Early Disillusionment with 5G is Inevitable

Wait for it: disillusionment with 5G is inevitable, once multiple networks actually cover 90 percent of the U.S. population.” In 2013, a year after 4G-LTE covered approximately 90 percent of the US population, some consumers and businesses still questioned the merits of fourth-generation wireless technology,” say consultants at Deloitte. 

If 4G and 3G provide useful comparisons, the commercialization of many new use cases and applications will lage 5G introduction by a significant amount of time. Assuming it takes two years for 5G networks to reach about 90 percent population coverage, we can assume it will take at least five years for useful new use cases to reach about 10 percent usage by the base of 5G customers. 

“Most of the innovations and business models that depend on nearly ubiquitous 4G-LTE coverage were not envisioned at its launch,” say consultants at Deloitte. 

source: Deloitte

In the 4G era, even now-popular use cases such as music or video streaming took five years to reach perhaps 20 percent usage by 4G customers. 

If 5G follows the trajectory of 3G and 4G, new use cases will take time to develop, lagging actual service availability by as much as five years (for the clear popular innovations) to 10 years (for most niche applications).

More Private Network Small Cells than Mobile Network Small Cells?

Small cells supporting 4G and 5G networks are going to be found in a wide variety of deployments, including private networks of several types. In fact, there could be more small cells deployed in private networks than in traditional public mobile networks, according to Rethink Networks data. 

“Private operators and neutral hosts will deploy the largest number of mmWave enterprise small cells by 2026,” Rethink forecasts. 

Retail, government, transport, healthcare and hospitality will lead the way in early adoption of small cell networks, and account for the highest cumulative deployments during the period between 2019 and 2026, the firm says. 

source: Rethink Research

More Spectrum, Licensed and Unlicensed Creates Private Networking Opportunities

Use cases for Wi-Fi 6, 4G and 5G private networks will be enabled in part by new standards and in part by new spectrum. Lots of new spectrum is a key enabler. In the United States, for example, 1.2 GHz of new unlicensed spectrum is authorized, where all present Wi-Fi capacity is a bit over 660 MHz. 

Private networks will be supported by unlicensed and shared spectrum in some countries, by licensed spectrum in other countries such as Germany, where some licensed spectrum specifically dedicated for enterprise private networks seems likely to be authorized, or sub-licensed by mobile operators. 

The oft-mentioned benefits include support for low delay applications such as industrial automation (2 millisecond latency), autonomous operations and high-definition video surveillance. Mission-critical applications requiring high resiliency also are frequently cited.

source: Qualcomm

Private 4G and 5G Networks: LANs and Wi-Fi the Model?

Private premises networks are not new. We have had both wired and wireless local area networks for about four decades. What is new is that ability to create private networks using off-the-shelf 4G or 5G network elements, using licensed, shared or unlicensed spectrum, where older networks used cables or unlicensed spectrum only. 

The standalone version of the 3GPP’s 5G NR standard arguably is going to be key for most enterprise users creating their own private 4G or 5G networks. What remains unclear are the range of future business models. 

source: Qualcomm

It is conceivable that mobile operators can become system integrators, designing, building and perhaps supporting such private networks for enterprises or organizations. Some enterprises will build and manage themselves, as they now handle their own Wi-Fi and other private networks.

Longer term, one would likely guess that private networks mostly will be managed directly by the organizations, even when design and installation chores are outsourced to integrators. That is the model for LANs and Wi-Fi, and makes sense for private 4G or 5G as well.

5G Processor, Modem Supplier Base Grows

By June 2020, GSA had identified 14 commercially available 5G mobile processors or platforms and eight commercially available discrete 5G modems from the five semiconductor companies. 

By way of comparison,  GSA says 18 commercially available discrete cellular 4G modem chipsets are available from five vendors: Hi-Silicon, Qualcomm, Samsung, Sanechips (formerly ZTE Microelectronics) and UNISOC (formerly Spreadtrum). 

Shipment volumes are not comparable, yet, but the processor supply chain now is largely in place to support 5G at commercial volumes. The supply of discrete modems likely will continue to build. 

source: Global Mobile Suppliers Association

All that matters because retail prices correlate to production volume: prices drop as volumes increase. That, in turn, means 5G devices are more affordable, which aids adoption by users.

Indoor 5G Small Cells Often Will Co-locate with Edge Computing Facilities

A new report by the Small Cell Forum predicts that by 2025 almost 75 percent of new indoor small cell deployments will be colocated with mobile edge computing facilities or private enterprise cell networks that interconnect with public mobile networks. 

The private networks will include a mix of neutral host facilities and enterprise private networks. 

Edge computing solutions are seen as network-based, where the service provider deploys edge computing assets, or premises-based, where an enterprise or venue owner deploys edge computing assets as part of its IT infrastructure. 

SCF logically argues that small and medium-sized organizations might not be able to financially justify a private edge computing capability, and would be “better served by a network-based edge solution.” 

“Edge compute is one of the most important developments for mobile operators (MNOs) and other service providers to consider in their next generation network strategies,” the report argues. “There are significant opportunities to harness edge compute and combine localized data center (processing, storage and analytics) capabilities with connectivity.”

source: Small Cell Forum

But the report also makes clear that “both enterprise customers and mobile network operators may deploy small cell networks as well as edge computing platforms together.” In other words, it is unclear how small cell edge computing will develop. In some cases mobile or other service providers might provide the edge computing. In other cases enterprises will do so themselves. 

Revenue opportunities thus develop for infrastructure providers and service providers. As has been true in other similar situations, opportunities for infrastructure providers and managed service providers are distinct and non-overlapping. 

source: Small Cell Forum

In principle, a connectivity provider can provide colocation (data center racks, power, cooling, security), network-related functions, an edge computing platform for third party tenants, hosted applications or fully managed computing services. Risk, expense and revenue upside vary by the choices made. 

Keep in mind that for a firm such Amazon Web Services, infrastructure as a service means computing cycles on demand. For a mobile operator, infrastructure might mean the data center rack space functions. 

A big strategic issue for mobile operators is how much of the actual computing function can be supplied on a sustainable basis. Will some customers primarily want rack space? Yes. Beyond that, might some customers want to buy  mobile operator computing, storage, platform or app offers? That is much less clear.

Private Wireless Grows in 5G Era

Private wireless networks using 4G and 5G platforms likely will be more prominent choices in the future, sometimes built as a way of creating indoor mobile network coverage, in the form of  carrier-neutral indoor networks. In other cases enterprises will create private networks to support their own applications and devices, as a substitute for, or complement to, Wi-Fi. 

source: ibWave

C-Band Key for Early 5G; So is 26 GHz to 29 GHz Millimeter Wave

The C band, around 3.3 GHz to 3.7 GHz, has emerged as a key platform for 5G globally. 

source: Everything RF

Globally, the most-used frequency bands to support 5G is in the C band, about 3.5 GHz to 3.7 GHz, followed by the 26 GHz to 29 GHZ millimeter bands. 

source: Global Mobile Suppliers Association

Mobile Device Sales Might Dip 12% in 2020

With retail outlets shuttered because of the Covid-19 pandemic, and supply chains similarly disrupted, it will come as no surprise that mobile phone sales are taking a temporary dip. IDC estimates full year 2020 device sales will be off 12 percent from 2019 levels. Longer term impact will probably be relatively nil, as demand in many cases will be shifted, not lost. 

source: IDC

5G Subscriptions to Reach 3.2 Billion by 2025, CCS Insight Says

Global 5G connections are expected to reach 3.2 billion in 2025, according to CCS Insight, an increase in its medium term forecast. 

“Although the projections for 2020 and 2021 are lower than before the pandemic struck, an increase in the long-range forecast now means that global 5G connections are expected to pass one billion in 2022, before surging to 3.2 billion by the end of 2025,” CCS Insight says. “This will be equivalent to nearly one mobile connection in every four throughout the world in 2025.”

source: CCS Insight

Satellite Operators Agree to Expedite Clearing of C-Band for 5G

The Federal Communications Commission says it has secured commitments from all eligible satellite operators to meet an accelerated clearing timeline that will make way for faster 5G in the mid-band, using 3.7 GHz C-band assets. 

In February, the Commission majority adopted rules for the C-band that will free up 280 megahertz of spectrum for 5G. But there had been concerns that the repurposing would be delayed. To encourage rapid clearing, the FCC created an incentive program making licensees eligible for up to $9.7 billion in accelerated relocation payments.

Those firms--including Eutelsat, Intelsat, SES, Star One, and Telesat--have accepted the deal. 

That means no excessive delays in clearing the lower 280 megaHertz in the band for terrestrial flexible use. 

The satellite licensees now must first clear 120 megahertz of spectrum in 46 Partial Economic Areas by December 5, 2021. In a second phase, they must clear the lower 120 megaHertz in the remaining PEAs, plus an additional 180 megaHertz nationwide, by December 5, 2023.

Execs Look for Competitive Advantage from 5G and Wi-Fi 6

A new survey by Deloitte shows that 87 percent of 415 information technology and line-of-business executives believe their company can create a “significant competitive advantage” by leveraging advanced Wi-Fi 6 and 5G. But there is an important likely caveat. 

Those connectivity options are valuable because they allow enterprises to leverage the internet of things, edge computing, cloud computing, big data analytics and artificial intelligence. 

source: Deloitte

Some 86 percent of the executives surveyed believe that advanced wireless will substantially transform their organizations “within three years” and 79 percent say the same about the effect of these technologies on their industry.

More than 80 percent believe advanced wireless connectivity is “very” or “extremely important” to their organization’s ability to take full advantage of artificial intelligence, edge computing, internet of things, cloud, and big data analytics. That might be a clue to what executives are thinking. These days, “5G” has become a sort of shorthand phrase for the full complement of business advantages firms might reap from applying AI, IoT, edge computing and better analytics. 

Enterprise executives who say they believe 5G and Wi-Fi 6 will be important are not looking to improve connectivity, which they say they are satisfied with. More than eight in 10 of these executive decision-makers are “satisfied” or “extremely satisfied” with a range of traditional performance characteristics of their current wireless networks, including reliability and resilience, data speed, latency, coverage, location accuracy, energy efficiency, and device density. 

Instead, they are looking beyond network metrics such as reliability and coverage and are instead adopting advanced wireless to “unlock competitive advantage and create new avenues for innovation in their operations and offerings,” a study by Deloitte suggests.  

source: Deloitte

Today, 4G and Wi-Fi are the most valued wireless technologies, with 75 percent and 65 percent of executives rating them within the top three critical wireless technologies for their business initiatives respectively. In comparison, only 30 percent of respondents currently consider 5G or Wi-Fi 6 as a top-three critical technology. 

source: Deloitte

Considering all the wireless technologies (e.g., 4G, 5G, various types of Wi-Fi) they’re planning to use over this period and the cost of people, hardware, software, and external consulting support, our respondent organizations estimate their three-year spending at US$115.7 million on average. 

Fifty-seven percent report that their organization is currently in the process of adopting 5G and/or Wi-Fi 6 (including planning, testing, and piloting), and another 37% plan to adopt these technologies within the next year.

source: Deloitte

Executives also expect to see tangible results within a few years. As with most such expectations, there is a high risk the benefits will take longer to achieve. 

source: Deloitte

4G has Not Yet Hit its Peak of Adoption

More than a decade after its launch in December 2009, 4G--which virtually everyone considers a success--represents perhaps 52 percent to 55 percent of all mobile accounts globally. Nor has the number of 4G subscribers, or the percentage of total connections, yet reached its peak. 

That’s the general pattern in mobile services: we launch a new mobile generation roughly every decade, but peak usage of each generation both grows over time, in absolute numbers, and reaches its peak of adoption after perhaps a decade and a half from first launch.  

Talking about 4G success, the Global Mobile Suppliers Association says there are“nearly five billion subscriptions connecting over 55 percent of mobile users worldwide.” That might be an optimistic estimate, as some other reports have 4G accounts at perhaps 4.4 billion accounts. 

According to other sources, the total number of mobile accounts globally was about 8.3 billion in 2019, with 4G accounting for 52 percent of accounts. 

source: Ericsson

Over time, as more people have become mobile users and customers, the total number of subscribers has kept rising. At its peak, there were less than four billion 2G subscribers. 4G has not yet hit its peak, but likely will top around eight billion. Eventually, more than a decade or 1.5 decades from now, 4G will have hit its peak. 

source: TeleGeography

At its peak, there were perhaps 6.5 billion 3G customers. 

The point is that 5G “success” as a platform is virtually assured. Eventually, as customers switch off from older networks (quite often because those networks are shut down), the percentage of 5G accounts will increase over a 15-year period, eventually displacing older connections and 4G. 

Over the long haul, the specific value of 5G for consumers might well boil down to “I need mobile phone service and internet access” more than any specific use cases. 

It remains to be seen whether that is as true for many enterprise scenarios, as most now expect the incremental new value of 5G to come in areas such as the internet of things and edge computing, which will be valued and purchased primarily by enterprise customers.