5G is Going to be Really, Really Different Than 4G
It is the eve of 5G. Over the next several months, all major U.S. operators will launch some flavor of 5G (Verizon has already quietly rolled out fixed wireless access in select neighborhoods in four cities). During 2019, we’ll also see some limited rollouts in South Korea, Japan, possibly China and possibly a couple of countries in Europe. You’ve all seen the hyperbole from one industry analyst or wireless trade organization or another – 5G will contribute X trillion to the economy, create X million jobs, catalyze entire new industries such as autonomous vehicles, and perhaps cure cancer while doing wireless remote surgery. While I’m optimistic about the prospects for 5G in the longer term, I think we’re in a particular period of pre-5G hype cycle, where a dose of reality is needed. A key to understand is that it’s going to be very, very different than 4G.
First, a bit of history. 4G was really all about mobile broadband. 2G allowed for very basic data, and some services such as text messaging. 3G revolved around e-mail, limited web access, and some rudimentary applications/content such as ringtones and games, where operators were really the kings of the hill. But the beauty of LTE, especially after a couple of iterations when one could count on getting 10 MB or better in most locations, was that it allowed for the near replication of the home or office broadband experience, with the beauty of mobility. It also unleashed a wave of innovative applications that leveraged mobile broadband with some of the unique aspects of the phone, such as ‘always with you/always on’, location, and so on. Uber wouldn’t exist without 4G, and companies such as Facebook and Google would be shells of their highly valued and very profitable selves.
But it’s going to be hard to justify the $150+ billion in planned investment in 5G over the next five years in the U.S. (spectrum plus capex) if it’s just a faster, better, more spectrally efficient version of 4G. Let’s face it: a typical 4G connection today (and the average is about 20-30 Mbps) allows you to do pretty much anything you would want to do on a mobile device. And the LTE roadmap in and of itself is highly compelling, with the kitchen sink of carrier aggregation/LAA/CBRS/MIMO/256 QAM firing on all cylinders. The gating issues, really, are coverage, congestion, and economics (throttling typically kicks in at 20-30 GB of usage/month).
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