A new report by Analysys Mason, commissioned by Ericsson and Qualcomm, highlights potential positive economic impacts from deploying 5G millimeter wave spectrum in Europe as the companies urged action by regulators.
Specifically, the report (PDF) zeros in on the 26 GHz mmWave band and use cases for enhanced mobile broadband (eMBB) with bandwidth to handle high traffic volumes, as well as fixed wireless access, smart factories and other industrial applications focused on high-capacity, low-latency and reliability.
According to Analysys Mason, when built on top of a ‘base case’ eMBB deployment, the estimated net benefit of mmWave for each modeled use case is between five and 20-times greater than the estimated cost to roll out.
The report estimates a total GDP benefit from the aggregated use cases over the next two decades (through 2040) of EUR 141.3 billion ($172.3 billion) cumulatively, across 27 European Union member states, and Norway, Switzerland and the U.K. versus around EUR 20.8 billion ($25.4 billion) of additional cost.
“Our modelling shows that there is a significant net economic benefit to deploying 5G mmWave primarily together with 3.5 GHz, but also as dedicated cells, across a wide range of scenarios, based on a ‘base case’ eMBB network deployment,” the report concluded.
Ericsson VP and head of Government and Industry Relations Ulf Pehrsson called on European nations to provide access to mmWave to boost the market.
“Europe has indeed harmonized spectrum in the three ranges and we urge nations to release the spectrum to pick up market speed. In particular, the millimeter wave is key to deliver very high capacity in dense areas and a wide range of industrial use cases,” stated Pehrsson. “Its deployment, building on existing enhanced mobile broadband deployments, is key to bring the economy up post-Covid-19, as shown in this report.”
Janette Stewart, partner at Analysys Mason also said licensing is needed. “This study demonstrates the importance for European regulators to complete 5G licensing in all of the bands identified at an EU level,” Stewart stated.
European progress on mmWave
Europe has made moves to award lower band 700 MHz and mid-band 3.5 GHz frequencies for 5G but had less action on the 26 GHz band (24.25-27.5 GHz). The band was identified by the Radio Spectrum Policy Group and harmonized worldwide for mobile at the World Radiocommunication Conference in 2019 (WRC-19).
Legislation by the European Commission in 2018 required member states to allows the use of at least 1 GHz of the 24.25-27.5 GHz band for 5G by the end of 2020 “provided that there is clear evidence of market demand” and no significant constraints for migration or clearing.
According to the report, seven European countries have made mmWave spectrum in the 26 GHz range available so far, with more than 40% expected to award at least part of the band by the end of 2021.
Those include Denmark, Finland, Germany, Greece, Italy, Slovenia and the U.K. Spectrum awards for 26 GHz in Spain, Sweden, Croatia, Estonia and Malta are expected later this year.
The report noted that the device ecosystem for the 26/28 GHz band is still in early development, though the latter is more mature. As of Q1 there were 45 28-GHz compatible devices versus 10 for 26 GHz.
“This reflects earlier assignment of mmWave spectrum and deployment of networks in the 28 GHz band outside of Europe…However, this may change as further European markets proceed with 26 GHz licensing during 2021,” the report states.
Qualcomm’s Wassim Chourbaji, SVP of Government Affairs EMEA, said the company is encouraged to see progress in Europe on 26 GHZ, and that mmWave alongside sub-6 GHz can bring benefits but Europe is behind.
“It is clear, however, that there is much work to do to catch up with other regions around the world that are seeing the benefits of commercializing 5G mmWave services,” Chourbaji stated.
The U.S., for example, has held three millimeter wave spectrum auctions so far (though consumer coverage is still extremely limited). And 10 other non-European countries have completed mmWave auctions or assignments.
As seen in other parts of the world, Analysys Mason said that European MNOs indicated 26 GHz spectrum would be used in targeted areas with high capacity needs for 5G eMBB, while fixed wireless access is another important use case of interest.
Interestingly, MNOs suggested early deployments will target macro site upgrades versus small cells, as Europe is focused on 3.5 GHz deployments.
The authors wrote that “it is appealing to be able to deploy 26 GHz onto existing 3.5 GHz macro sites, as a capacity offload solution” but based on market demand “small-cell/street-level coverage will also be deployed” with indoor solutions expected on an as needed basis.
Because of the short-range and penetration characteristics of mmWave, the U.S. has largely seen high band spectrum deployed on small cells.
MNOs tapped for the report also emphasized the importance of contiguous blocks of mmWave, suggesting between 800 MHz and 1 GHz is needed per operator for 26 GHz deployment. The authors explained that “having non-contiguous blocks would mean multiple radios needing to be deployed, which increases deployment costs.”
mmWave for smart factories show largest economic cost and benefit
Beyond consumer-based eMBB, Analysys Mason cited industrial and enterprise deployment scenarios that require additional uplink capacity as strong areas of interest for mmWave
“There was a general view that mmWave spectrum can provide the flexibility to tailor uplink/downlink capacity at a localized level,” the authors wrote.
The report’s economic modelling aggregated across countries showed that the smart factory use case has the largest absolute cost (EUR 14 billion) and benefit (EUR 75.8 billion) for 26 GHz 5G deployment across Europe, with a cost-benefit ratio (CBR) of 5.4.
For the smart factories, it assumed a mix of architectures would be used. Some would use a public mobile network and only require one macro site upgrade per factory, involving a 3.5 GHz site equipped with 26 GHz equipment; with other factories served by six additional dedicated small cells, requiring fiber backhaul; or a single dedicated site utilizing 26 GHz infrastructure for services that aren’t shared with eMBB.
Below is how the report calculated unit costs for different network architectures, assuming 800 MHz-1GHz for 26GHz band deployment. They include small cells, macro site upgrades or dedicated sites. Spectrum costs were excluded and there was a 10% uplift to account for core network costs, along with a 3-7% price erosion for the unit cost of radio equipment as it decreases alongside ecosystem development.
Within smart factories, four features of the use cases included monitoring machinery for predictive maintenance and remote-control-reduced downtime, real-time supply chain visibility, X-reality guided processes and repairs, and UHD surveillance.
While the absolute cost and benefit for other use cases was lower– such as fixed wireless access – with a total cost of EUR 4.6 billion EUR and benefit of EUR 46.5 billion EUR – but CBR was higher at 10.1. And millimeter wave deployment scenarios for urban and suburban locations had a cost-benefit ratio of 7 “demonstrating the possibility of an even more significant return on investment for these use cases.”