While 5G has been hailed as the holy grail that could usher businesses into a new era of prosperity, the buzz around consumer 5G benefits — chiefly mobile broadband and fixed wireless — has been relatively quieter.
When asked about the main drivers for 5G, Mike Murphy, Nokia Canada’s chief technology officer, highlighted the importance of 5G for consumers and Canada’s current deployment status during a media roundtable last Thursday.
“The first big use case is consumer mobility,” said Murphy. “It should be blatantly obvious because that generates all the revenue today. So you have to be good at that before you can look at some of the other things. So that’s why the focus at the moment is on consumer mobility globally.”
Murphy’s statement underscores the most lucrative sector for 5G. According to the 2018 Communications Monitoring Report, retail mobile was the largest telecommunication market sector with revenues of $24.5 billion and accounted for over 52 per cent for all retail telecommunication revenues in 2017.
The question, then, is how to get users excited to upgrade. A challenge many carriers are facing is how to communicate the benefits and technicalities of 5G to consumers without sounding convoluting and cause marketing fatigue. Even in the U.S., where standalone 5G is already slowing being rolled out, the main emphasis towards consumers is still speed.
“You’ll see they [the U.S.] are all about speeds,” Murphy elaborated. “And 5G is really delivering on some of the promises that we talked about at least on the speed set. So you’ll see announcements of 1.3, 1.4, 1.5Gbps. So there’s a lot of excitement happening now. Yes, speed does matter, because it is important. There are anecdotes that because of the rise in launching 4G, first in December 2010, that they gained a few million subs because of the interest. So it actually does matter.”
But even more so than speed, Murphy said he believes that shifting to 5G may not be a choice. As demand for data steadily rises and richer media continuously being adopted, 4G is simply inadequate to handle the influx of data.
“If we look at the last 15 years, the growth of data has never ever changed. It’s a very consistent 40, 50, 60 per cent growth every year for 15 years,” noted Murphy. “The devices are getting bigger and projecting onto TVs and so on for VR, and there are cord cutters, many things will drive new demand. So I think that never ever changes. But to deliver on that, you’re gonna have to go to 5G at some point.”
5G’s mobile pricing structure is still in the air
Because Canada is still in the very early stages of 5G deployment, a question mark hangs over its pricing structure.
Canadian carriers may simply take note from the U.S., where standalone 5G has already been deployed in limited capacities. As one of the first carriers to sport a 5G plan, Verizon adds an additional $10 to its monthly unlimited data plan. AT&T, on the other hand, had hinted that 5G could be priced similar to home internet where the cost is affected by both capacity and speed. Canadian carriers still need time to understand exactly how to monetize 5G.
The reason 5G has been primarily marketed towards businesses is due to it being a potentially new source of revenue. Once established and tested, 5G would be the foundation for new applications for AI, IoT, V2X, and a wide variety of new use cases.
“Then you come to the next stage, which is going to all as we talked about the full promise of 5G going to multiple industries and enterprises,” Murphy said. “And that’s the real hope and dream that 5G will spawn a new source of revenue. In those other various I’d say, the stage around the math, one is lots and lots of discussion, lots of proof of concepts.”
Canada’s behind the U.S. on 5G deployment, but that’s not all bad news
Given how much 5G deployment has been covered in the U.S., it shouldn’t surprise anyone that Canada is a bit behind on adopting the technology. The low band spectrum auction had just concluded last month, and the auction for 3.5GHz frequencies (known as “sweet spot” mid-band), won’t happen until next year.
Although Canadians may have to wait for a while longer to get blistering mobile data speeds, Ric Herald, president of Nokia Canada, thinks there’s a silver lining.
“Canada is a little behind the U.S. We do have 600[MHz] out now, or at least the spectrum has been auctioned, but there are probably six or eight months left to clear it before they can actually do something with it. But they can at least start using it to fill in coverage for their network. At least everything I hear from the technical experts is that 3.5[GHz] and mmWave are the sweet spot for 5G, and that won’t come here till at the earliest late next year. That’s good news, bad news. The bad news is everyone seems to feel that we’re behind. The good news is we’re letting the pioneers go with the arrows in the back. And we’re going to learn from that. And by the time we’re ready, the handsets will be improved.”