areas within your note about the role of

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<v Speaker 1>five gen cars, so enhancing info, attainment services, cooperative intelligent

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<v Speaker 1>transport systems, tell operation, high definition mapping. So of those,

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<v Speaker 1>I'm going to ask you you've got to pick a

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<v Speaker 1>favorite child you wrote this note, So if somebody wanted

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<v Speaker 1>to read the most interesting section, which of the four

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<v Speaker 1>do you think is the most provocative? I mean, I

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<v Speaker 1>think the one that maybe it gets a bit too

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<v Speaker 1>far on the weeds for for some people. But the

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<v Speaker 1>cooperative intelligent transport system is something that's being debated now.

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<v Speaker 1>A bunch of different markets are having different or taking

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<v Speaker 1>different policy stances on it, and it's going to have

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<v Speaker 1>a big effect on not just automas vehicles, but the

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<v Speaker 1>whole road transport sector. Where are we finding five G

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<v Speaker 1>rolling out right now? So I've seen in the news

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<v Speaker 1>that it's in the UK and that rollout is happening

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<v Speaker 1>as we speak. What other countries are you finding this in?

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<v Speaker 1>I mean, in most developed markets there's some form of

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<v Speaker 1>five G rollouts, either underway or being planned. Specific frequency

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<v Speaker 1>spectrums are being auctioned to to the telcos across China,

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<v Speaker 1>South Korea, Japan, um throughout Europe and Germany. We mentioned

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<v Speaker 1>the UK, and then in the US and those are

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<v Speaker 1>and probably I would say SINGAPOREES or so up there.

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<v Speaker 1>It's one of the the leaders in the space. So

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<v Speaker 1>if you're an auto manufacturer, where is the opportunity for you?

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<v Speaker 1>Because I see the obvious opportunity for the telcos, But

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<v Speaker 1>I'm seeing an auto manufacturer that's now got a battery

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<v Speaker 1>that they've may be purchased from another company and now

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<v Speaker 1>the internal computer system that is being facilitated by these

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<v Speaker 1>mobile phones. Is there a real opportunity for them or

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<v Speaker 1>they sort of just the physical couch and shell that's

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<v Speaker 1>moving all of this exciting technology forward. Yeah, I mean

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<v Speaker 1>talking about like connected cause in general now and I

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<v Speaker 1>mean five G is part of that. But the real

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<v Speaker 1>opportunity for automaker is is the data that they are

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<v Speaker 1>collecting on the vehicle and how consumers are using those vehicles.

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<v Speaker 1>They're getting a far better understanding of how those vehicles

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<v Speaker 1>operate than they ever have before. There's more and more

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<v Speaker 1>senses that are being packed into those vehicles that allows

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<v Speaker 1>them to do things that they really didn't realize were

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<v Speaker 1>possible a few years ago. So every uh, well just

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<v Speaker 1>about every new car has a temperature gauge in it,

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<v Speaker 1>and that gives you a really detailed weather mapp Once

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<v Speaker 1>a big fleet of vehicles is distributed around the city,

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<v Speaker 1>so that information that can inform their future decisions, whether

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<v Speaker 1>that's what kind of mobility services they want to offer next,

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<v Speaker 1>whether it's how to configure their vehicles so that they

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<v Speaker 1>are more suitable for ride hailing and car sharing, or

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<v Speaker 1>whether it's data that they can start sharing with third

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<v Speaker 1>parties and start making turning that into a genuine revenue stream.

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<v Speaker 1>So there are opportunities for automakers, but in terms of

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<v Speaker 1>the the cellular contract and being able to actually charge

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<v Speaker 1>consumers a price for what they consume content wise in

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<v Speaker 1>the vehicle, they might not be as well positioned as

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<v Speaker 1>some of the stakeholds in the space. So Andrew, every

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<v Speaker 1>year we do an event in San Francisco that's really

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<v Speaker 1>about mobility and technology coming together also with the energy

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<v Speaker 1>industry and batteries and storage. Right, was five G rollout

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<v Speaker 1>a big topic of conversation this year or were there

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<v Speaker 1>other things that were more interesting to that audience. And

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<v Speaker 1>and do you think five G rollout will be an

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<v Speaker 1>interesting topic next year? I mean we've we had a

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<v Speaker 1>panel on it. We got some telco experts to come

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<v Speaker 1>along and we had a lovely conversation on stage. It

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<v Speaker 1>might have been overshadowed by some other panels that we

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<v Speaker 1>ran that were kind of more high level. Five G

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<v Speaker 1>is still even though the rollout is just starting, the

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<v Speaker 1>impact is only really going to be significant sort of

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<v Speaker 1>twenty bete. So it's something we'll keep talking about. But yeah,

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<v Speaker 1>well we'll we'll definitely keep talking about it. I appreciate

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<v Speaker 1>the fact that you're saying that this rollout is going

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<v Speaker 1>to take till because you know, as we've moved from

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<v Speaker 1>three G to four G and now five G, I

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<v Speaker 1>think that we as consumers may take for granted that

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<v Speaker 1>this stuff is going to roll out super fast, but really,

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<v Speaker 1>just given the physical size of the infrastructure that has

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<v Speaker 1>to be laid in order to make this work, it's

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<v Speaker 1>going to take some time. Do you see that as

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<v Speaker 1>the largest barrier to roll out or is it lagging

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<v Speaker 1>technology in other ways that maybe I'm not aware of

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<v Speaker 1>it all. I wouldn't say, it's the technology that's holding

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<v Speaker 1>five G up at all. If anything, it might be

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<v Speaker 1>a policy problem in terms of how you roll out

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<v Speaker 1>these small cell substations where instead of having as with

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<v Speaker 1>previous technologies uh standards, um, you'd be able to put

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<v Speaker 1>a base station that could cover a wide area with

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<v Speaker 1>five G. The idea is to put a lot of

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<v Speaker 1>little small cells in place that kind of cover hundred

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<v Speaker 1>three much smaller range and and sort of dot those

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<v Speaker 1>throughout the city. So that kind of rollout. It's a

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<v Speaker 1>very different infrastructure player from what what we used to

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<v Speaker 1>from the set of the space, so that might take

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<v Speaker 1>a little bit more time about how you go about

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<v Speaker 1>rolling that out. You need to auction the spectrum. So

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<v Speaker 1>there's all these different policy challenges that are that are

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<v Speaker 1>holding things up the technology. I mean, I've I've spoken

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<v Speaker 1>to a lot of experts in the space who are

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<v Speaker 1>have got their hands and developing the technology, and they

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<v Speaker 1>sort of are not concerned about having it ready on time.

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<v Speaker 1>It's it's more about how to go about deploying it

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<v Speaker 1>and who are the company's deploying it. Because I've seen

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<v Speaker 1>Huawei mentioned a lot in the news. Yes, so that's

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<v Speaker 1>certainly somebody you should be aware of another one's qualcom

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<v Speaker 1>mean Ericson and Nokia are the companies that are are

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<v Speaker 1>heavily involved in developing the technology for the base stations.

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<v Speaker 1>UM but I mean the space, just like a lot

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<v Speaker 1>of industries, is heavily interconnected. So the effect of bands

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<v Speaker 1>on Hawaewi and UM the Chinese tech companies do have

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<v Speaker 1>an effect on on the rollout, but we don't see

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<v Speaker 1>it having like a major stopping effect. It's it's still

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<v Speaker 1>going to go ahead. There are enough companies working on

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<v Speaker 1>this space with enough capability that five G rollouts will

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<v Speaker 1>be proceeding occasionally with minor blips like the one induced

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<v Speaker 1>by Hallaway's recent troubles. Andrew, thank you so much for

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<v Speaker 1>joining us today. Thank you Danna, and we will hopefully

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<v Speaker 1>have you on again on Switched on b n e

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