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Joe Madden |
Two years ago, we published our first 5G Architecture predictions, and our first 5G business case analysis. We made the outrageous claim 16 months ago, that 5G will target fixed broadband applications first, not mobile handsets. We hit the bull's eye on that one.
We also said that we didn't expect meaningful deployment until the standards were finished in 2020. It looks like that prediction was wrong.
Our analysis goes back to basic principles, with detailed technical analysis of 28 GHz radio links and an economic business case that compares long-range tower-based 5G architectures to "small cell" architectures to identify the best deployment approach. The bottom line is that we've been predicting a very specific 5G architecture which is now rapidly coming together.
Verizon has famously announced that they'll be launching a pilot 5G service in 2017, and the target application is fixed wireless. Verizon CFO Fran Shammo has been quoted here in Fierce Wireless, saying that 5G is "not really about mobile." You can bet that other US operators will be responding, because they can't be left behind without an equivalent network option.
Think that it's just a marketing stunt? Maybe, but there's a strong chance that it will be a lot bigger than a typical "trial." Verizon has put together a plan that they can implement in the short term, without waiting for standards to bake in a four-year committee. Here's how:
1. Verizon has acquired the rights to use LMDS licenses owned by XO Communications, along with their acquisition of XO's fiberoptic network business. The FCC has a chance to shoot it down, but we believe they'll let Verizon move forward. Verizon can move quickly on 102 licenses at 28 GHz and 39 GHz, without waiting for a long auction process. They can go big if they want to, without waiting the usual two years for a nationwide auction.
2. Verizon's suppliers have already implemented "5G Ready" virtualized packet core infrastructure and virtualized baseband processing architectures. A key element here is the split-baseband concept where some processing is done in a virtualized processor in the data center, while other processing lives in the radio unit. The 28 GHz radio is new, but Nokia's underlying AirScale platform is ready for deployment next year.
3. In addition to the XO Communications fiber network, Verizon already has been investing heavily in fiber. Their wireless CAPEX has dropped a bit over the past year, but they've maintained steady investment in fiber. Today, we estimate that they are catching up with AT&T with one of the two biggest metro fiber networks in the USA.
4. Verizon has made a decision to push forward before the standards are done. There is some risk in doing this, but the main players in 3GPP have already come to an initial level of consensus on the frame structure of 5G broadband. Programmable signal processing in the radios will probably allow for an update in 2020 when the standards are fully cooked.
Of course, the radio equipment and the CPE will be new products, and these have not appeared on the market yet. We've met with vendors about this, and while we can't say anything specific about what they're doing, we can say that this project is getting very high priority attention.
We expect some challenges with radio propagation at 28 GHz, and with heat load on the radio equipment. Nobody wants to go back to air conditioners for the base station, so the 5G link will have a limited range. These are limitations, not show-stoppers for the first year. We will be making a judgment call on the impact of RF limitations on the business case over the next three months.
I didn't want to make a firm forecast for 5G until mid-2017... but now that Verizon has committed to a major project in this direction, Mobile Experts has accelerated our plans to publish a forecast. We'll have it ready for our 5G subscribers next week.
Vodafone, Telefonica and Orange are still in the locker room. AT&T and NTT DoCoMo are still lacing up their shoes. But the starter's pistol is already smoking and Verizon is sprinting.
Joe Madden is Principal Analyst at Mobile Experts LLC, a network of market and technology experts that analyze wireless markets. The team provides detailed research on Small Cell, Base Station, Carrier Wi-Fi, and IoT markets. Mr. Madden currently focuses on trends in 5G, IoT, and Enterprise markets for wireless infrastructure. Over 26 years in mobile communications, he accurately predicted the rise of Digital Predistortion, Remote Radio Heads, Small Cells, and the rise of a Mobile IT market. He validates his ideas with mobile and cable operators, as well as semiconductor suppliers to find the match between business models and technology. Mr. Madden holds a Physics degree from UCLA. Despite learning about economics at Stanford, he still obeys the laws of physics.