5G: A Broadband Medium

A Fixed-Line Alternative

Two of the US carriers, AT&T and Verizon, say they will use 5G to supply a “fixed” residential broadband service, as an alternative to DSL, cable-modem, satellites, etc. Verizon plans to introduce such fixed service in four cities in 2018. AT&T has announced 5G plans for 12 cities, initially supporting mobile services, but it has said it will offer a “fixed” or residential broadband service in 2019. For fixed services, the plans take advantage of 5G’s bandwidth – its upload and download bit rates – without needing the more complex functions of mobility. The data rates shown in the table of “Timing and key characteristics…” are competitive with most residential broadband services based on DSL or cable-modem services.

In fact, 5G could prove a cost-effective alternative for fixed broadband in some communities, because it can provide high bit rates without the cost of installing fibre all the way to the customer’s premises. In such fixed-broadband installations, the 5G “air interface” may be a substitute for drop cables – either twisted-pair copper or fibre. The antenna may be “fed” by fibre, similar to the use of fibre to feed DSLAM units in fibre-to-the-node (FTTN) plus VDSL configurations.

Bridging the Digital Divide

In many countries including advanced economies such as Canada, the US, the UK, and others in Europe, government agencies are concerned with the number of homes that do not have access to high-speed Internet service or to fixed broadband services. These homes often are in rural areas or small communities, where it costs more per home to build broadband networks. In the US, there are also similar problems with broadband coverage in some low-income neighborhoods, where a smaller number of likely subscribers makes it less attractive for the carriers to build broadband networks.

Thus, it is reasonable to ask about the potential use of 5G to reduce the number of homes without broadband service – to reduce the so-called “digital divide” – in some rural and lower-income communities. The answer is that the cost-effectiveness of 5G in such cases probably depends on local construction and cost factors:

  • the availability of spectrum and the cost of spectrum licenses,
  • whether the potential serving areas are “cell ready,” with suitable sites available to place the antennas (utility poles, street lights) and whether there are fibre lines already installed to feed the 5G antenna sites;
  • if there are no fibre lines available, are there options for alternative back-haul technologies, such as microwave or millimetre-wave spectrum licenses;
  • whether there is a business case for 5G mobile applications along with the fixed broadband applications;

In developing economies, it may be more practical for government authorities to consider 4G technology rather than 5G technology for delivering broadband services to un-served or under-served areas. Using 4G may be more cost-effective in some rural and-low income areas. For advanced markets, where carriers already have plans for 5G, there may be greater likelihood that 5G will be cost-effective in carrying fixed-broadband services in some neighborhoods. In either case, cellular technology may become more important in the future in extending broadband services to rural areas, both in advanced and developing markets.


Mobile vs. Fixed for Voice

Looking back to the 1990s, the number of fixed voice lines in service was rising steadily in both advanced and developing economies. By 2000, the carriers in the advanced economies had covered most of their serving areas, and the demand for cable to support new construction was diminishing. In 2000, for example, the number of fixed lines per 100 population in advanced economies was 55. This proved to be the peak year. After 2000, customers began cancelling their fixed-network voice lines. Some were cancelled because the Internet meant lines for FAX machines were no longer needed. Others were cancelled because customers saw no reason to pay for both fixed and mobile services.

The voice-network coverage in developing economies, on the other hand, was sparser. In 2000, the number of fixed lines per 100 population in developing economies was eight. But unlike the advanced economies, this number continued to rise for another seven years. The number reached a peak of 13 in 2007 and then began decreasing. As in advanced economies, some customers abandoned fixed-line service to rely entirely on mobile service. Also in the developing markets, cellular service meant that many carriers had no reason to extend fixed-line network coverage to many areas outside the metropolitan centres. For these reasons, the ramp-up of 1G, 2G, and 3G mobile technology clearly displaced some of the potential available market for copper telecom cable.

Mobile vs. Fixed Broadband

Now, about 20 years later, we might ask whether the ramp up of 4G and 5G mobile broadband technologies may displace the potential available market for some fibre optic or coaxial cable in fixed broadband networks. The answer is yes, maybe some optical cable will be displacecd, but not a vast amount. To explain: the use of 4G and 5G for broadband access still requires fibre for “feeding” the antenna sites, or for “backhaul.” If 5G is to be installed for residential broadband service, the antenna sites will need to be closely spaced – possibly only 500 metres apart. In this case, the use of 5G will eliminate the need for drop cables, but the carriers will still need to have fibre for feeder and distribution lines.

In developing economies, carriers may be more likely to use 4G for broadband services in the next three to five years. And 4G networks will require less fibre than 5G, because the antennas can be spaced further apart – possibly five to ten kilometres in rural or lower density communities. Thus it is possible that 4G mobile broadband technology could displace some of the potential market for optical cable. On the other hand, this market has been moving slowly, and the expansion of 4G could stimulate some demand for fibre in backhaul.