5G: Hype migrates to facts.
5G has been a hype machine. And so complex that few can truly distinguish reality from fiction. Appledore have recently blogged on Is the Bloom Off the 5G Rose?; this series of three blogs expands based on learnings from MWC-A, Los Angeles.
It’s not that 5G is without merits. It is potentially fast, reliable and low latency. But these gifts come with some serious conditions. Looking this gift horse in the mouth, we see that that speed and capacity comes with the baggage of millimeter waves, which means small cells, site acquisition, back-haul, trenching, etc. Cost and time.
Millimeter waves: The technology that giveth, taketh away:
In the lower spectrum, cells are bigger and therefore these costs are reduced. But so is capacity, speed, and latency increases (after all, latency is fundamentally 1/speed). Appledore has thus argued that any discussion of 5G revenues must begin with specific use cases, customer sets, SLA requirements, and associated willingness to pay. Will they pay for all those cells? Must those cells be in-factory (and thus private)?
We’re finally beginning to see practical considerations. Nokia‘s CTO for the Americas gave assembled analysts a very good look 5G evolution, current build-outs, challenges, speeds/feeds and entertained sober discussions of cost. On different but related topics, Amdocs discussed both the need for, and solutions to new revenue models in 5G, and Ericsson and ABB provided good analyses of the timing and reality of the industrial automation opportunity (which Nokia has also been a huge advocate of_ – and most importantly, the fact that it is almost entirely a private 5G (and in the interim, LTE) opportunity. We will explore these in more detail in upcoming blogs.
MWC-A Los Angeles (2019) – A focused mobile venue, but precariously on the edge
Unlike its big brother in Barcelona, which has become the “all telecom” show. MWC-A is still mobile, and still “A for Americas”. It’s about the evolution of cellular from Alaska to Chile. SDN and SD-WAN, along with NFV/Cloud, which are everywhere in Barcelona, were relatively downplayed – discussed only in the context of mobile edge, VRAN and the like – where they are very important. What was apparent from the show was that 5G is happening. Yes, 5G is happening more slowly, in use-case pockets (Fixed, urban densification, some low/mid capacity evolution). The positive spin, as we recently blogged, is that 5G may be the slow burn that delivers years of modest revenues, rather than burning brightly, then burning out. And the industry seems to have moved from unbridled optimism, to realistic planning. In terms of MWC-A’s show’s future health, crowds were clearly low, although many booth-holders reported good senior level meetings. That’s great, but the value proposition must be there for large booths or the show’s economics will unravel, and the show will spiral back to its CTIA condition – antennas, devices, trucks and cellular trinkets. I hope that does not occur; MWC-A can play a critical role in advancing the conversation about everything from 5G’s economics, to the necessary automation and operations, and the business/revenue models that must be understood and systematized in software. Are you listening CTIA-GSMA? You are at a critical junction. Ensure the value proposition for exhibitors, and deepen the factual discussion.