Skepticism about prospects for any new technology are common, perhaps even natural, which is why the Gartner emerging technology hype cycle exists. The pattern is overblown expectations, followed by a period of disillusionment, with eventual emergence as a useful tool.
It appears 5G is no exception, as some observers complain that new use cases and apps are not developing. It is worth noting that such concern was expressed as 3G and 4G as well, and nobody would consider either 3G or 4G “failures” in a commercial sense, even if many predicted new use cases took longer to develop than expected, and some use cases have not yet developed.
The larger point is that concern about the business model has been a feature of early deployment of 3G, 4G and now 5G. When 6G comes, we can be certain there will the same concerns expressed as well.
Of course, there are many ways to look at 5G value. Every next-generation mobile network has led to new use cases and revenue drivers. But each next-generation network has succeeded for other reasons: they have allowed mobile operators to satisfying growing customer demand for capacity, bandwidth and data usage.
In other words, ignoring new use cases that will develop over time, 5G is necessary simply to provide lower cost per bit, as 40 percent to 50 percent more data capacity has to be added every year, while retail consumer prices increase only at about the rate of gross domestic product growth, in low single digits.
The business model is “you get to keep your business,” not mostly “new use cases.” The former is essential, the latter helpful. To be practical, the business value of 5G is that it replaces 4G, with all the revenues 4G represents, while creating a platform for some new use cases and revenue sources, which might take some time to develop fully.
That “you get to keep your business” value might not seem like such a big deal, but the analogy is the upgrade from copper access media to optical or other broadband platforms. It matters greatly whether an access provider is able to protect its existing business.
That process has played out in the access business for well over two decades already, as the decision to deploy FTTH or any other higher-performance access platform has been evaluated. Quite often, the business advantage boils down to “staying competitive in the internet access business” more than anything else.
In that sense, the evolution matches the increase in computing power of our personal devices over the decades. The business model for newer processors is “you get to keep your business.”
Skepticism about 5G is fundamentally misplaced. The slow development of new use cases--some of which might be unforeseen--is normal and typical.
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