Has 5G made telecommunications sustainable again? :Status Report
Nokia AirScale 5G base station.
The fact that we're still talking about the subject of 5G Wireless with articles whose headlines end with a question mark, is the clearest indicator of all that we haven't yet emerged from the initial skepticism phase — the phase we should be when its concept is first introduced. Several years into this, we should be seeing measurable results, rather than what my friend and colleague Steven J. Vaughan-Nichols calls "a bad joke."
Our objective with Status Report is to take the ten most important ingredients of any technology's capability to influence its users' businesses and livelihoods, examine them in isolation, and score them in more or less the same way. In so doing, we may be able to extrapolate pertinent, relevant facts about why a technology is influential, why it's disruptive, or perhaps why it's at a standstill. We begin, however, with where most analytical reports end: its conclusions.
Executive summary
Point 1: 5G Wireless is not yet a sustainable business
The whole point of 5G is to give stakeholders in wireless communications a path to sustainability. This can still happen, but we're at the point now, with respect to original projections, that sustainability should already have been achieved.
A variety of obstacles are to blame for this, one being the pandemic. No, 5G is not the cause of the virus. No, populist sentiment against base station and tower construction is not a serious roadblock here.
From the beginning, 5G's rollout plan called for a transition period, during which 4G LTE and 5G would co-exist. An August 2019 study by the GSMA industry association [PDF] -- published before the pandemic -- warned that systems might not be sufficiently covered by revenue from services with higher bandwidth and greater coverage, including in urban areas.
No doubt the pandemic actually supercharged that demand increase for higher service levels. Indeed, GSMA said, it was already looking like 5G bandwidth optimizing technologies like M-MIMO would not be enough "to meet the coverage, performance, and capacity requirements in urban 5G-era networks. . . on its own."
Long-term sustainability was supposed to happen when telcos moved their RAN control systems off of base stations and into the cloud. The transition to Cloud RAN was happening. However, one of the leaders in paving that transition path is a company — Huawei — that the European Union, the United States, and now the United Kingdom don't want to conduct business with. Now telcos with Huawei equipment in their base stations are conducting very different transitions: replacing functional (if suspicious) Huawei equipment with less suspicious (if not as functional) Nokia or Ericsson equipment. This postpones their Cloud RAN transitions, while they detour to different courses.
Point 2: In the absence of performance results, victory may be achieved through symbolism
While the rollout may be slower than first anticipated, carriers still depend upon the symbolism of 5G supremacy to maintain market relevance. T-Mobile is the best case-in-point. Beginning with its acquisition of Sprint, and leveraging its additional power to win spectrum auctions, T-Mobile's strategy of extending 5G symbolism to more geographical areas first, even if performance does not improve in the early going, is paying off. It's forcing competitors AT&T and Verizon to raise their bids, especially in recent US auctions for spectrum in the highly prized C-band, to combat an almost solid-hot-pink coverage map.
The downside of playing out the 5G battle as territorial rather than technological, as a McKinsey report suggested [PDF], is that carriers may find themselves spending more capital to gain network presence in suburban and rural areas. In an earlier era, where territory wasn't the prize, carriers would agree that one network covering a rural zone was plenty, and perhaps draw straws to determine which one that would be.
Point 3: 5G's seed capital won't be coming from faster phones
The state of the personal communications market as we enter 2021 bears undeniable similarity to that of the PC market (personal computer, if you've forgotten) in the 1980s. When the era of graphical computing began in earnest, the major players at that time (e.g., Microsoft, Apple, IBM, Commodore) tried to leverage the clout they had built up to that point among consumers, to help them make the transition away from 8-bit command lines and into graphical environments. Some of those key players tried to leverage more than just their market positions; they sought to apply technological advantages as well — in one very notable instance, even if it meant contriving that advantage artificially.
Consumers are always smarter than marketing professionals presume they are. Two years ago, one carrier in particular (which shall remain nameless, in deference to folks who complain I tend to jump on AT&T's case) pulled the proverbial wool in a direction that was supposed to cover consumers' eyes. The "5G+" campaign divebombed, and as a result, there's no way any carrier can cosmetically alter the appearance of existing smartphones, to give their users the feeling of standing on the threshold of a new and forthcoming sea change.
The capital for the first stage of the 5G rollout was supposed to come from enthusiastic consumers willing to pre-invest in a technology that might, maybe soon, exhibit some perceptible performance improvement. With that avenue having been blown up, carriers now look to enterprises for 5G's seed capital — specifically, from a data center distribution technology called Multi-access Edge Computing (MEC) that was grafted onto the 5G portfolio, though isn't really bound to 5G-specific components or infrastructure.
Sphere of influence
Here's where we identify the factors that lead us to draw the conclusions above. (See "How we evaluate and rate technologies, and why.")
In short, each category of influence is given its own compass direction, so that every "positive" points a different way. A positive score pulls our metaphorical pendulum forward on the chart; a negative score pushes it backward. At the end, we find where the pendulum bob ends up, and measure its distance from dead-center. That final score tells us, amid all the forces imposed upon it and the different objectives it must achieve, how influential and relevant that technology is for the given time, and perhaps in what way.
Stakeholder empowerment
While 5G is delivering quality-of-service (QoS) benefits, at best, on schedule [+5], service demand levels have already well exceeded projections from 2015 — which already may seem like ancient history. Thus the period of initial capital investments has been extended, perhaps indefinitely. [-7, net -2]
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Competitive advantage
Regardless of how well consumers perceive 5G as enriching their lives, and enterprises view it as a business enabler, every brand in the telecom market space is judged by its relative stance on 5G. [+7] For now, the trick to holding onto that stance is to keep those lofty visions of our glorious 5G future on life support. [-4, net: +3]
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Business sustainability
Geopolitical squabbles have forced carriers to take different paths to sustainability. [+3] What's more, these detours come at a time when the architecture of data centers is changing. Edge computing (ironically, one of the technologies in the broader 5G portfolio) is enabling distributed computing in remote areas — for instance, the very rural areas carriers need to plant their stakes in, to regain competitive advantage. As the resurgence of Arm processors dramatically reduces power consumption for smaller data center form factors, suddenly it may be cheaper to distribute communications power to base stations after all. [-7, net -4]
Evolutionary incentive
The very fact that low-power micro data centers (µDC) may be more sustainable and affordable in the long-term than larger cloud facilities, mandates reassessing the placement of 5G's goal posts. To put it another way, some of the design objectives that were being considered for "6G" in late 2019, may need to be accelerated for 5G now. For the remainder of the 5G transition to be successful, it must continue evolving from what it is now. [+8]. Only smaller countries can afford to wait out this re-evaluation before joining back in the transition. [-2, net: +5]
Market enablement
Until the position of the new US government towards China, and towards Huawei, are made clearer, every market in the orbit of 5G Wireless is stuck in a holding pattern. [+3] It isn't really possible yet to gauge how a 5G ecosystem can re-emerge, if one major player is excluded for geopolitical reasons, leaving a managed duopoly (which is possibly contrary to European Union law) or even a de facto monopoly if Ericsson's fortunes don't improve, leaving Nokia in the catbird's seat. [-5]
Customer value
The consumer is not completely turned off of the promise of 5G, although continued declarations from Steven Vaughan-Nichols can't possibly help that cause. [+4] A global survey of over 16,000 respondents from consulting firm Ansys showed that over 70 percent from the US, UK, and France believe either 5G has been overhyped, or they're uncertain about the legitimacy of carriers' claims. They haven't abandoned 5G entirely; they're just not on board yet. [-4, net: 0]
Economic contribution
The rollout of 5G Wireless does remain a positive contributor to nations' gross domestic product tallies, and an employer of engineers and other laborers. There are urban areas where 5G service is readily available, even though the jury is out with respect to performance improvement. [+7] In some areas of the world that were early adopters of the technology, re-investments have had to be made to bring 5G performance in-line with objectives. [-5] China may have been one example, although it successfully sold that project to its people as a post-pandemic national unification project. [Net: +2]
Societal integration
We're not at the point in our society where we're ready to say 5G has made a beneficial contribution to our lives and livelihoods. But there is a foundational element that may yet lead us in that direction: specifically, the hard-wiring of dispersed suburban and rural areas through new, high-speed fiber optic lines. [+4] This could be the breakthrough needed to obliterate North America's broadband barrier. We're also not yet at the point, as with the first generation of nuclear power, where we're spending more effort and resources cleaning up after the project's failures. [-2, net +2]
Cultural advancement
It's fair to say the cultural benefit of 5G Wireless to the people of Earth is not yet measurable. [+1] By contrast, the vast improvement of 3G's service levels over the two 2G technologies made feasible an entirely new industry for reaching individuals: music, literature, art, and functional endeavors. That 5G isn't the boon to our world that 3G was, is becoming a noticeable and recordable fact among the general public. [-2, net: -1]
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Ecosystemic enablement
Here is where 5G has brought forth an unexpected benefit: The Open Radio Access Network (O-RAN) project centers around software that enables access to the wireless network by subscribers' devices, using methodologies that are open source and unpatented. While the industry really wants only one RAN anyway, O-RAN would ensure that no single player in the 5G market mandates how devices attain network access. That's especially important in an industry where mergers and acquisitions have left a mere handful of players in the base station market space, assuming your hand happens to be that of a sloth. [+8]
Sadly, geopolitics has tainted this project's objectives, such that its contributors may be described as the Everyone Except Huawei club. Prior to the artificial extraction of Huawei from some markets, it accounted for more than half of radio equipment sales in those markets. [-6, net +2]
Final score: +0.56
With the sole exception of the Evolutionary incentive category, every component of our 5G Wireless sphere of influence is highly contentious. It eked out a positive score, after starting out two points in the hole with its stakeholder empowerment score. The final influence vector tilted more toward customer and societal benefit than self-serving interests. 5G isn't stuck in a rut due to some indeterminate design defect or malicious corporate intent. Anyone who sues AT&T or Nokia at this point doesn't have a case. Moreover, it catalyzed an unprecedented global endeavor, just before a cataclysm of political, social, and even environmental forces threatened to split the world apart.
The task before 5G's practitioners now is to regroup and reassess their requirements for providing communications infrastructure using a sustainable business model. This is not an impossible task. The fifth generation (actually the seventh) of wireless infrastructure may yet emerge. But we may need to wait a bit longer for the smoke to clear, before we can all shake hands and start over.