5G is now well established and is a big success with 2,27 billion subscriptions worldwide in 2024. While 4G presented a breakthrough in usage patterns, propelling the world into a fully digital mobile society, 5G has appeared less disruptive.
Coming back to the initial promises, 5G offered three major benefits to consumers pictured in a triangle: Ultra Low Latency Communications, Massive mobile Communication, and Enhanced Mobile Broadband. How much value has been extracted from this magic triangle?
Ultra-Reliable Low Latency Communications promises response times below 10 ms, ten times lower than usual standards.
What kind of 5G application actually requires such performance?
Telesurgery, Autonomous vehicles, but also sometimes Cloud gaming and Virtual and augmented reality have been named. But when it comes to the real world, it happens that delivering sub-10 ms latency requires dedicated, costly infrastructure on-site (core, RAN, edge), which limits the applicability to a few locations. Even when 5G is fully deployed, only some “happy few” areas will enjoy the capability: high-tech hospitals, premium recreation areas, and fully automated factories. For this reason, most applications do not rely on such performance to work well; 100ms and even above remains “good enough.”
massive Machine-Type Communications, which enables up to 1 million devices per km², hasn't been commercially deployed yet.
As opposed to smartphones, IoT (Internet of Things) modules may have a very long lifetime, some being even embedded into machines. A significant part of the ecosystem is simply not ready to switch, because changing an IoT module is very expensive. mMTC applies rather to new use cases. Having said that, we still do not know of use cases that would economically support such a density of sensors.
Enhanced mobile Broadband (emBB) is the first feature widely used
Paradoxically, the performance is not primarily linked to technology itself but more to physics: the frequency range used (3.5Ghz) offers more bandwidth capabilities. Because it relies only on 5G New Radio, and does not require migration to 5G core, emBB has been smoothly deployed along with legacy infrastructure. The 3.5 Ghz experience has, however, been disappointing in dense areas where the indoor experience could be degraded (again due to physics, as this band has a lower building penetration performance). Operators solved this by using carrier aggregation with lower frequency (such as 770mhz), offering now a better experience than that of 4G. But monetization is not granted. For the record, the other frequencies proposed for 5G which are millimeter waves at 24Ghz, have not found their market yet; lower bands are “good enough.”
Using Enhanced mobile Broadband, Fixed wireless access (FWA) appears to be the to-date 5G marketing killer.
It is somewhat paradoxical since FWA is not about new performances, but rather compensates for the unavailability of fixed infrastructure. FWA will, however, only work as a complement, a kind of “big niche market.” A FWA connection consumes as much traffic as 10 mobile handsets for the same price range and cannot therefore be a full alternative to fiber networks.
Do we have to conclude that 5G is a disillusion ?
Of course not! Probably we must build a set of new triangles for 5G monetization.
First of all, 5G is solving the major problem of mobile traffic saturation by both releasing new frequencies and being based on a radio that is more efficient than 4G (through massive MIMO and beamforming). In dense areas, 5G has saved mobile broadband from technical bankruptcy.
The second capability, which is still to come, is the integration with Non-Terrestrial Networks, including mainly satellites. This is not necessarily adherent to 5G standards but will probably be associated with the 5G generation. In the future, any standard 5G mobile phone could be able to call from anywhere on the planet.
The third capability is the disaggregation of mobile networks. It means being able to physically distribute mobile functions. It will allow new business models for wholesale (inter-operator relations), paramount to achieving economies of scale for actors struggling to invest. Active infrastructure sharing can solve the economic dilemma operators face in Europe: growing capex with stagnant revenues.
The fourth capability is the release of Application Programming Interface (API). With APIs, the network can interface in real time with third-party applications. It closes the gap between the former monoliths of telecom networks and Information Technologies. The Open Gateway initiative led by GSMA regroups a vast community of operators and aims to standardize and promote these APIs, creating a new potential digital giant. A wide range of business models can now be envisaged, which includes the use of marketplaces to sell telecom services like digital services.
The fifth feature is Slicing, which is the capability to create sub-networks at the radio level. One of the biggest applications of slicing is to manage differentiated quality of service between customers. Users of slice A have a better service than users of slice B, and pay more. Services based on slicing are coming to the market and are opening a brand-new way to value mobile connectivity.
The sixth capability is advanced automation. Automation is a consequence of the cloud computing-native architecture of 5G. Telecoms, being software-driven, can benefit from better flexibility and Artificial Intelligence to automate and optimize many tasks: network deployment, fault isolation, feature development, ….
In retrospect, the mobile industry really needed 5G to continue to support its growth ambitions, but the model is less straightforward than that of 4G. Everyone could understand 4G benefits. The initial marketing of 5G was a copy-paste of 4G's, and from this angle, it did not deliver much more to the vast public … at the surface. On the other hand, the technical concepts of 5G are breathtaking: cloudification, disaggregation, automation, …. The monetization of these capabilities is not an ARPU (Average Revenue Per User) increase of +20%; it is diluted in many adjacent value areas, which makes the business case less straightforward: digital services, automated factories, ….
In conclusion, 5G embarks on a disruptive potential that takes more time to materialize; it paves the way for the development of mobile broadband in the age of cloud and AI.
