Editor's Corner—Lower costs, increased capacity will be key to success for 5G

From left, analysts Monica Paolini, Iain Gillott, Joe Madden and Mark Lowenstein speak at FierceWireless's NextGen Wireless Network Summit in Dallas earlier this week.
Colin Gibbs Editor's Corner

DALLAS—The promise of 5G conjures all kinds of space-age use-case scenarios, from autonomous cars to augmented reality to remote surgeries directed by doctors hundreds—or thousands—of miles away.

But success of next-generation networks will hinge on two more familiar factors, according to analysts at this week’s FierceWireless NextGen Wireless Network Summit: increased capacity and lower costs.

While earlier generational evolutions of wireless networks were relatively clearly defined, 5G will comprise a wide variety of technologies and features, some of which are already being deployed. But just like the last couple of generational transitions, the move to 5G will be all about how carriers can move more data at higher speeds to more users than ever—and at a lower cost per bit than was possible before.

And the success of 5G will be critical for carriers, of course, which are already investing millions in their networks to prepare for a predicted surge in data consumption.

“5G is only going to succeed if it is cheaper than 4G (per bit),” said Monica Paolini of Senza Fili here at the FierceWireless Next-Gen Wireless Networks Summit this week. “At some point it will make sense to move from 4G to 5G … It just seems like it’s a natural progression.”

The cost of delivering data has increased significantly for operators, of course, as demand for on-the-go content and services has soared. And much of that has to do with mobile video: Mobile video traffic accounted for 60% of total mobile data traffic in 2016, according to data from Cisco, and the company predicts 78% of the world’s mobile data traffic will be video by 2021.

That alone is sufficient motivation for carriers to invest in technologies beyond 4G, said Mark Lowenstein, managing director analyst at Mobile Ecosystem.

“I’m really not sure we need a specific business case for 5G,” Lowenstein said at the conference. “I think one really driving force for 5G is economics. The growth of video scares the bejesus out of carriers. They cannot (accommodate) the growth of video; they’re not going to be able to accommodate household spend … The winning case for 5G is significantly increased economics. If you’re able to achieve that with 5G, then I think everything else will flow.”

Carriers are outspoken about their eagerness to deploy 5G, of course, and there’s no doubt that multiple 5G networks will be rolled out nationwide in the next few years. One looming question, though, is whether those networks will actually be built ahead of demand for increased capacity instead of simply keeping pace with it, according to Joe Madden of Mobile Experts. While some densely populated markets around the world could benefit from 5G networks today, it isn’t clear the United States needs a nationwide 5G network immediately.

“We see the density levels in places like Seoul and Shanghai, where you really need the 5G,” Madden said. “(But) I think we’re a couple of years behind Asia.”

And while video is perhaps the most obvious business model and use-case scenario for 5G, many in the industry believe that simply building out next-generation networks will lay the foundation for business models that have to be fully mapped out, employing a kind of “If you build it, they will come” strategy. Regardless, the 5G wave is already building, and those networks are coming soon, said Iain Gillott of iGR.

“I don’t think we need a catalyst for 5G,” Gillott said. “We’re going to roll out come hell or high water because there’s so much momentum behind it.” 

— Colin | @colin_gibbs