The Real Status and Economics of 5G Deployments

What is the real status of 5G, and what are the real economics associated with it? How will the various related areas of infrastructure support 5G? While the conversion to 5G offers some uniquely exciting possibilities, the hype associated with it has overshadowed the reality of the situation. The marketing claims of some carriers are already confusing the introduction of 5G. In a new report titled - 5G: What is the Real Status & What Are the Real Economics?, ResearchAndMarkets.com's has tried to answer all these questions.

The base purpose of 5G, to add vast amounts of mobile phone capacity, is being overshadowed. Each of the three principal varieties of 5G - mmWave, mid-band, and low-band has different qualities and capabilities. These are being continually confused by the present marketing hype. The report strives to provide a clear statement as to the real, current status of 5G deployment and likely future deployment, including an objective review of the economics associated with 5G.

5G refers to a set of international standards for a new (5th) generation of mobile communications service. It is intended to ultimately replace the service currently available in most of the US - 4G LTE. It is designed to be much faster (maybe up to 100 times as fast as 4G LTE) in terms of download or upload speeds. Data reception is anticipated to have much lower latency (time spent in transmission) so that the data is in very near real-time - close to zero lag.

This added speed is excellent, and it is often a discussion topic, but it is not the real objective of 5G. The aim is to provide higher capacity on the mobile networks. Higher capacity for data and voice, but mostly for video. Why the need for added traffic capacity? Simple: Cisco is now estimating that the compound annual growth rate of mobile traffic through 2022 is 36%! The 4G-LTE networks are already nearing capacity in large cities, and yet are facing this impossible growth curve. 5G is the answer to provide a vast new ability to meet this growing demand. All the other rationales for 5G are dreams; this is the driving reason.

The first question mostly ignored is the cost. There are many estimates available for 5G full deployment (small cells, mmWave) in the US. Early (2017) estimates were from $28 to $36 Billion for five years. Newer estimates now suggest that the cost over seven years would be as much as $275 Billion and that the fiber alone needed for deploying the small cells would be as much as $130 to 150 Billion. For a reference point, $275 Billion would be well over ten times the total AT&T 2019 Capital Budget! A current study takes a different approach to the cost question and estimates that the total cost of ownership (TOC - includes maintenance, capital, and all fees) could increase for the mobile networks by as much as 300%!

These are big numbers and they suggest that may be the technical hype is running away from the reality. A sudden conversion to a fully developed 5G large metro island, as is depicted in the many beautiful drawings, would be prohibitively expensive without some new services that would help, substantially, pay the bills. The question is, what new services pay for this? Alternatively, where are the added customers who pick up this big tab?

Report Coverage

This comprehensive report is going to consider these issues and ultimately suggest the likely scenario for 5G deployment and associated five-year expenditures in US. It moves into a discussion of 5G from many viewpoints, including objectives, frequency plans, architecture, and a listing and analysis of the vendors involved in the various parts of 5G infrastructure - phones, radios, and chipsets.

The report includes a discussion of the recent purchase by Apple of Intel 5G assets, and the recent Department of Justice approval of the T-Mobile/Sprint merger. Included is the analysis of the implications of 5G deployment of each of these current legal events. The report presents, in detail, IoT, and Autonomous Vehicles as two possible use cases often mentioned for 5G. It also examines the possibility of much higher levels of competition for high-speed Internet (and other fixed services) enabled through 5G fixed wireless. The final main section of the report deals with specific forecasts for 5G in the US and the impact of those forecasts on overall network requirements.

The forecasts include the deployment scenario and associated timeline and estimated capital expenditures as well as:
  • US Traffic - Total and Mobile
  • US Mobile Carriers Forecast Growth
  • 5G Phones Availability and Sources
  • IoT 5G Impact
  • Autonomous Vehicles 5G Impact
  • Over Build/ Cross Boundary Forecast
  • US 5G Penetration Forecast by Major Service
  • 5G Overall likely implementation plan and timeline

Appendixes provide details of the possible use cases and discuss the history of cellular development in the US. They also describe how the world has moved along the path from one generation to the next. For reference, they also include various data and traffic issues.

Click here to read the full report.

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