It seems that 5G is all around us already and Mobile Network Operators (MNOs) and service Providers (SPs) are doing a lot to drum up excitement. Dig a little deeper however, and different picture emerges.
In late 2021, the EE brand and demand generation communications director, Kelly Engstrom, told the world that “5G is about building excitement for future use cases.” So, are we all getting excited? She also confirmed full (but actually only outdoor) UK national 5G coverage will take until 2028 to complete. Perhaps we shouldn’t be getting excited too soon then! It seems EE’s rollout plans are more or less in line with the other MNOs in the UK. Ubiquitous 5G is still a long way off.
Although there was, and still is, a race to make early 5G coverage claims, the actual pace of roll out is a bit more sedate. There are good reasons for this, the technology is not cheap to roll-out, new and re-farmed spectrum needs to be prepared – involving the retirement of 3G technology – technical standards are still only at 60% finalisation, the ‘China core’ problem, availability of handsets, and perhaps most significant of all, the worry over payback. The cost of capital is heading in the wrong direction for expensive infrastructure problems.
Should we be concerned as customers about the state of 5G? Probably not is our view and here is why.
The three pillars of 5G are enhanced mobile broadband (eMBB), ultra reliable, low-latency communications (URLLC), and massive machine-type communications (mMTC). In simple terms faster, instant and IoT ready. The idea was to be able to develop many more use cases and broaden the horizons for mobile communication business plans. Some observers have noted that many of the new use cases identified for 5G are able to be delivered on 4G, but really 5G is all about doing these things on scale and at lower delivery costs.
Perhaps nearly all current mobile phone usage is in the consumer sector, individuals making calls, sending messages, attending to their social media, web searching and doing a bit of streaming. Yes, businesses and business men use mobile devices too but mainly to do the same things consumers do. 5G is meant to change that. The ability for mobile to integrate deep into business processes and improve productivity makes up two of those three 5G pillars. These are supposedly where the new business cases are to be mined and where new revenues and 5G pay back will come from. All well and good but URLLC and mMTC do little for the consumer and today’s customer base is consumer orientated in its behaviour. What the consumer wants, or so we are told, is faster data speeds to get things done quicker. Even without these new use cases data traffic growth in the UK is something like 40% year-on-year. This puts a drain on available capacity and a choke on data throughput speeds and as we all know, it’s all about speed today. And so, eMBB is what’s needed first from 5G and therefore, step forward 5G Non Standalone.
5G NSA is the method widely adopted to get 5G ‘out there’. The advantage is that it only needs the 5G radio in place and relies on the ‘old’ 4G core for call management and processing. We do need to add a caveat alongside only needing to deploy the radio, as this in itself is no straightforward task. 5G NSA does tick one important box for SPs, the 5G icon can be lit on the device and this means MNOs and SPs can sell 5G plans at premium prices. 5G NSA broadly supports eMBB so users can get faster data speeds where it has been rolled out. Looking at UK MNO published plans, it would seem that they are at about 50% of population coverage today for outdoor. Predictions for indoor coverage are much harder to come across. Improving indoor coverage, something we all badly want, requires (in a large part) the use of lower band spectrum and this is achieved by the use of new 700MHz band spectrum and requiring 3G technology in the low and mid-range bands to be retired to make way for 5G. 5G alone doesn’t improve indoor coverage without the help of the right frequency bands. The dilemma for all MNOs is that this low band spectrum is still limited and the more abundant spectrum is up in the higher 2.6GHz and 3.4/6GHz bands and these are not nearly so effective for wide area macro coverage or for in building penetration. It may be that we have an even longer wait for ubiquitous indoor 5G coverage.
That is not to say the MNOs are sitting on their hands. As we have said above, new spectrum is being deployed and new sites in urban and particularly dense urban areas are being built because coverage at 2.6GHz and above does require a lot more sites to achieve the equivalent coverage attainable at 700 -900MHz. VirginMedia02 have declared a plan to build 1300 new sites in London alone. This is driven not only by the need to deliver the required coverage but also to deal with the annual data traffic growth. Acquiring and building new sites takes time and money. It isn’t a quick process even with some of the imaginative partnering VM02 are employing to get this done. We all want 5G but we don’t want a new 5G radio site in our street! Deploying new sites has never been so difficult to get done.
Using 5G NSA and deploying 5G in new and re-farmed Spectrum does mean that we consumers will get to experience faster data speeds ahead of what we would call full 5G deployment, that is also using a fit-for-purpose 5G core. 5G NSA is not wart free. During its roll-out phase its coverage is patchy and islands of 5G emerge making the call management difficult as the device clings to 5G even when the signal strength is weak and 4G would be the better option for the device to move to. This can result in a poor user experience and we think may be the reason why some of the predominant device manufacturers are unsure about committing to device sales until 5G SA is rolled out.
For many in the industry 5G doesn’t arrive until 5G SA does. Certainly for the new bold business cases based around new use cases for URLLC and mMTC the horizon still seems a long way off. And if these new use cases are still largely unproven and under developed today, the pressure for getting 5G SA done diminishes. There is a worry point for MNOs though. Can 5G pay for itself without the diversification from today’s consumer market and the introduction of the brand of services that 5G was always supposed to deliver? Can MNOs on their own deliver these new services or are they dependent on new partnerships and the help of new and different skill sets to deliver?
Our view is that for those waiting for 5G technology to deliver smart traffic lights, dynamic traffic control, tele controlled autonomous vehicles, AI, industrialised IoT, automated healthcare, robot assisted surgery, more efficient utilities (OK, not even 5G can do that one!), we’ll all have to be a bit more patient, no matter how much excitement service providers drum up today.
Interested in talking to us about 5G and your associated business needs? eel free to contact us here https://azenby.com/contact