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Daryl Schoolar |
5G has entered full industry hot topic mode. Vendors all want some realistic way to tie their solutions to the next generation of mobile technology. 5G ready and 5G platforms were common product descriptors at Mobile World Congress. Conferences and associations (see 4G World to 5G World and 4G Americas now 5G Americas) want that 5G shine to keep interest high as well. I get it, everybody wants to be relevant and associating with 5G should keep one relevant for the next several years to come. But, here is the thing: nobody is going to be selling much 5G gear until next decade.
I just finished Ovum's annual base station revenue forecast. In the forecast I included both pre-5G gear (what Verizon is talking about deploying) and standards based post 2020 gear. It won't be until 2020 that 5G breaks the 1 percent mark as a percent of total RAN market revenues. Comparing 5G talk to 5G dollars it is pretty clear talk outweighs dollars. And, all that talk really runs the risk of creating confusion.
I continue to get asked questions about 5G that seem to assume 5G is much more mature than it really is. These are questions around specific service offerings and how operators plan to migrate their LTE networks to 5G. These questions totally ignore the fact that no spectrum has been dedicated for 5G services or even ratification of 5G standards. These questions are definitely come from people thinking 5G is a more mature market than it is, and I suspect those questions are partially attributed to the abundance of 5G talk. Let us remember it wasn't too long ago leaders in Turkey thought they should just skip LTE and go straight to 5G. This is exactly what I mean by "creating confusion".
Confusing to me also is the lack of 4.5G or LTE-Advanced Pro talk. The most prevalent LTE-Advanced Pro question I get is how did the industry come up with such an awkward name. Are operators not aware of 4.5G and its benefits, including helping to deploy technologies that will be eventually used with 5G or do they already know so much about the topic it isn't worth asking about? Given the growth in data traffic one would think the network capacity benefits of 4.5G would be obvious to mobile operators and certainly on their network roadmaps. Because of this, I tend to think the silence on 4.5G is more of a reflection of operators already being well versed in 4.5G so they don't feel the need to ask lots of questions about it.
Certainly in Ovum's RAN forecast the assumption is that there will be investments in LTE upgrades to support LTE-Advanced Pro. In fact, Ovum believes LTE investments will grow through at least 2019. And, not all of that will come from just initial network deployments. In more mature markets like the U.S., LTE RAN revenues will rely heavily on continued network upgrades, and not network deployments.
All of this gets back to the initial part of this column, 5G is more talk than money. Talk, however, doesn't pay the bills for vendors. This is why vendors need to continue to develop their stories about LTE-Advanced Pro. It isn't good enough just to show random technology advancements like cloud RAN and LTE-LAA, vendors need a more holistic story that pulls the different elements together and show how they will lead to both near-term and long-term network enhancements. Vendors have to show a full network upgrade roadmap. If not, they risk getting caught in a spending lull between initial LTE rollouts and the start of 5G.
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 [email protected] and follow him at @DHSchoolar.