#1 – 5G still 6+ years away, but 4G gears up
Commercial deployments of fully standardized, standalone mobile 5G technology are not expected to happen before 2019-20. Although Verizon is set to begin piloting 5G in the form of fixed wireless access (FWA) towards the end of 2017, we expect mass 5G deployments to still be at least 6 years away. Until then, Northstream predicts that operators will invest heavily in the advancement of LTE standards, rather than going all-in on 5G before it has been fully standardized.
American operators Verizon and AT&T are already heavily testing 5G deployments for both FWA and mobile applications and – in the case of Verizon – have announced an initial 5G FWA deployment for the end of 2017. South Korean operator KT has announced plans to make mobile 5G available during the February 2018 Winter Olympics. However, 3GPP specifications on 5G are not slated to be released before June 2018 and industry voices have already expressed concerns regarding the viability of pre-standardized specs and their future compatibility with eventual 3GPP standards.
Northstream predicts that the bulk of operators will continue pushing 4G technologies until 5G is fully standardized for both FWA and mobile use cases. We believe that telcos will further invest in evolving LTE-Advanced through measures such as cell densification, MIMO and carrier aggregation (in both licensed and unlicensed spectrum). The new LTE-Advanced Pro (4.5G) was standardized by 3GPP back in 2015, offering major improvements on the path from 4G to 5G.
While some 5G deployments in the form of FWA will start as early as next year, followed by mobile, non-standalone 5G after the June 2018 standardization, we expect standalone (i.e., independent of existing 4G infrastructure) mobile 5G to take more time. Such deployments will begin sometime between 2019 and 2020. Most operators will first want to make sure that the three use cases mainly associated with 5G, namely (1) massive IoT, (2) ultra-reliable communications and (3) enhanced mobile broadband (eMBB) are economically viable for them. The costs of deploying 5G will be extensive and operators will only invest in 5G technologies if and when these can offer clear benefits compared to 4G standards. Due to 5G initially being deployed on microwave bandwidths, these additional benefits will primarily only be available in densely populated areas, which is also why we expect 5G roll-outs to be confined to urban settings to implement eMBB during the first few years.
Whether widespread rollouts of 5G that will enable the other two use cases are sensible from an economic and technical perspective currently remains questionable, as 5G implementation outside of urban settings can only reasonably be accomplished on lower bands. As it is not possible to leverage equally large chunks of spectrum on those lower bands, Northstream predicts that the large wave of wide-area 5G deployments will take at least 6 more years to commence (i.e., until 2022). By then, evolutions in 5G are expected to provide clear advantages over 4G with regards to spectral efficiency. Moreover, 3G spectrum refarming will presumably start around that time, pushing 5G roll-outs on a larger scale.
The best way for an operator to prepare for 5G is to accelerate the migration from 3G to 4G evolution, from a user perspective it’s all about a holistic broadband experience rather than small pockets of 5G coverage.