First, many operators are yet to amortise their 4G assets and investments, and with 5G use cases still unclear, it remains to be seen how operators will be able to justify 5G as a viable financial concern.
Second, there are still uncertainties around how spectrum will be allocated and commercialised between countries and operators.
Furthermore, many are still stuck in ‘4G thinking’. With the move towards the cloud and the emergence of IoT use cases and massive edge computing capabilities, 5G will transform markets and herald in a whole new way of thinking about the role that operators play.
For example, one of the issues around IoT and 5G is the density of IoT devices it can support. 4G can support around 55,000 IoT sensors per square kilometre, but 5G could multiply this figure 10-fold, up to 1 million. To support this, it requires an estimated 1.5 million antennas, which is not going to happen quickly.
Many in the industry believe that these issues combined will lead to further consolidation within the market, as the current setup of a handful of major operators in each market, may not make sense in the 5G world.
At least, progress is being made on defining technical requirements and 5G standards. The Draft New Report ITU-R M [IMT-2020.TECH PERF REQ] is expected to be finally approved by ITU-R Study Group 5 at its next meeting in November 2017.
Meanwhile, 3GPP recently agreed to a work plan proposal (RP-170741) for the first 3GPP 5G New Radio (NR) specification that will be part of Release 15 – the global 5G standard. It will enable 3GPP-based large-scale trials and deployments as early as 2019, which has been brought forward from 2020.
As a result of this positivity, 28% of operators expect to deploy 5G in 2018, according the latest Ericsson 5G Readiness Survey. Over half (59%) claim to now have a clear strategy in place for 5G use cases, while 36% feel they have a clear business model. However, 50% are still working on the business model side of things, and 34% are going to sit and wait to see how it goes for competitors.
Certainly, operators are making technological headway with the development of 5G. However, the non-technical issues are likely to be the bottleneck in its rollout and commercialisation. Here at RMA, we believe that spectrum allocation may end up being the biggest inhibitor to full-scale 5G deployments in the immediate future. We wait with baited breath to see how things develop.