5G initial use cases are going to be all about business

Yes, wireless carriers are talking up the consumer 5G dream, but the reality is that the real use cases are going to be all about the enterprise out of the gate.

How 5G will transform business The next generation of mobile technology, or 5G, has the potential to supercharge the evolution of everything from smart cities and autonomous cars to augmented reality and AI. Larry Dignan and Bill Detwiler talk about 5G and its potential.

The 5G race is well underway and rest assured you'll see a lot of hype, a few new devices with better bandwidth and promises that likely won't be delivered until 2020 at the earliest. But don't get distracted: 5G will be a business event first.

Also: What is 5G? All you need to know 

Recent comments from wireless chieftains illustrate how they're thinking about 5G. A few lessons include:

  • There's a push to be first in 5G and have services up, but scale will come with more standards based approaches.
  • Carriers and smartphone makers will talk up 5G, but a wide rollout of devices may not land until 2020.
  • 5G is described as a 3- to 5-year time horizon to really make a big bang.
  • Carriers think 5G can replace fixed line broadband.
  • 5G private networks may be built by enterprises looking to upgrade their networks, according to Gartner.
  • If you're thinking about real use cases for 5G think enterprises over consumers.

That latter point--enterprise use cases--is worth pondering. 5G will enable more business models, the Internet of things, analytics, smart cities and impact multiple industries. For now, 5G is likely to be all business. In a December research note, Gartner said that 5G may be used as a network backbone for private enterprise broadband upgrades.

Also: 5G is finally starting to feel real CNET

Why all the business focus when it comes to 5G? The consumer use case for 5G is a little tricky. For starters, carriers beyond more speed and streaming video haven't made the case for 5G. In addition, the price for 5G is also to be determined. And consumer behavior has changed. Consumers are stretching out smartphone purchases, questioning the price for premium ratio and looking toward other devices. 

IDC reported that smartphone vendors shipped 375.4 million units in the fourth quarter, down 4.9 percent from a year ago. The fourth quarter marked the fifth consecutive quarter of declines. IDC called the smartphone market a mess. Samsung saw units fall 5.5 percent in the fourth quarter and Apple shipments fell 11.5 percent.

In contrast, 5G looks like a no-brainer for the enterprise. Here's a look at the enterprise use cases for 5G via Gartner.

5g-enterprise-use-gartner.png

Simply put, 5G is going to enable a lot more than binge watching on your smartphone. 

More on 5G: 

AT&T CEO Randall Stephenson laid out the immediate vision on the company's fourth quarter earnings conference call:

I would say over time, 3- to 5-year time horizon, unequivocally, 5G will serve as a broadband -- a fixed broadband replacement product. I am very convinced that will be the case, and we are, obviously, on a standards-based path. We want a standards-based path that is mobile first. Back in the 90s, everybody was saying a wireless would never serve a substitute for fixed line with voice because there wasn't sufficient capacity, well it is a substitute for voice. We said the same thing on broadband in terms of would a wireless device serve as a broadband replacement broadly in the iPhone and then LTE really began to make that a reality. And then as we look at 5G, will you have enough capacity to have a good broadband product that serves as a streaming service or all of your DIRECTV NOW, your Netflix, etcetera?

I absolutely am convinced that we will have that capacity, particularly as we turn up millimeter wave spectrum. That's where the capacity and the performance comes from, and that's where you will begin to see a true replacement opportunity for fixed line broadband. So I have little doubt that in the 3- to 5-year time horizon, you'll start to see substitution of wireless for fixed line broadband.

Ironically, one of the top use cases, early use cases for 5G are businesses wanting to deploy 5G as effectively in their land environment. And so think about a wireless plug-and-play environment, so that is truly a wireless replacing fixed line is a high-speed Internet solution.

Takeaway: I'm not sure what's so ironic given AT&T is already building innovation zones and planning to connect hospitals, cars and stadiums. If 5G can be a cheaper way for business broadband than laying fiber then the enterprise market will be the real boom.

Also: 5G market predictions for 2019 TechRepublic

Gartner noted that the features of 5G will change enterprise networking:

In a shift from traditional cellular deployments, organizations will benefit from private network deployments that replace or augment campus Wi-Fi networks and wired in-building networks for applications such as factory automation and surveillance.

Must read:

Verizon CEO Hans Vestberg said his company was looking to be out of the gate quickly with 5G first in the consumer home and then business.

2018 was a year of 5G first. We were first to complete an overlay of data transmission on the 5G global standards. We were first to complete the 5G data session on the smartphone and in October, we proudly were the first in the world to commercially deploy 5G with our 5G Home product. At the end of the year, our confidence is high as we are heading to the 5G era and the beginning of what many sees as the fourth industrial revolution.

Later in the Verizon fourth quarter earnings call, executives noted that the rollout of 5G is also enhancing conversations with municipalities, which will use speedier networks for smart city deployments.

CES 2019: First look at the Samsung 5G smartphoneVerizon showcases the potential of 5G with drones, Disney and more  

Vestberg noted:

This is a completely transformative experience that gives customers speed and reduces latency at a fraction of today's consumption.

Takeaway: Verizon sees a telematics and IoT case for 5G too.

AT&T and Verizon have to balance the consumer and enterprise markets when it comes to 5G, but the early use cases are going to be all about business. Both AT&T and Verizon have large enterprise units and it'll be interesting to see what telecom giant capitalizes on enterprise 5G.

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