When Will We Really See 5G?
You might be wondering whether you really need a faster phone.
For a lot of people, the answer is no. The real payoff will be for businesses.
You're just being asked to chip in.
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Got your 5G phone? Didn't think so. It's easy
to talk about the eventual arrival of future technologies, but really hard to
say when we will see them. Every phone maker and telecom carrier is constantly
claiming that the new world is right around the corner and just you wait -
life'll be great.
The hype isn't likely to slow down any
time soon even though it's frankly not that clear - even when 5G gets
everywhere in a couple of years - that the typical mobile phone customer will
notice a material difference in the day-to-day use of his or her device. Calls
will be calls. Crowds - if we ever have crowds again - will present
somewhat less of a congestion issue and hopefully your battery will last a
whole day. Not too much incremental bang for your new bucks. And, unless the
phone companies have a change of heart, these will be "your" bucks
since a return to massively subsidized phones tied to multi-year contracts is
unlikely. Big businesses will ultimately be the real beneficiaries of 5G
although everyone involved would like the rest of us to help pay for it.
These hyperbolic 5G claims remind me of
the old computer gaming days when Intel, with great fanfare, would roll out a
new and far more powerful Pentium chip every so often and tout the greatly
improved benefits. But the faster processing speeds and upgrades in throughput
were mostly invisible to the end user. Not to mention that there
were generally no new games or other software available at launch to take
advantage of these chips. So, apart from the geeks who always needed
to have the latest hot new setup, there wasn't much organic demand for the new
hyped-up computers. The PC makers who were the primary marketers of the
computers using the new Pentium chips had a very tough time convincing the vast
majority of satisfied gamers to upgrade to new boxes.
We're going to see the same kinds of
consumer demand hurdles, along with other more unique obstacles, beginning next
year when the manufacturers and telcos start to even more aggressively try to
drive 5G adoption and large-scale transitions to new networks and phones. The
reality is that 4G (and especially 4G LTE) may just be good enough for tens of
millions of consumers in the absence of compelling arguments to the
contrary. 5G means new phones, tablets, laptops, network software and security
protocols, which translates into trillions of dollars of new spend. There are
cautions, warnings, and lessons here for the big guys that are also just as
critical and relevant for every entrepreneur and startup as well.
New products and services always face
the same challenges. They need to actively demonstrate one or more of the
following user benefits: (1) save me time; (2) save me money: (3) make me more
productive; or (4) help me make better decisions. In these crazy days of social
media and me-too ism, you could add "improve my status" as a fifth
consideration, but that's pretty hard to quantify. And honestly, for many of
the people who are struggling in the current environment, status is one of the
last things on their newly constrained shopping lists. You can forget about
arguing that these new and expensive 5G devices are gonna save them any time or
money. That's clearly a crock. The arguments around increased productivity or
improved decision making (which some will try to use to get their employers to
buy the phones for them) are a little more complex, but they end up in the same
place. No sale.
We're completely fixated on speed.
That's essentially the entire premise of the 5G pitch - bigger pipes and faster
speeds. But for the vast majority of consumers, as opposed to enterprise
customers, improving the speed of data transmission has next to nothing to
realistically do with improvements in productivity or decision making. Faster
alone isn't better and greater processing speed doesn't mechanically add
intelligence to the process. 5G for most of us will be nice to have, but hardly
need to have - at least until we start talking about truly autonomous vehicles
communicating with each other.
But even apart from the underwhelming
necessity of stepping up to 5G, there are other much greater obstacles that
need to be addressed. Here are the big three.
We Need A Worldwide Standard
4G standards were basically developed
and promulgated by the American and European tech communities, which then
promptly fell asleep. The Chinese stepped into the void and have dominated the
5G development process and dictated the majority of the 5G specs. Huawei and
ZTE completely dominate the 5G network hardware space, which is why the U.S.
and the U.K. have belatedly started barring all of their equipment from our
networks for national security reasons, among others. But you really can't have
a new global 5G standard and a worldwide solution if you have two huge
countries lining up their allies and competing with each other to offer
different networks that won't likely be interoperable or connected. It's clear
that this issue alone will take years to resolve regardless of who is in the
White House.
We Need to Address Health and Safety Concerns
The RF radiation boogie man is always
lurking. We can expect community questions and considerable resistance from the
tin foil folks - they've already attacked
5G towers and techs as Covid-19 sources - to the kind of extensive new equipment
deployment that 5G will require. There will need to be almost one million new
antenna sites in order to provide nationwide coverage and two particular
aspects of the nature of the 5G networks are especially problematic: the
antennas will need to be very close to the end users; and, especially in the
cities, they will need to be very densely concentrated. None of this will make
the neighbors very happy or comfortable.
We Need to Know Who Will Be Paying for These
Things
New phones, tablets, laptops, network software
and zillions of new antenna sites won't pay for themselves and the telcos are
looking at trillions of dollars of investments, which couldn't come at a worse
time for them. Basically, everyone in the U.S. who wants a phone has one. And
we're seeing new competitors entering the market to put additional pressure on
service revenues such that the next couple of years look like flat to down
revenues for the big carriers.
It's not a great situation for them, even if
5G represented essentially "business as usual", but the reality is
that 5G also means new network management tools, tighter chain (vertical)
integration, and a whole new business model that will be software management
intensive along with capital intensive at least for the next 5 years until
everything new gets funded and built out.
So, as to when we'll see widespread 5G, your
guess is probably as good as mine, but 2023 makes the most sense to me.
JUL 28,
2020
