Pushing the 5G envelope: Is being first worth the risk?

Sue Marek

BARCELONA, Spain -- As I wrap up my fourth day of meetings, press events and booth visits at Mobile World Congress 2016, one very obvious theme has emerged -- the push for some operators to deploy what many are calling "pre-5G" gear by late 2017 or early 2018, well in advance of the previously projected date of 2020.

Nearly every vendor and operator has a 5G story to tell here at MWC whether it's to tout an upcoming 5G test (T-Mobile U.S.), provide a little more color on planned testing (AT&T), or to brag about early test results (Verizon).

Verizon (NYSE: VZ) makes no bones about the fact that it is in the 5G game to win the race. The carrier announced that it expects to have some commercial 5G devices in consumers' hands by late 2017 and it's working with several Asian operators, including KT, NTT DoCoMo and SK Telecom through a newly formed 5G Open Trial Specification Alliance. The goal of the Alliance is to share 5G trial information among the operators. A further goal is to help speed along standards development and achieve economies of scale when it comes time to get 5G equipment and devices.

But nearly everyone that is involved in the 5G standards process says that it will likely be 2018 before pre-standard gear is available and if the 5G standard isn't developed until 2018, it will surely be 2019 before standardized equipment is available for deployment. With that in mind, most experts say that Verizon will likely end up deploying a pre-standard 5G network.

Is that a risk? Perhaps. Although Verizon's 5G vendors say it's likely that any pre-5G gear will be upgradeable with software, others say that there's a risk that it won't be upgradeable. And some argue that even a slight risk is too much. No one wants incompatible gear or a network full of glitches -- particularly in the hyper-competitive U.S. market where network quality is constantly being measured and marketed.

"I think the danger in 5G is that if we don't come together and agree on a standard, that can create fragmentation," said Tom Keathley, AT&T's (NYSE: T) SVP of network architecture and design, during a luncheon panel I hosted at Mobile World Congress on the topic of 5G.

But Verizon executives are confident that being first is not only do-able, but also necessary. "We don't want to wait for 2020, or even 2018. And we don't think we need to…. We don't think we're going out on some crazy limb here," said Adam Koeppe, Verizon's VP of network technology and planning.

Why is Verizon in such a rush? According to Koeppe, the reason is obvious. Operators need new revenue streams. And the exciting new "use cases" promised by 5G, like the Internet of Everything, smart cities capabilities and even autonomous cars, all promise some very compelling services that will add to the operators' bottom line.

Koeppe isn't the only one seeing dollar signs in 5G.

"5G is necessary for the industrial Internet," said Arun Bansal, SVP and head of Ericsson's Radio Division, in an interview. With Ericsson forecasting 28 billion connected devices by 2020, Bansal said that the only way all those billions of devices will get connected is if operators push the envelope on 5G. "Developed countries need this to increase GDP and 5G is the technology for industrial Internet." --Sue