Wade4Wireless

Is 5G a Failure?


This question keeps coming up and I am here to say, of course not. Not today anyway, in 7 years, then it may turn out that way. Remember when we loved 4G? We loved it until we didn’t. Then it had to be replaced.  

Was 5G a win? It all depends where you are in the ecosystem. There is no 5G use case that makes us stand up and say “yes, yes, yes, yes!”. At least not today. 

What we should do is look at the progression of 5G throughout the industry.

  1. Connecting the dots reveals that without 5G we could not have gotten more spectrum so easily from the FCC. 
  2. Without more spectrum the carriers could not have increased throughput. Let’s face it, bandwidth sucked. 
  3. Without more bandwidth [and lower latency], we couldn’t have offloaded to the Edge and Cloud so efficiently. (FYI – we were doing that in 4G.)
  4. More spectrum means better backhaul, more fiber, and upgrading the network equipment.
  5. More spectrum means more equipment on the towers. 
  6. Offloading to the Edge and Cloud means more data centers. 
  7. More data centers and tower site upgrades mean more networking equipment.
  8. More data centers and networking equipment at the sites means more fiber everywhere. 

I think many people don’t connect the dots. I saw the dominoes fall in this order. 

Today when people look at this, they see no 5G specific use case. You know, I didn’t see one for Wi-Fi until they put it in every device on earth. Now we can’t live without it. Just like the internet, we didn’t know about it and now we can’t live without it. 

Don’t oversimplify the progress that was made in the past 4 years. 

Let’s break it down.

Winners are:

  • OEMs – made a mint! Nokia, Ericsson, Samsung, Huawei, and the list goes on. Winners.
  • Device makers – made a killing! Apple, Google, and Samsung sold a lot of devices. Winners!
  • Carriers – in the US AT&T, T-Mobile, and Verizon had all new marketing platforms and invested billions to upgrade. They would’ve had to do it anyway, but this forced them. They also pushed the FCC to release new spectrum, which was required for them to offer more bandwidth and new services. Winner but paid heavily for spectrum, services, and hardware. Definitely spent their way to success.
  • Tower companies – made a lot of money that will continue to pay off for the next 10 years with this equipment on their tower. I would even say 20 years. Winners!
  • Data Centers – with the increased bandwidth and throughput, remote data centers for Cloud and Edge flourished. Winner!
  • Fiber providers and suppliers – they got so much work adding and upgrading fiber to the tower, premises, and so on. Winners.
  • Network equipment providers – made a lot when the sites, core, and backhaul had to be upgraded. Winners!
  • MVNOs – because they have something new to sell, this includes cable companies and many others. Many stand alone MVNOs are being bought by the carriers they ride on for lots of money. Winners. 
  • New services – we will see a rise in “As A Service” apps and companies pop up because now there is so much available due to the upgrades in our devices. Think of the new businesses that will pop up because of this. Winner! 

Losers are:

  • Cable companies and WISPs – they are losing a lot of customers in urban and suburban areas because of FWA. Technically we didn’t need 5G for FWA, LTE was just fine. But the perception outside of the industry is that we did. Losers.
  • Smaller OEMs – they could not keep up with the larger OEMs and had to merge. Although Nokia sold a lot of gear, they lost market share in the US market. FYI – US margins are the highest in the world. Losers.
  • Device makers – suddenly they had to upgrade to 5G and add a lot of services or they would fall behind. Sure, we saw some competitors to Apple, Google, and Samsung when simple phones came out, but they are dwindling. Losers.

As for a 5G specific use case, I don’t think we’ll see it for some time. I never saw any 5G killer app. 

The new things we can do were enabled by the dream of 5G, but the use case where we need 5G has not been proven, yet. 

I know there is a lot of talk about 5G RedCap and IOT services. That all sounds good, but we’re asking the device makers to update to 5G when they just updated to 4G. 

Upgrades are harder to justify when you are selling something for under $100. In fact, it sucks. That’s why LoRaWAN and satellites are still first choices in IOT.

We have to be practical here. 

Also, for the private 5G networks, they take time and energy to sell to smaller customers. Again, larger OEMs are not equipped to handle a long sales cycle for someone buying less than 30 radios. They need to offload to resellers and let the regional teams do their magic. 

I really thought the time of large OEM dominance was coming to an end, but it may be another 20 years. OpenRAN was supposed to democratize the RAN market. Yet, Ericsson locked in AT&T as the sole provider. 

Fujitsu and Samsung appear to be the first truly OpenRAN radios out there. Yet, who do they work with?

The Cloud cores will eventually push out other cores, or at least give them a run for their money. If you have IOT, the Cloud core providers make a lot of sense. 

I am impressed how Microsoft Azure won the AT&T core business. 

So how long until we see more and more of these services offloaded? How long until the carriers offload much of their infrastructure to others?

We already see wireless connections as a commodity. They need to become more efficient to overcome the margin hits they will take over the next 10 years. 

So there is no use case specifically for 5G. That has me asking, was 5G a success? 

I would bet in 7 years we’ll all be looking back and say no!

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