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5G 2019

5G: behind the hype

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Simon Fletcher

Chief Technology Officer, Real Wireless, Institute of Engineering and Technology

Simon also sits on the UK5G Advisory Board and leads the International Engagement Working Group

It’s like waiting for the other shoe to drop isn’t it? We hit peak hype curve for a new technology and then the doubters start to make their voices heard. In the last few weeks there has been a generous scattering of reports and commentary throwing dark shadows over the business case for 5G.

Given sluggish smartphone take-up globally and current consumer attitudes to the costs associated with mobile data consumption, doubting the prospects of rapid ROI on 5G investments seems a pretty safe position to adopt.

Indeed, recent reports from the US suggest operators are not managing to increase revenue as quickly as data traffic rises. This has seen some questioning the motivation for the spectrum and infrastructure investments required to deliver 5G; maybe the doomsters have got it right?

Teething problems at implementation aren’t new

Well, no, not really. Those who have been around for a while will have seen first-hand the difficulties faced in deploying previous generations of connectivity solutions. They will likely also feel faintly comforted that the hype cycle will play out as it has time and time again.

In reality, it’s difficult to escape the impression that, this time around, there’s an element of ‘fake news’ or misinformation coming from some commentators.

Truthfully, I’m not sure anyone directly involved really believed that the 5G business case was going to be straightforward but that doesn’t mean it’s not going to be successful.

Of course, some of the commentary is pertinent; for example, that which is pointing to the urgent need to improve deployment regulation as well as planning and orchestration tools to cut costs and maximise assets in dense networks.

But then, some of the commentary draws on feelings of foreboding, with a number of people feeling obliged to note that only even numbered radio iterations (i.e. 2G, 4G) turn out to be successful. Four data points does not a pattern make!

Little appetite to pay more for mobile broadband

Real Wireless has been interrogating the 5G value proposition for some years. At Real Wireless, we published a techno-economic analysis within the 5G NORMA project that suggested the most likely scenario would be that there was little willingness to pay more for enhanced mobile broadband – the prime 5G use case for consumers.

At some point down the road, scaling consumer use will undoubtedly be a significant (perhaps even the primary) factor to shape the economics of 5G, but it was never going to be the starting point.

5G architecture to reflect requirements per vertical

Working on the EU’s MoNArch project confirmed to us that new 5G architecture was taking a position based on cloud-orientated techno-economics to address the specific requirements of priority verticals such as transport, media/entertainment, and health.

Enterprise uses for 5G such as modernisation of ports, network densification and the development of connected vehicles are likely to be key determinants for the economic feasibility of early stage 5G deployment.

It is also important to remember that 5G shouldn’t be seen as somehow separate from the rest of the connectivity toolbox. When 5G is deployed at scale for enterprise and consumers, it will always be one of a suite of connectivity tools – including Wi-Fi, 4G (LTE) and even 2G – that still have roles to play.

2G for example, will be needed for some time to connect rural and remote communities and also in maintaining machine to machine communications such as the UK’s smart meter rollout and the EC mandated eCall system in cars.

There are bound to be some causalities in the existing wireless industry supply chain as 5G journeys towards interdependence, combining consumer use and industry verticals. The trick to sustainability will be patient capital investment in the right digital infrastructure opportunities. That’s where I’m expecting the next interesting developments to come from.

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