Wednesday, September 11, 2019

Why 5G Network Capex is Much Lower than Orginally Projected

The cost of new 5G networks no longer is viewed as dangerously high, thanks to development of non-standalone 5G. Where there is concern about the 5G business model, it is not because 5G capital investment demands are so high, but because of the mobile business model in a particular market.

That is to say, where mobile operators have just made big investments in 4G, there will be obvious reluctance to make another big round of investments before 4G can be monetized and amortized. 


That constraint aside, standards bodies, service providers and infrastructure platform suppliers all have worked to develop lower-cost ways of launching 5G. In Southeast Asia, for example, non-standalone 5G, which reuses the 4G core network, signaling infrastructure and much of the existing base of cell towers and backhaul, is about five times cheaper than stand-alone 5G facilities, on a cost-per-gigabyte basis, according to A.T. Kearney. 

The bottom line is that non-standalone 5G allows a more-graceful deployment of 5G, without the budget-busting implications of standalone 5G, a way to scale deployment and revenues that is more evolutionary than revolutionary. 

Gone now are the early and wild predictions that 5G would cost 10 times to 100 times the amount required to build 4G.

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