Chat iconGet in touch

Is the cellular industry setting expectations too high in the short term?

By August 29, 2018 No Comments

5G is the hot topic for telecoms operators and the vendor community. The technology is seen as a savior to struggling Network Equipment Providers. Operators in an optimistic frame of mind are promising abundant revenue streams built on new business models supported by the new technology set. A whole new class of value creation, a revolution reshaping the economy and society.

But what is the reality in the short term? What is it reasonable to expect this year and next? Telecoms innovation can seem an impenetrable rats nest of three letter acronyms, abstract concepts and complex technical diagrams.

To break through the jargon, this quick overview breaks down into three sections. First, we look at the status of 5G standards. Second, we look at operator commitments to network rollout. Finally, we deduce what services we can expect by 2020.

Standards

The Third Generation Partnership Project (3GPP) draws up specifications for cellular networks. Its great strength is to work to a single global standard.

Cellular technology evolves through 3GPP Releases. Each Release breaks down into phases which include discrete functional elements.

Early phases of “3GPP Release 15” agreed in December 2017 saw the first definition of 5G specifications. This phase covered “Non-Standalone 5G systems”. In essence, it defined the first 5G radio standards. 5G New Radio (5G NR) networks must integrate with existing LTE radio and core networks. Beyond radio, the service capability remains much the same.

The first standalone 5G (5G SA) specifications came out in July 2018. 5G SA standards will cover the complete set of cellular telecommunications network technologies, including radio access, the core transport network, and service capabilities.

Rollout

Initial 5G rollouts will be non-standalone 5G NR. According to the GSA, there are 10 launches planned by the end of 2018 and at least 17 more 5G networks scheduled for launch in 2019. All will be 5G NR and limited to urban areas. North America, the Pacific Rim and Arabian Gulf are the hot areas for 5G. Spectrum hungry parts of Europe will likely also roll out early 5G networks.

We will have to wait beyond 2020 for commercial, 5G SA networks. 5G SA rollout will include building a new 5G core and support services like network slicing and more granular quality of service (QoS) support. At MWC 2018, China Mobile confirmed its ambition to be the world’s first (and so far only) operator to defined rollout 5G SA. The programme is set to begin in 2020.

Services

What are we left with in 2018 and 2019? We can expect pockets of 5G NR radio coverage in some parts of the globe. Operators will offer faster, better cellular data with (up to) gigabit speeds on download links and lower latencies.

5G devices will initially be USB dongles, connecting laptops and other devices to 5G radio networks. The only exception to this seems to be AT&T in the US, which has promised a 5G ready smartphone in 2018, although no details have been released, no supplier named.

As to pricing, operators will be conflicted between wanting to drive adoption of the new service and the need to earn a return on their investment in new technology. A modest premium targeting early adopters may be possible. But it is difficult to conceive pricing levers above and beyond those available on current networks, so new pricing paradigms seem unlikely ahead of 5G SA rollout.

5G this year and next will offer faster wireless data to urban dwellers in some countries. May not sound the most exciting thing in those terms. But not too shabby either. If you find yourself reduced from 4G to 3G or perish the thought 2.5G speeds today, you feel a whole world of pain. Speed is great. But the technology that empowers radical new use cases, heralds a new economic and societal transformation is likely a bit away yet.