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5G still years away from dominating the market

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A promotional 5G video made by Telstra (image via YouTube).

As the rollout of fibre to the home project (FttH) remains a slow process it is no wonder that more and more people are looking towards mobile as a potential alternative.

Obviously, mobile communication has improved over recent years in providing excellent access to broadband. It has also become more affordable. At the same time, there is the hype surrounding 5G, and the public relations and media machines of the vendors involved makes you believe that this will become a real competitor to the slow-moving FttH developments.

First of all, anybody who has started to use video-based media over mobile networks seriously – beyond Facebook, YouTube and so forth – will have noticed that you will very quickly run out of the download capacity that is included in your mobile phone package and any serious video use over mobile networks will quickly run into hundreds of dollars per month.

Secondly, 5G as a viable commercial mass-market alternative might be 10 and possibly even 15 years away.

For starters, there is still not a 5G standard and this is essential for vendors to provide devices for mass markets in order to deliver an affordable device. Totally new handsets are needed to facilitate the multiple tiny antennas that are required for the device to operate over the high frequency necessary for 5G. No mass market will be achievable without a standard for such devices.

Secondly, 5G will require access to a fibre optic backbone in order to provide the affordable high-speed services that are talked about by the vendors and the mobile operators alike. Currently, in most Western economies, not much more than 50 per cent of mobile towers are currently linked to fibre optic networks.

5G could require a hundred-fold increase in mobile base stations and most of them need to be linked to a fibre optic network.

For the service to deliver the promised quality to the end-users, a fibre optic connection to the 5G base station is needed within 100 metres of the where the actual 5G users are located.

Furthermore, as soon as one starts talking about offices, public buildings and cafes, the reality is that the fibre network will need to be brought into these buildings in order to provide a reliable service. 5G has significant problems penetrating walls, foliage, water, even people. So, in order to provide 5G services in these places, multiple 5G antennas are needed within rooms to enable access to mobile services.

When comparing wireless to fibre it is also important to note that, while wireless has a very limited capacity to carry lots of data over any distance, fibre can carry enormous amounts of data over tens of kilometres. So, from a network efficiency point of view, fibre-based infrastructure will always win over wireless.

Mobile infrastructure and fibre infrastructure are both essential. It is not a case of either/or. But in the end, mobile services will just provide local access linked to a fibre optic infrastructure. In other words, the majority of infrastructure needed to deliver 5G will be based on an FttH – or at least fibre to the curb (FttC) – infrastructure.

It is obvious that for these reasons it is impossible for the industry to deliver mass-market 5G services within the short and even the medium term. A 10-year horizon for such a level of 5G penetration is far more realistic.

Surely, in relation to mobile broadband being an alternative to FttH – as is the case at the moment –mobile broadband will increase its position at the bottom end of the market, for those people with very basic broadband access requirements. At most, this might be enough for around 15% of the market.

However, the overall content requirements for "bandwidth-sucking" applications will continue in areas like entertainment, as well as in education, healthcare, business, smart cities, smart grids, smart buildings and so on.

FttH and FttC will potentially also benefit the development of 5G, depending on mobile operators being able to get affordable wholesale access to that network. It would be rather silly if the various mobile operators were also forced to bring their fibres to the curb in parallel with the fixed telcos in order to deliver 5G services.

So don’t expect a rapid development of 5G services for the mass market. 5G will most likely be installed in pockets where there is a clear business case (for a premium service) and where there is plenty of fibre available to provide a fast and reliable service.

On the other hand, 5G could also be a catalyst for the development of wholesale based FttH and FttC networks. But chances are that regulations to enable national wholesale based fibre optic networks will not be swiftly forthcoming; some of the mobile operators will not wait for that and will extend their own fibre backbone. If the latter is the case, the economic viability of fixed telco based FttH networks will even further diminish.

Paul Budde is managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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