Many older assumptions about 5G are proving to be incorrect. Though many feared 5G capital investment would be many times higher than 4G, there now is growing recognition that, in fact, 5G capex costs might be no higher, and might well be lower.
“We expect that any 5G cycle will be muted; at least over the next two to three years until business models further develop,” say analysts at Jefferies. “To be clear, we still believe that 5G infrastructure deployment will happen.”
But Jefferies analysts also believe 5G capex will be a replacement of existing 4G spending, so budgets will not grow.
“We don’t expect the overall capex expenditure pie will grow due to 5G,” they say.
Technology developments such as better radios using massive multiple-input, multiple-output radios also help, as they increase the range of 5G signals using 3.5-GHz spectrum, for example, to match signal propagation of 4G signals at 1.8-GHz frequencies.
That means existing cell tower locations might well be the same locations needed for 5G. At the same time, that also reduces the need for dense small cell networks.
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