Can Operators Bend the Infrastructure Cost Curve?

There are huge disagreements about what 5G network investment will require. Some predict a doubling or tripling of investment, compared to 4G. Others think only incremental investment is required (four percent higher, or so). And a few might even argue that overall capex could be less than required for 4G, at least in some cases.

It is even possible that “all the above” could happen. Different markets and specific suppliers have different assets, and some rollouts will therefore cost less than other contenders (with fewer relevant assets) can field.

Though 5G will use “all of the above” frequency assets (there will not be, as in prior networks, fixed bands to support the network), the use of huge amounts of new millimeter wave spectrum is key. Such networks virtually require use of small cells.

So use of millimeter wave spectrum is the main reason skeptics believe the cost of 5G networks could double or triple.

To be sure, cell geometry does not change. Reducing the radius of a cell by 50 percent quadruples the number of transmission sites.

But linear extrapolations from history might be misleading, as technology parameters are changing.  

A growing number of observers might actually argue there will be flat to lower capex requirements, based on use of open source, virtualized platforms, reuse  or deployment of existing assets (tower sites, fallow spectrum), plus ability to aggregate (bond, essentially) licensed and unlicensed spectrum assets, plus huge amounts of new spectrum, including lots of unlicensed spectrum or lower-cost shared spectrum.

The point is that 5G is perhaps as likely to represent incremental capex levels (“like” 4G in terms of capex) as it is to represent some hypothetical “huge increase” in capex. History suggests actual practice is more likely to represent continuity with past spending than a break with past practice (much higher investment for 5G).  

Infrastructure sharing might be an important issue in some markets. Existing spectrum assets also vary widely. Some providers simply have more spectrum assets, of the required type, than do others. So there is likely not a single answer.