Politics Analysis

5G could be a game changer — or simply a 4G upgrade

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It's yet to be determined just how much of an impact 5G will make (Image via Flickr)

While advocates of 5G believe it will revolutionise computing and telecommunications, it can be argued that it will only offer a step up from current 4G, writes Paul Budde.

WE HAVE COVERED several articles about the potential of 5G being a competitor to the NBN. I have always downplayed this, but have also indicated that there certainly are new niche market opportunities of 5G. However, these will be incremental and its main development is simply replacing 4G, as it offers significant network efficiencies for the operators, especially in congested cities.

At a recent Telecommunications Society of Australia (TelSoc) presentation, 5G was discussed as a potential enhancement of the NBN. It was indicated that what we are starting to see is a convergence of mobile/wireless networks and fixed broadband networks. At the core of this convergence is that 5G is based on cloud architecture and they viewed this as a potential game-changer for the overall telecommunications industry.

Over the last 15 years, most organisations have moved from only using their own telecommunications and computer hardware to increasingly migrating their networking and computer needs to the cloud. Computing and infrastructure have become a service, from capex to opex and this, in turn, revolutionised the corporate market. The obvious benefits are that you can pay as you go, even the smallest company and individuals can use these services, “infinite” capacity on demand and very fast network provisioning services. Services such as IaaS, PaaS and SaaS are booming (Infrastructure as a Service, the P stands for Platforms and the S for software).

Advocates of 5G indicate that having its architecture built on a cloud-based structure could enhance the position of this technology in the overall telecoms market, as it could seamlessly integrate with the existing cloud facilities. This would make it possible to also use 5G technology to offer services on a demand basis based on network slicing. This allows providers to carve out multiple virtual networks, with significantly different performance characteristics, from a common physical infrastructure. Applications include private networks, edge services for IoT (Internet of Things) and OTT (Over The Top services such as apps) and private hotspots. This should be done in conjunction with edge-based data centres.

Telco manufacturers have been selling features and functionalities for decades. They sounded good in marketing blurbs but are seldom deployed in real-life operations. The market always gravitates to the least complex and least costly solution, based on the “keep it simple” (KIS) principle. I am concerned that many of the 5G features promoted by the manufacturers also fall into this category. Many of the problems these new features address or the opportunities it says it will provide can often also be achieved in other ways. 5G will most certainly offer improvements but is it really that revolutionary?

NBN Co, being a nationwide fibre network, could add 5G to the edges of the network and then allow for mobile and fixed based networks and services to be made available on a wholesale basis to RSPs and their end users.

But even if this was available, it is questionable if this provides RSPs with significant new edge offerings. In the end, they will have to get the rest of the mobile service from one of the mobile operators. It is uncertain if that will be cheaper than getting it all from a network operator in the first place. If they want, the mobile operators could make an offering from NBN Co less attractive simply through pricing.

Furthermore, 5G will for the foreseeable future only be deployed in major cities — it will not offer a nationwide service, which would be required for mass-market applications.

Optus tried to use 4G in combination with fixed broadband with femtocells and withdrew that offering in favour of WiFi. In all reality, WiFi did win that battle several years ago. It is already ubiquitous in end-user equipment. A 5G offering will be limited, is not the best technical solution and can only be provided in the rather limited 5G situations. Fixed networks with WiFi will always remain the KIS solution here. Whatever 5G’s potential or theoretical attraction is, it is highly unlikely that this will be implemented by NBN Co or the telcos on a mass-market basis.

Telcos are already using merged 5G, fixed broadband solutions, however, this is very much at a broadband access level. No exciting new services are offered, simply a fixed-wireless broadband solution.

But let’s say that 5G from a technical point of view can function as a game-changer. How will this work in the complex telecoms market with complicated policy and competition structures? Add to this the conflicting interests between the various parties involved in this ecosystem and I can’t see this happening any time soon.

TelSoc in its presentations indeed argued that 5G could be a game-changer and that it could be an important tool to create revolutionary changes in the telecoms market. But it also indicated that this would require significant policy changes. They will use the technical benefits that 5G has to offer as arguments for change.

I hope that TelSoc’s assessment of 5G as a technology and policy game-changer will be proven to be right and I will be proven wrong. It would be in the interest of the industry (and indeed of our society) if a much more holistic and collaborative approach will be taken both by the Government and the industry. And I fully support TelSoc to make this happen.

Until I see broad industry support for a more holistic telecoms market and the implementation of the new 5G technologies and applications implemented on a mass-market level, I continue to see 5G as simply being an excellent upgrade from 4G. On the technology side, the main reason why network operators are so keen on implementing 5G is because of network efficiency and extra capacity to the operators for the provision of broadband access services.

Everything else – whilst being exciting – will, in the context of the current political and competition reality, most likely only be deployed in niche market applications and will not have any significant material impact on the overall telecoms industry.

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

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