Three different vendors this year have presented 5G research claiming economic benefits of the technology in the hundreds-of-billions to trillions-of-dollars range. Of course, all three 5G economic studies come with giant assumptions. Assumptions that make me very skeptical of the findings.
My skepticism doesn’t diminish when talking to mobile operators. In fact, recent conversations make it worse. My discussions with mobile operators on how they plan to use 5G and the value of the technology usually garner three responses. First response is basically repeating generic use cases for IoT, enhanced mobile broadband, and low-latency communications. The second response is “I don’t know, can you tell me.” And, the third is “not really sure there is one.” None of these responses match up to the hundred-of-billions-of-dollars range enthusiasm seen from potential 5G vendors.
Skepticism is a natural industry analyst byproduct. After several years of seeing vendor-driven hype manifest into very different market realities, doubting vendor hype is only natural. It also must be fought. I know when looking back to the pre-LTE days there was skepticism around LTE value. I certainly had my doubts about some early LTE claims. While I am sure not all those claims have played out, LTE is, beyond a doubt, a very successful technology. And, this brings me back to my 5G challenge.
It is very easy to say why 5G won’t be successful, or as successful as some claim. One can also say there is no need for 5G as much of what it promises can be done to a degree with LTE. But, don’t forget HSPA+ could support 84Mbps, but that didn’t stop LTE. The use case and success factors for 5G will only appear after 5G has been around for a few years and the 5G NR and new core network have been fully standardized and 5G features are commercialized.
Currently I don’t see how mobile operators will be able to charge consumers more for a faster smartphone connection. There are operational benefits to more efficiently handling consumer mobile broadband data, but translating that into revenues is difficult. New revenues will require new services and business models. The enterprise market seems like a much better place to find revenue opportunities. Within the enterprise space I see low latency and network slicing giving operators some of the tools needed to provide those new services and business models. But, again these assumptions around 5G enterprise opportunity won’t be fully tested until networks deploy.
So, this brings me back to my original thought around 5G skepticism. It is very easy to be suspicious about the early claims regarding the benefits of 5G. Most likely many of those claims will turn out false. On the other hand, one can’t be so quick to flat out discount 5G’s potential. Being skeptical is just too easy to do, and I know in the past my skepticism has led me to too easily discount the potential of an emerging technology.
Daryl Schoolar is Principal Analyst of Wireless Infrastructure for Ovum. Daryl's research includes not only what infrastructure vendors are developing in those areas, but how mobile operators are deploying and using those wireless networking solutions. Contact him at daryl.schoolar[email protected] and follow him at @DHSchoolar.