5G — Where we are compared to where we thought we’d be: Lowenstein

Mark Lowenstein

Here’s a question: How many of your friends or family have said something to the effect of, “I have a 5G phone, and I’m really noticing the difference compared to 4G,” or “I’m able to do XYZ because of 5G.” I’m guessing the answer is very few.

But here we are, in mid-2022, three years since the launch of the first 5G services in the United States. The progress report is, I would say, a mixed bag. On the one hand, 5G services are available nationwide, and we’re approaching 50 percent of U.S. subscribers owning a 5G-capable phone. On the other hand, from a user’s perspective, the game-changing speeds and capabilities of 5G that were hyped for years, have not yet materialized. And few can cite particular apps or experiences that have been enabled by 5G. So, where are we compared to where we thought we’d be, and what are some of the next major milestones?

In the United States, I think we’re ahead of where we thought we’d be in terms of how many subscribers have a 5G-enabled phone, and the frequency with which the “5G” indicator is lit on said phone. Amidst a pandemic, supply chain challenges, and all the stuff the world has thrown at us over the past few years, the deployment of sub-6 GHz band radios, and availability of phones covering the multiple additional spectrum bands, has been impressive. This achievement should not be overlooked.

That said, the industry has given itself a pretty wide berth in terms of what’s defined as 5G. Call it the HSPA-ization of 5G, for the historians among us. In the absence of a real definition of what could be called 5G, the industry sort of made the decision to make the rollout of the various flavors of mid-band spectrum (600 MHz, some bands of 700 MHz, 2.5 GHz, C-band) synonymous with the launch of “nationwide” 5G. Even further, “real 5G” – initially signified by the rollout of mmWave-based spectrum, has been diluted to include C-band (Verizon Ultra Wideband) and 2.5 GHz (T-Mobile 5G Ultra Capacity).

So what’s the experience like, from a consumer’s perspective? If one were to wind the clock back, say five years, the average speed experienced on a phone (on cellular) is probably 50% higher today. But those “5G” speeds can be about the same as a good 4G LTE connection with all cylinders firing. The improvements are really a combination of all the new capacity brought by the new spectrum available to the MNOs, carrier aggregation, and improved processing speeds on devices, and several other factors.

Some will also credit the growth in fixed wireless access (FWA) availability as one of the first “enhanced broadband access” use cases for 5G. But again, this is more enabled by the operators’ significantly improved capacity position than 5G, per se. If one looks at where FWA is available, it’s more governed by capacity than where 5G radios have been deployed.

One aspect of 5G that’s definitely in a different place than we thought we’d be is mmWave deployments. With all the mid-band spectrum purchases, it appears that mmWave has been relegated to “Super Wi-Fi” status: being used as hot spots for use case or venue-driven speed boosts or capacity improvements. mmWave coverage is a lot sparer than many thought it would be at this point. Verizon is still deploying it selectively, but it’s barely mentioned by AT&T or T-Mobile. Deployments outside the U.S. are few and far between. The handset OEMs have scaled back their commitments.

I also thought by now there would be some signature apps that would leverage some of the higher tiers of 5G speeds and lower latency capabilities. But we haven’t seen anything memorable yet. Certainly not anything near the game-changing types of uses on mobile devices that were enabled by LTE. But that was really because LTE was the first true mobile broadband service – Uber, etc. would have been tough to pull off on 3G.

It has also become clear that the operators are going to have a tough time charging extra for 5G. What they seem to be doing instead is finding ways to upsell customers to higher-tier Unlimited Plans, with bennies like discounted FWA (Verizon) or streaming TV service giveaways. It appears likely that premium charges for high speed/low latency versions of 5G will come from certain apps or specific use cases.

I also thought we’d be a bit further along with network slicing. As of mid-2022, it’s still largely in the evangelical, “there will be some beta tests this year” phase. This is one of the more promising, potentially game-changing aspects of 5G, with some real, incremental revenue potential. But it’s looking like a 2024-25 thing, not a 2022-23 thing.

A final thing that’s looking quite different: a pronounced tilt toward the enterprise. Even though the take-up of 5G devices has been largely driven by consumers, much of the messaging from the operators and other mobile ecosystem players is that the best long-term revenue opportunities in 5G will come from the enterprise market. Real investments are being made here – not only on the network side, but in mobile edge computing, and also building the sales and solutions selling infrastructure for the enterprise.

But, as we’ve seen so far with CBRS, in-building, private wireless, and so on, building this new enterprise wireless market is a very long-term play. We are not going to see substantial incremental revenues coming from the enterprise market for at least two to three years. Features such as low-latency, slicing, and some of the Massive IoT features are only now starting to become available. Also, the ecosystem around enterprise 5G is still formulating and will be much larger and more diverse. The operators’ exact role in this universe is still TBD, given the investment by hyperscalers, systems integrators, Silicon Valley/tech heavyweights, and others who have traditionally sold enterprise connectivity solutions.

I don’t live in the camp of pronouncing whether 5G is or isn’t living up to expectations. But three years into it, I think it’s playing out differently than many predicted. The most significant incremental revenue opportunities will come from the enterprise side. But that pot will be shared by a larger, and different cast of players than we’ve seen historically in the wireless industry.

Mark Lowenstein, a leading industry analyst, consultant, and commentator, is managing director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.