5G is one of the hottest technologies in the industry now. 5G touts to be the technology that will be able to support all types of services for consumers, enterprise, public safety etc. Many service providers (SPs) are doing lab/field trials and some plan to launch 5G network in late 2018/early 2019.
While there is a lot of attention and optimism about 5G technology, there is concern about financial aspects of 5G. It is a fair concern, considering existing 4G technology and evolution of 4G can provide may of the services 5G can provide. Having seen the cellular industry evolve from 2G to 3G to 4G and become successful, I believe there are 5 good reasons to believe 5G will be successful as well.
Reason 1:5G will enable new services
5G has a new air interface and new core technology which are optimized to support multitude of use cases from machine to machine communication requiring low data rate to enhanced mobile broadband like 4K, 8K TVs.
5G will allow SPs to provide new services like URLCC (Ultra Reliable Low Latency Communications) services like autonomous vehicle or AR/VR that need ultra low latency that is not possible with 4G. 5G also enables SPs to use mmwave to provide very high bandwidth in Gbps per user in smaller area to provide fixed wireless type of service.
5G will provide a service based architecture with open APIs (Application Program Interface) and features like network slicing that will enable SPs, Application Providers and Industry Verticals to trial new services faster and scale services that become successful easily. At this stage, it is difficult to envision what will be killer application for 5G. But it is safe to say 5G will provide platform to provide new services needed in next decade and beyond.
Reason 2:Lower capex and opex
Wireless bandwidth demand will continue to increase as number of users increase and devices evolve from Smart Phone to new platforms like 4K/8K TVs, Connected cars, Head Mounted Displays (HMD) for Augmented Reality/Virtual Reality (AR/VR) etc.
Options for SPs are either to continue to use 4G with evolution or move to 5G technology. In my opinion investing in 5G to meet future traffic growth will be cheaper that continuing with 4G. 5G technology will help SPs reduce capex and opex through virtualization, disaggregation and automation of network. These can be done with 4G also. However, the effort needed to do it in 4G will be similar to 5G. So why not to do it with new 5G technology?
Till 4G Cellular technology used to be driven by vendors and Cellular Service Providers. With 5G there are many more players with skin in the game for 5G. For example, Governments are interested in using 5G for autonomous vehicle. Content providers like Sports leagues, Netflix, Youtube, Facebook etc. are interested in using 5G to provide their content in new platforms like Cars or HMDs. Healthcare industry, Auto industry and Manufacturers are interested in using 5G for applications like remote surgery, autonomous vehicle, automation of manufacturing etc. With such large eco-systems of players there is high chances that 5G will succeed sooner than later.
Reason 4: Market Dynamics
Market dynamics like competition, consolidation of SPs, regulations, network sharing, new partnerships etc. will have impact on 5G success. In my opinion, there will be more consolidation or partnership among SPs that will help deployment of 5G network. For example, recent announcement by T-Moile and Sprint to merge to form New T-Mobile will spur the deployment of 5G in US. In other markets, we may see more network sharing among SPs to reduce cost of 5G rollout.
Other industry players like Apple, Google, Facebook, Netflix, Amazon etc. might want partner or cooperate with SPs to put their contents like video, games or AR/VR contents closer to edge for better customer experience with 5G and might be willing to pay to SPs for such arrangements. Such additional revenue will help SPs to build 5G network sooner than later.
Reason 5:Technology life cycle
As vendors and SPs invest more and more on 5G technology, they may gradually reduce investment in 4G. At certain point in future new features and functionalities will be developed in 5G only rather than 4G. Vendors and SPs might move to 5G sooner so that they do not have to keep 2 technologies in parallel for long to reduce their Capex and Opex. So, at some point in future, all new network deployments will be 5G only. However, timeline of 5G deployment will vary in various countries and geographical areas within country and 4G networks will be there for many years as 5G is rolled gradually.
These are 5 good reasons why I believe that 5G will be successful. It is difficult to predict the timeline when it will gain critical mass in terms of new devices, no. of users, traffic volume and applications. Nevertheless, I believe that 5G will be successful sooner than later.
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