5G success, how do we quantify it?
It all depends who you’ll ask about it: Vendors (Ericsson, Nokia, Huawei, Samsung etc.), mobile network operators or end users. Let’s go into details for each category.
From vendors point of view: in order to proclaim 5G a success they’ll have to sell huge amounts of gNodeBs and their related packages (hardware, firmware and software). They have invested tens of billions of $ in R&D for 5G. The fact that they will sell equipment for few operators will not help them break even. They have to sell much more than tens of thousands of gNodeBs ; more likely they will need millions of gNodeBs sold to break even and get some profit too. That, of course, is expected to happen in time if operators will commit to 5G. There will be plenty of new releases, patches, new firmware to be upgraded on the road so vendors can make money out of it. But the idea is that vendors will not break even selling equipment only to major operators like AT&T, Verizon, T-Mobile, Softbank, KT telecom etc. It takes time for the whole world to embrace it. And time is the only thing vendors don’t have. They still have 5G R&D costs, salaries to be paid and yet no income from 5G. As a consequence, they are happy to take loans from whoever is willing to help them. Their share prices are at their minimum value. But vendors have a clear stamina and all interest to promote 5G as the mother of all technologies and to present mobile operators all kind of business plans that suggests that MNOs will make fortunes based on 5G. Which brings me to the second point of view…
From Mobile Network Operators point of view: a 5G is a success if there will be enough use cases for it. That is to say no Mobile Network Operator will pump tens of billions of $ in 5G having expectations to recover some hundreds of millions of $ in the next 5 years. It has to be better than that. Right now this is the main dilemma of Mobile Network Operators about 5G: they are not able to make a solid business plan to recover their ROI on 5G (Return on Investment) within 5 years. One will say “Yes, but look at Verizon, they have already started”. That is true but it is not nationwide, it is not 3GPP standard compliant and it’s just FWA (Fixed Wireless Access). It is yet a big question mark if it will be profitable: say 1000 users will sign with Verizon for 5G FWA. As users are spread largely all over the city and a 5G cell in mm wave is about the size of 300 meters, what Verizon will do? I don’t think they will install 1000 cells to accommodate those 1000 customers. It’s simply not profitable. Then again how they will satisfy 1000 customers widely spread? I don’t have the answer to that question. Then there is the question of cost: why would anyone subscribe to Verizon’s 300 Mbpsec with FWA at 70 $/months when Comcast offers 1 Gbpsec at 90$/month with their fiber offer? AT&T clearly mentioned they will not start a FWA business, at least not now. So the question of profitability is with a big question mark because: huge cost with spectrum acquisition, fiber deployment to every site, equipment costs, devices costs, installations costs. By the way Verizon admitted they may need to install outdoor antenna for some of their customers in order to provide them 5G mm wave coverage. I would say to more than 90% of them. We don’t have yet 5G smartphones for the end user. Which brings me to the Third point of view…
From end user point of view: 5G is a success if there’s 5G coverage everywhere, if it will be cheap, unlimited monthly quota and un-throttled bandwidth. Well, we all know that all of this together will never happen. And users will understand this too as soon as first customers will sign for 5G. However what users won’t give up is unlimited plans and at least 30-40 Mbpsec throughput. Why is that? Because they already have such kind of service in 4G plans. Why would they sign for 5G to get less than this? News will spread up quickly about 5G performance, coverage and experience. Users will think twice if to pay 1500-2000 $ for a 5G smartphone (that will likely be heavy and bulky too and may come with 2 year carrier contract) to link it to a reduced 5G coverage to get speeds of Gbpsec that they don’t need. But end users are lucky; in every country there will be at least 3 operators providing 5G services so prices will go down quickly while 5G services will improve quickly as well, hopefully.
Is there another category for which we claim 5G could be a success? Yes, there is: enterprises! Enterprises that were told stories (by both vendors and operators) about speeds of Gbpsec, with latency of less than 1 msec, with always connected cars in 5G, with 1 million devices per sqkm, 4th industrial revolution, remote surgeries and many other stories. Enterprises that all made plans about this 5G story without knowing that those 5G features will come in time, that 5G coverage will be quite limited to hotspots, here and there, that 5G msec latency will be very reduced in footprint due to 10 dB losses in link budgets for URLLC, that those 1 million devices per sqkm won’t be present 5 years from now not even in Manhattan.
5G is a complicated story with many technical, financial, marketing and social aspects. Success is depending on all of them and also depending who’s questioning the success of 5G. The success of 5G is neither white nor black, from each perspective it may have a different shade of grey .