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Telecom operators are spending billions of dollars to lay the groundwork for fifth-generation wireless network development, but those investments aren't likely to pay off for another decade, when widespread 5G business applications and internet of things deployments are expected to develop.
But for now, according to one analyst, 5G wireless offers no guarantees.
Amid the hype that already surrounds 5G wireless technology, Chris Antlitz, senior telecom analyst at Technology Business Research, a consultancy based in Hampton, N.H., said the push toward 5G deployment begins in earnest this year with two predominant use cases -- fixed wireless broadband and early 5G mobile services.
Those phase one developments, expected to stretch into 2020, will center on finalizing equipment standards, 5G fixed wireless broadband availability, the release of chipsets for 5G compatible smartphones and the earliest standards-based 5G wireless technology deployments, according to Antlitz, author of a new TBR report on 5G wireless development.
The standards for 5G wireless equipment are being worked on in two different efforts -- 5G new radio standards first, with mobile core standards to follow later this year.
The 3rd Generation Partnership Project completed 5G new radio standards in December because leading operators were putting extreme pressure on the standards bodies so they can come to market with fixed wireless broadband quickly, Antlitz said. The new radios are in factories being produced now, and the earliest standards-based 5G radios can be commercially deployed is later this year. To deliver fixed wireless broadband, the new radios are attached to telephone poles or something else and beam a signal into a receiver at a business or residence to provide high-speed bandwidth, Antlitz said. To facilitate this effort, many operators are taking on the expense of laying fiber closer to customers' premises.
For service providers with newer wireless radio systems, 5G radios can be deployed through a software upgrade rather than buying completely new hardware, since they are backward compatible with 4G LTE radios, Antlitz said. This will make some deployments faster, but operators with older radios will need to replace them.
"The hardware component isn't as significant as in prior radio generations where you literally had to dispatch people to set up new radio equipment," Antlitz said.
Following the new radio standards, the 5G mobile core standards are expected to be completed in June. The new mobile core isn't required for fixed wireless services, which can be deployed using an LTE evolved packet core for the mobile core system.
Even as standards are being finalized, network operators -- primarily based in China, South Korea, Japan and the United States -- have been moving ahead with 5G wireless technology.
For example, this year Verizon plans to offer residential 5G fixed wireless broadband services using radio signals, rather than copper or fiber cables, in up to five U.S. cities. Verizon signed a $1.1 billion, three-year deal with glass manufacturer Corning Inc. to supply the fiber. AT&T plans to launch 5G mobile services in three U.S. cities -- without 5G-specific devices -- using millimeter wave spectrum later this year.
The carriers, Antlitz said, hope they'll earn revenue to offset these investments, but at least so far, no one has figured out exactly how.
"If you're an AT&T and you can save a billion dollars in operating expense, just to throw out a random number, there's a strong push to adopt some new architectures because of the efficiency gains," Antlitz said. The problem is, it's not going to drive down operators' costs. "But that's what they're really focusing on, at least for phase one," he said.
The wait for the 5G business case
Next year will be a big acceleration point for the 5G wireless technology market, especially in the United States, Antlitz said. "We'll see the stars aligning for people to actually start consuming 5G," he said.
Chris Antlitzsenior telecom analyst, Technology Business Research (TBR)
Commercial and business consumption, however, won't occur until 2020 at the earliest, Antlitz said, fueled at first by the internet of things and later by enterprises integrating 5G use cases into their network offerings. In the years to come, any mission-critical application that requires low latency could be a viable candidate for 5G transmission, Antlitz said.
"We're going see a renaissance in new use cases and new business cases around those use cases coming to the market, but we don't know yet what those use cases are yet," he said.
For now, operators are currently justifying their investments due to efficiency gains, not as-yet-undeveloped 5G mobile services. Several providers are building out their fiber networks to provide fixed wireless broadband services that can deliver wireless connectivity at fiber-optic speeds but without extending fiber directly to the premises.