Thursday, November 2, 2023

Problem: 5G Cost More than 4G; 6G Will Cost More than 5G

By some estimates, the cost of 4G and 5G networks has gotten more expensive, and 6G is expected to be more expensive than 6G. 


There are several reasons, including the cost of new spectrum; the need for greater numbers of small cells, each supported by optical fiber connectivity; the cost of more-complicated radios; perhaps higher-cost engineering and higher site acquisition costs. 


Technology

Cost per location

Cost per square mile

4G

$10,000-$50,000

$500,000-$2,500,000

5G

$25,000-$100,000

$1,250,000-$5,000,000

6G (estimated)

$50,000-$200,000

$2,500,000-$10,000,000


All of that drives mobile operator concern about the business model for 5G and 6G. Some of that concern is about revenue, but much of the issue is the ever-higher need for capacity. 


By general agreement, mobile operator capacity gains have historically been driven by use of smaller cells (network densification) and allocation of additional spectrum. But most observers would tend to agree that denser architectures have contributed the most. 


In addition to use of smaller cells and additional spectrum, Wi-Fi offload, better radio technologies and modulation techniques also have contributed. And the mix of contributors arguably has changed over time. For example, Wi-Fi offload was not a factor for 2G networks.


In the 4G and 5G era, Wi-Fi offload might represent as much as 75 percent of mobile device data (principally internet access), but rarely less than 45 percent of total mobile internet data. 


Country

Percentage of mobile phone traffic offloaded to Wi-Fi

United States

60%

China

70%

India

50%

Japan

65%

South Korea

75%

United Kingdom

55%

Germany

60%

France

50%

Brazil

45%

Russia

55%


As mobile executives resist the ever-growing amount of capital they must spend to increase capacity, data offload might be one of the most-fruitful ways to add effective capacity while containing capital investment, at least to a point.


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