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5G: Hype Vs Reality? Did You Mention Business Case…

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5G: Hype Vs Reality? Did You Mention Business Case…

Two very interesting write-ups recently threaten to take the lid off 5G hype. First, is the interview of British Telecom Chief Executive Officer, Gavin Patterson.

In a candid interview with Mobile World Live, he says, “I talk to other CEOs around the world in this space, and we’ve all been struggling a little bit making the business case work. If you look from 3G to 4G, the case was underpinned by going from what was a pretty poor internet experience to one which was really opening up the potential of the internet to mobile. And we haven’t found that yet for 5G.”

The other is the interview of Nick Watson, Vice President for EMEA at Ruckus Wireless. In an interview with Total Telecom, he says, “If I can provide you with cellular coverage, even within a well-insulated building, with a very high-quality LTE connection, and if I can seamlessly connect that with an ultra-high speed WiFi connection, do I really need 5G?” He further questions the relevance of 5G in the developing markets.

They are not the only ones. As the industry moves closer to 5G launch there is an increasing discomfort among the players that the business model is not very clear. Many believe that 4G and WiFi are enough to take care of data connectivity needs and there is no requirement of 5G.

Hype is real!! 

The hype around 5G has reached a crescendo. Service providers, from KDDI to SK Telecom to Deutsche Telekom, make announcements every other day to showcase progress in 5G technology. First field trial, first pilot deployment in the region, demonstration of Multiple-In-Multiple-Out, demo of 5G connected car are just some of the announcements which the industry makes every day. Some operators are looking at launching 5G services by the end of 2018 or 2019.

Of course, new figures (each bigger than the previous one) of possible 5G marketsize can be enough to lull one in thinking that 5G is the panacea of all that ails the world. All this, even as the 5G technology is yet to be standardized. (See: Here’s your guide to latest 5G developments…)

However, increasingly, as the two interviews mentioned earlier highlight, some are questioning the business model of 5G. A key issue is whether huge investment required to upgrade and modernize the networks for 5G promise return.

The 5G use cases which have emerged over the last few months are in industrial applications, connected devices or machine-type communications and in the mission-critical segment. Possibly the biggest opportunities are in industrial applications, especially in connected cars and healthcare segment. At the same time, most of the use cases are possible with 4G or LTE-Advanced. Experts believe that there is little that 5G can accomplish that 4G can’t. It is questionable whether the revenue streams are going to be big enough for the telcos…

The global industry will do well to temper its enthusiasm for 5G. It is possible that the service providers might make a huge investment in 5G and the return might be a few years away.

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