Looking Ahead

Construction Timeframes

The comments from carriers and the status of field trials suggest that wide-scale 5G network deployments will not be underway until 2020 or subsequent years in most countries. In some advanced telecom markets, such as the US and China, carriers may elect to begin installing optical cable for the terrestrial infrastructure in advance of the radio-network construction.

Once 5G construction is underway, how rapidly will it progress? This will depend on several factors. Use of the non-standalone radio-access network may allow some carriers to build out their 5G networks more rapidly. Another factor may be how many customers currently are using a carrier’s 3G or 4G networks, and how many have a reason to upgrade to a 5G-based service offering. Finally, the main factors will involve the business case – whether 5G will provide access to new revenue streams. The use of 5G technology for fixed-wireless broadband services, as being pursued by Verizon in the US, may provide an initial business case for some carriers. That is, it could provide access to new customers while other 5G services and customer groups are evolving.


Is There a Race for 5G?

Most advanced economies have a competitive mobile telecom market – three or more carriers with nationwide service. In many of these cases, the available market is highly saturated. That is, all the country’s residents already have a cellular subscription. And in these markets, the carriers don’t have many options for increasing their revenues or profits. The competition has led the carriers to have similar sets of services and fees.

The ability to attract new groups of customers, such as automotive companies, or trucking fleet operators, or medical supply companies, may give carriers an incentive to offer 5G services before their competitors. In some advanced markets, the ability to offer superior video services to consumers also may spur some carriers to pursue 5G in advance of competitors.

Competition Between Countries

As 5G technology has developed, there have been comments from some journalists, government officials, and corporate executives expressing the view that it is important for a country to be an early adopter, even to achieve a leading role among world markets. But it is not clear how a leading role among countries could benefit the carriers within a country. Carriers in different countries do not compete for the same customers. They have different geographic serving areas and in fact cannot operate in another country without frequency licenses and other permits.

There may be an advantage for the equipment manufacturers (rather than carriers) to get ahead of competitors in other countries. This could affect their clout in standards committees, giving potential benefits in technology development, royalties, and market acceptance. Some publications also have mentioned national security as a possible factor in a competition between countries. But again, it’s not clear how an early adopter gets any international advantage. The main advantage of an early lead among countries may be for equipment manufacturers, who can gain early domestic experience and be better positioned to win international contracts.