Bandwidth Demand Eventually Will Moderate, But Not Soon

Though bandwidth consumption seems to continue to increase as much as 40 percent each year, we can probably predict with confidence that growth will not continue at that rate indefinitely. Even if one assumes people will watch lots of video, which drives bandwidth demand at present, there are only so many hours in a day. 

At some point, consumption will level off because people simply cannot spend another hour each day watching streaming video, playing games or otherwise consuming bandwidth. 

But significant growth will continue for some time, forcing internet service providers to add capacity. The business problem is that propensity to pay is relatively fixed; consumption is not. 

This is a huge business model change for connectivity providers. In the past, usage was tied to cost; so investment was relatively well matched to revenue and profit. 

source: GSMA Intelligence 

In the internet era, spending--and therefore revenue--tends to be rather fixed, no matter how much consumption grows. That is why new C-band capacity, millimeter wave assets and Citizens Broadband Radio Service have been so important for U.S. internet service providers. 

source: Mobile Experts 

There is no way consumer bandwidth demand can be met within the confines of low-band mobile spectrum, for example. Every next-generation mobile network has required new allocations of spectrum and 5G is no different in that regard. 

For 5G it is mid-band and millimeter wave that are essential, though the role of millimeter wave might not be so obvious for a few years.

The other issue is that the importance of Wi-Fi or other offloading mechanisms will continue to be crucial for indoor coverage, as millimeter wave and teraHertz signals will not propagate through walls and buildings. That is not to say indoor small cells will be unimportant, simply to note that offloading to Wi-Fi is a simple way to support many use cases.

The issue might come when 5G and other networks use features of virtualized core networks that require support all the way to the radio edge. In such instances, indoor small cells might well be necessary, to preserve use of the features.