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5G: HERE'S THE BEEF!

Last week I participated in the Wells Fargo Securities 5G conference in New York. It was titled “5G: Where’s the Beef?” with reference to the Wendy’s TV commercials from the 1980’s.

Over 25 companies were represented from all areas of the evolving 5G network ecosystem. Also present were some of the top wireless industry investment analysts in the country. It made for a fascinating two days.

The thing I found the most interesting was that, after many years of 5G hype, there is a growing consensus among industry experts on exactly what 5G will be in North America. In keeping with the conference theme, we’re finally starting to see some 5G beef. Here are some of the most interesting examples:

1) “It’s the fiber, stupid!”

As I listened to one executive after another describe fiber as THE critical element in 5G, I was reminded of Bill Clinton’s 1992 presidential campaign. For those of you too young to remember, Clinton ran on the theme “It’s the economy, stupid” to emphasize the importance of that singular issue. From what I heard last week, it’s not an exaggeration to say that if you substitute the word “fiber” for “economy” you have an accurate description of the number one issue associated with 5G deployment. As Verizon’s CTO Kyle Malady said, “wireless is moving towards fiber with radios hanging off the end”.

2) Mobile Edge Computing (MEC) will keep moving closer and closer to the end user, opening newer/smaller data center opportunities closer to the edge.

I found this one to be interesting because the use of centralized data centers today for cloud players is still a fairly recent development. For example, it was stated that Korea (which is a 5G leader) has established 8 major data centers serving the entire country for this purpose. But as MEC moves closer to the edge, in support of tightening latency requirements, we can anticipate that smaller, more distributed data centers will evolve. Some think these could be located at switching centers, cell sites, or even further out into large neighborhoods. Sports venues are already saying they will be the “edge” as they plan new AR/VR experiences for their fans. The NFL feels this is essential to keep fans coming to the stadiums. This is a new area for MNO’s and it will be important for them to plan this data center evolution effectively.

3) 5G innovation will be driven by enterprises.

Two examples of this where put forth by Joe Madden of Mobile Experts. The first was from the oil & gas industry, where sophisticated IoT monitoring will replace manual monitoring of drill rigs previously done by people in trucks. A second example was in the inspection of the Golden Gate Bridge. That project currently costs around $100K for people to climb the bridge and carefully inspect each bolt and connection. With the use of drones, high quality video, and other 5G capabilities, it is anticipated this can be done for less that $20K. The main point being that, as companies get more familiar with 5G data speeds and capabilities, a whole host of innovations will begin occurring that will translate into both higher quality work and significant cost savings. Perhaps we really are on the verge of another “industrial revolution” with 5G, as some have said.

4) We are in the very early innings of the 5G game, maybe even the first inning.

Over the course of the conference, our host Jennifer Fritzsche of Wells Fargo asked panelists what “inning” of 5G we are in currently. Invariably the answer was “early innings” or “first inning”. (The only exception was Australian native Stephen Bye of Neutral Connect Networks, who requested that the question be asked in cricket terms. 😊 ) It was yet another reminder of just how much 5G deployment is still in front of us.

5) What about self-driving cars?

I think it’s safe to say that we’re still years away from fully automated self-driving cars. Though smarter cars and connected cars make sense, the further you go down the path of self-driving the more sophisticated the decision-making capability of the car needs to be AND the more reliable the wireless network must be. It was stated that car manufactures aren’t ready yet to rely on radio signals to determine whether to hit the brakes or not, but they are willing to provide more sophisticated information to the driver to help them to make the decisions. That makes sense to me given where we are today.

6) Cable companies have both opportunities and face threats from 5G.

While there were no cable companies represented at the conference, there was discussion around MSO opportunities with 5G. The first one is the use of the 3.5 GHz CBRS spectrum, perhaps bidding for the Priority Access License (PAL) section of the spectrum. Less obvious to some is the value of their embedded Hybrid Fiber Coax (HFC) plant. It was noted by EnerSys that HFC can be used to power strand mounted small cells, avoiding the need for unique commercial AC connections to each cell. Also, possessing that Right of Way (ROW) means it’s easier to add additional fiber strands when needed. In terms of threats, fixed wireless using millimeter waves seems well suited to compete in the home broadband market. Some MSO’s have initiated aggressive 5G plans whereas others are keeping their cards close to the vest. It will be interesting to see who this segment of the industry evolves over the next few years.

6) Carriers will need a combination of spectrum types (low band, mid band, and high band/millimeter wave) to serve all the 5G uses cases in the future. Wow, we sure have come a long way from the days of FCC spectrum caps! Not only is there a need for as much spectrum as possible, there is a need for different types of spectrum. The logic behind this is that high bands (24GHz to 47Ghz) are best for fixed wireless and cell site densification, low bands (700 MHz – 900MHz) are best for macro coverage and mobility, and the mid bands (2.5GHz – 4.2GHz) work best for everything in between. A golf bag analogy was used, whereby the golfer has a choice of different lengths clubs in the bag for different purposes. (As a high handicapper, I will take that analogy one step further. Just because you have the same type of clubs in your bag doesn’t mean you will use them as well as your competitors. My guess is it will be the same with 5G spectrum. 😊)

7) A number of companies expressed concerns about maintaining operational excellence in this increasingly complex world.

This was a common response to the other question Jennifer asked panelists, “what is your biggest worry?” I think Verizon said it well, stating their desire to provide 5G network quality that lives up to reputation of their brand. As a former operations guy, it leads me to a conclusion that is not talked much about these days. Along with the new 5G capabilities there is a parallel need for evolving employee skill sets and sophisticated tools to plan and operate these complex networks.

Conclusion:

After a long season of 5G hype, we are now seeing the form 5G is taking. We still need the Release 16 standards to be completed (1Q2020) and for operators to deploy 5G cores, but we are getting closer to the real thing. As was discussed last week, in its fully deployed state it’s going to be like nothing we’ve seen before. And, since the conference was in New York, I’ll close with a phrase made popular by Mets manager Casey Stengel - it’s going to be AMAZIN’.

Bill Mayberry
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