5G R&D and trials investment has been projected to reach $5 Billion annually by 2020.
There isn’t really a consensus around what 5G is – but the one thing we do know is that’s it going to be much more than just ‘4g but bigger’.
Isn’t that like 4G but bigger? No. There was a nice critique published earlier this year by Joe Madden from Mobile Experts LLP. Yes, there’s a lot of interest (and growing) among the mobile industry R&D labs; 5G R&D and trials investment has been projected to reach $5 Billion annually by 2020, but a linear step up from 3G and 4G it is not. Indeed, there isn’t really a consensus around what 5G is – Massive MIMO, M2M on steroids, software defined networks, network function virtualisation, full duplex, millimetre-wave bands, multiple transports and beam forming all feature in someone’s definition of 5G. It’s likely to be all that and more. Currently, any promising tech that isn’t employed in delivering 4G/LTE seems to get lumped into 5G. At the moment things seem very ‘technology push’; perhaps we should be thinking about use cases and business models. The world’s appetite for mobile phones seems insatiable – 1.9 Billion units shipped in 2014 but the Average Revenue Per User (ARPU – the standard mobile comms metric) for 4G handsets is, by and large, no different to that for 3G. Is there really a business case for a solution that gives 10 times the download for no more revenues coming in? That will result in some rather long RoI timeframe for that $5Bn R&D plus the not inconsiderable infrastructure costs that will be incurred.
A far more sensible approach may be to consider the applications, with the value add, that exploit the singular characteristics of 5G compared to what we have now. Yes, it’s about massive (ostensibly infinite) bandwidth but also ultra-low latency and availability. We need to start thinking about the use cases and the business models behind them.
Some may think this is all a bit premature. Although some elements of it may be deployed earlier, 5G will not be used until after 2020 – spectrum licensing is not likely to start before consensus is reached leading up to WRC-2019 – and the major action is arguably in overseas markets (70% of that $5Bn trials investment will be in SE Asian and other ‘sporting’ nations). Given our major technical strengths along with a proven track record in service innovation, clearly the UK is in a strong position to take a lead on how 5G can be used – and generate value.