Thursday, January 24, 2019

The 5G Killer App--Early On--is Capacity

What use cases will drive the volume in the early days of 5G? Prosaic, drop-dead-simple use cases related to internet access.

Most observers think at least some new use cases, revenue sources and business models will emerge in the 5G era, especially in the enterprise space, where most of the internet of things and ultra-low latency processes are likely will occur.

Little of that will happen for years, and volume deployment might take a decade or two (big new use cases often take that long to become ubiquitous).

So what happens at first? Early adopters buying 5G might do so because they value having internet access as much as an order of magnitude faster than the 4G they use today. Few will find they experience that big a change, and when they do, it will not be “everywhere,” but likely “some places” they routinely use their devices.

The challenge is going to be that a consumer mobile user who wants a generally-faster experience is more likely to get such an experience from the latest generation of 4G, not 5G (at first).

Keep in mind that 4G is going to get faster. If what a consumer really wants is faster speeds, then 4G is going to be a very-satisfactory solution, in many markets, offering perhaps three times to five times the speed of earlier 4G networks.


Latency performance is the other big early 5G difference, but it seems unlikely many consumers will have use cases that can take advantage of the ultra-low latency, with the exception of downloading and similar use cases. 4G latency also is improving, though.

The use of 5G as a fixed wireless platform is a form of mobile substitution where the end user value is internet access that rivals fixed network services. There are reasons for mobile service providers to use fixed wireless, though. It might lower the cost of upgrading networks to compete with cable TV operators.

That might also be true for ability to serve enterprise and smaller business as well.

The point is that the early-stage 5G enterprise apps sold in volume are probably going to be prosaic and focused: mobile substitution of fixed network data services; as well as services for workers who value faster downloads.

Other than faster speed or fixed internet access,  the early consumer use cases might be qualitatively different if mobile service providers can create and package (create tariffs and bundled offers while managing the usage caps) offers that feature mobile casting to TVs.

Of course, mobile service providers are creating their own streaming services (both linear and on-demand). Perhaps there also is some opportunity for “mobile casting” as a substitute for linear TV in a more direct sense (use the mobile as the internet connection, the service and the casting device).

But that would take some time, if it even is worth pursuing. In the near term, 5G is going to be about internet access speeds and costs, in both business-to-business and business-to-consumer market segments.

Mobile service providers also have internal reasons for deploying 5G. To keep increasing the supply of bandwidth, a shift from 4G has to be made, in any case, as 4G eventually will run out of gas.

Put another way, the killer app for 5G, early on, is capacity.

source: Nokia

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