Network Architecture Changes Explain why 5G is More Expensive than 4G

One often hears it said that 5G networks are more expensive than 4G networks, which are in turn more expensive than 3G networks. It is likely an accurate observation, but might be explained quite simply by changes in network architecture requiring use of smaller cells. 

And the simple reality is that networks with smaller cells require many more cell sites. The general rule is that shrinking the cell radius by 50 percent requires four times the total number of radio sites. 

And one might argue that, overall, cell sizes are getting smaller.

Network Generation	Typical Macrocell Radius
3G	1 - 5 miles
4G	0.5 - 3 miles
5G	0.25 - 1 mile

And that has clear implications for mobile network costs, as many more cell sites must be supported to accommodate the physical characteristics of radio frequencies in higher ranges that do not travel as far as frequencies in the lower ranges. 

Frequency Band	Frequency Range	Typical Propagation Distance
Low-Band	600-850 MHz	Up to 25 miles (40 km)
Mid-Band	1-3 GHz	1 to 12 miles (1.6-19 km)
C-Band	3.7 GHz	0.17 * Low-Band range
High-Band	24-47 GHz	50 to 2,000 feet (15-600 m)

So, if for no other reason that sheer number of radio sites, mobile networks using the newer frequencies--which do not travel as far as signals in the lower bands--are required to build more cell sizes. 

And even if those smaller cell sites are not always as expensive as macrocell sites once used, there are simply so many more sites to support. 5G networks, which use higher frequencies, can require 15 to 20 sites per square kilometer in urban areas, compared to only two to five sites for 4G networks using lower-frequency signals. 

The other issue is that indoor coverage becomes more difficult as frequencies increase. And that can add capex or opex cost as well. 5G indoor solutions can cost more than double that of legacy 4G-only indoor solutions. And costs three to 10 times higher are also possible.