Stakes Are High as US Seeks to Be First in the World to 5G, Say Industry Experts
5G will mean fundamental changes to the overall communications industry, speakers predicted Tuesday at a Georgetown University Center for Business and Public Policy event. They also agreed the race to 5G is real and the U.S. must win.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The U.S. isn’t pushing into 5G because it needs to compete with China, it’s doing so because it has no choice, said Mark MacCarthy, senior fellow at the Institute for Technology Law and Policy at Georgetown Law. People won’t want 5G until they have the right connected smart devices, MacCarthy said. The devices will “change the way companies compete,” he said. A company like John Deere won’t be in the tractor business anymore but in the business of providing “agricultural systems,” he said: “That kind of shift from individual products to systems is going to happen in area after area after area.”
With 5G, it will be possible to download a two-hour movie in 3.6 seconds, compared with 6 minutes with 4G, MacCarthy said. “From the point of view of the consumer, that’s the difference between 100 MBs and 10 GBs,” he said. It will also allow for a “massive increase in connected devices at lower latency,” he said. People already have connected light bulbs, security cameras and thermostats in their homes, he said: “There’ll be more of that and it’ll extend to mobile.”
“The stakes couldn’t be any higher,” said John Mayo, Georgetown economics professor. Companies here are spending tens of billions of dollars on 5G, he said. It's unclear whether anyone will get a “first mover advantage” as 5G unfolds, he said. “In our capitalist system, unlike China, we have a lot of different players competing,” he said. “We don’t know if there’s going to be dominant firm that’s going to provide leadership.”
“The connectivity is going to be so massive that it’s going to drive multiple business cases that we don’t know exist,” said Wells Fargo’s Jennifer Fritzsche. The “year of data” came in 2007 when Apple launched the iPhone, she said. “We really are waiting on the devices” for 5G, she said: “That’s kind of a hard place to be.”
Fritzsche agrees with AT&T that 5G will start first for business customers. “The enterprises are very much looking for ways to use 5G to make themselves more efficient,” she said. That will be different in every industry, she said. On the consumer side, 5G will start with very “nichey” products, she predicted.
Verizon is taking a different path, Fritzsche said: “They’re going right after the heart of the cable business.” Verizon’s model is to take fiber close to the home and then cover the last 2,000 feet using millimeter-wave spectrum and “that has real implications for the cable business,” she said.
Carolyn Brandon, senior industry and innovation fellow at the Georgetown Center, said 5G has replaced net neutrality as the most overused phrase in telecom. Given the investments China is making, the race to 5G is more than a slogan: “It’s very, very real” and far from “trivial,” she said.
The kinds of companies that are reportedly in discussions with Dish Network to form a fourth wireless competitor (see 1906170051) speak to the industry's changing nature -- companies like Amazon and Google, Brandon said. “These are companies that certainly have the money to get into the spectrum business but probably are smart enough to realize actually putting sticks in the ground is a long, hard, expensive slog,” she said.
Companies like Ligado and Rivada also are trying to find a “path to success,” Brandon said. “You definitely have a lot of entities out there that are not your traditional network operators and providers,” she said: “I remain hopeful that we will see different types of competition and very different sorts of companies.”
Video will be the first big use of 5G for consumers, said Anna-Maria Kovacs, visiting senior policy scholar at the Georgetown business center. “There are other uses, which are arguably in many ways more important, but aren’t going to use as much of the network,” she said, citing robotic surgery and autonomous driving.
The industry is already changing, Fritzsche said. AT&T doesn’t break out traditional wireless spending and Verizon is stopping, because wireless and wireline are so “interrelated,” Fritzsche said. Fiber will be the essential ingredient for 5G, she said, noting 16 bid for fiber network operator Zayo, which is being taken private. “A lot of private equity money is chasing this space,” she said: “You can’t make cookies without eggs and I think the fiber is those eggs.”