Industry Voices—Pongratz: 5G is not all the same

Stefan Pongratz

With 5G activity accelerating across the globe and 5G NR now comprising a tangible portion of the overall wireless capex, it might be a good opportunity to assess how the various 5G deployments will differ from a capex, adoption and performance perspective. And what are the implications for marketing?

First, the required capex, expected adoption and realized performance will vary rather significantly depending on the use case. Some estimates suggest the TCO delta between eMBB networks and URLLC deployments could approach 4x. At the same time, adoption timing for the various use cases will also diverge, with eMBB projected to drive the lion share of the 5G capex over the next five years and URLLC based investments not projected to move beyond the noise until the outer part of the forecast period.

5G chart

Next, within the eMBB phase, there will be multiple 5G flavors. At a highly simplified level, we can think of 5G NR eMBB deployments in three broad spectrum categories including millimeter wave, new sub 6 GHz, and existing sub 6 GHz spectrum. In addition to the different capex requirements and performance variations for these MBB types, the RAN migration path will also vary depending on the spectrum position.

While new dynamic spectrum sharing (DSS) technologies will simplify and accelerate the transition from LTE to 5G in existing LTE spectrum with minimal incremental capex relying primarily on software upgrades, 5G MBB deployments utilizing new base station hardware are projected to dominate the 5G capex envelope over the five-year forecast period.

From a throughput perspective for MBB applications, the performance delta among the various 5G networks is expected to fluctuate depending on a confluence of factors.

Using a theoretical baseline of 75 Mbps per 10 MHz FDD 2x2 MIMO 64 QAM LTE carrier, the computed 3-sector 5G NR peak site capacity for various bandwidth and transmission configurations suggests the performance variation between the wider channel mid-band deployments utilizing Massive MIMO and low-band 4x4 configurations will be extreme. Even if we normalize for the anticipated growth disparity between theoretical peak and average throughputs, the gap will remain significant, underpinning projections that the mid-band will play an important role for the 5G eMBB use case.

5G chart 2
Source: Dell'Oro Group

With the efficiency uplift between 4G and 5G expected to be in the order of ~30%  when comparing apples-to-apples, the DSS technology is a compelling solution to maximize the use of the sub 6 GHz spectrum. And from a marketing perspective, short of just changing the LTE logo to 5G, DSS is likely the next most expeditious approach for realizing a true nationwide 5G branded network.

And even though all roads ultimately lead to 5G, it will be interesting to see if the competitive dynamics in combination with the different spectrum assets will spur operators to accelerate the use of DSS at a faster pace than technically required, just to ensure a competitive 5G marketing message.

To sum, 5G is exciting, but it is not all the same and the 5G term without additional context will do little to communicate the value for the suppliers, operators, and the end users. With LTE networks performing rather well, it is now up to marketing to decide how to capitalize on the extreme variations with all the possible 5G flavors. In other words, until mid-band spectrum is available, marketing will ultimately decide if 5G eMBB is a branding exercise or as Verizon CEO Hans Vestberg said in the second-quarter 2019 earnings call— 5G is a “transformative feeling.”

Stefan Pongratz is a senior director at the Dell’Oro Group, which provides market information about the telecommunications, networks, and data center IT industries. Mr. Pongratz joined the Dell’Oro Group in 2010 after spending 10 years with the Anritsu Company. Mr. Pongratz is responsible for the firm's Radio Access Network and Telecom Capex programs and has authored advanced research reports on the wireless market assessing the impact and the market opportunity with Small Cells, C-RAN, 5G and CBRS.

"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of the editorial board.