When will we see 5G? Conventional wisdom says 2019-2020, but it may be 2023-2025 before it materializes.
Meanwhile, there’re breathless updates in the media while vendors and operators try to leverage the 5G limelight at conferences. According to operators across Asia Pacific, 5G will be big in developed countries such as South Korea and Japan and also in developing countries such as China and India.
In countries ahead of the 5G pack in Asia Pacific, 5G benefits from local government support coupled with local demand (or potential demand) for 5G services. Motivation for governments and industry regulators to push for faster internet speeds via 5G: economic growth, and digital economy transformation.
Operators have a different perspective. They see saturated markets, increased competition, and declining revenues and/or profitability-especially from traditional core services. These operators are under pressure to seek cost-reductions and revenue streams derived from innovative new services. They see a fundamental shift in communication network architectures with 5G that will speed transition to distributed, cloud-native networks which leverage NFV, SDN and MEC.
As 5G offers latency below 1ms and larger bandwidths, mobile networks can gain an edge over fiber networks and regain competitiveness. However, justifying the investment case for 5G isn’t easy, and is even more difficult if the operator is in the developing world where demand for 5G services is low.
Another key issue: fitting 5G efficiently into operators’ existing networks (2G/3G/4G) and services portfolio while managing the necessary customer migration. 5G will require operators to implement site diversification and more efficient use of network assets like spectrum. Operators in developing countries may need to share spectrum and network in order to launch 5G, and regulators may mandate this in order to introduce 5G to their markets earlier. Some operators may go a step further and even divest their network altogether to focus on services.
5G will drive internet speeds up and data costs down, the entire industry will transform, and new industries will emerge. That’s all good, but are operators really considering the feasibility of an individual approach to 5G? Maybe a combined approach is the way forward.
Quah Mei Lee is an industry principal at Frost & Sullivan