Last week I led a panel about 5G at Intel’s Developer Forum, and I promised you in the previous newsletter that I’d discuss 5G’s importance to the internet of things in this week’s newsletter. Let’s jump right into it.
Depending on who you talk to, the term 5G can mean everything from blocks of spectrum at 24 gigahertz or above to a dedicated cellular standard managed by the International Telecommunications Union. The differing definitions are a nightmare for anyone trying to make sense of what is purportedly the next big thing in communications.
This is profoundly different from 4G, which was tied to a specific standard in telecommunications set by the 3rd Generation Partnership Project (3GPP), a group of telecommunications standards bodies. But unlike 4G, 5G isn’t just for carriers. It’s for everyone, so everyone wants to play a part in saying what it means.
Thus the term 5G is all inclusive.
The carriers and their equipment vendors tend to use the phrase to talk about delivering wireless connectivity using a combination of cellular and Wi-Fi services. Carriers will use small cells, Wi-Fi hotspots, cellular towers and anything else at their disposal to ensure a connection. (They used to call this “het net” or heterogeneous network.)
The FCC and others have expanded the definition of 5G to cover the airwaves folks will use to deliver next-generation wireless services. So Google and Facebook’s plans to deliver gigabit wireless broadband using spectrum above 24 GHz also count. The FCC basically uses it to mean “future communications” and also spectrum.
But slippery terminology aside, the key thing to think about when talking about 5G is that the goal of the transition is to handle more things on the network, as well as a huge variety of things.
When 4G was rolled out in 2010 and beyond, carriers were trying to boost capacity on their network and lower the cost of delivering bits of information over the air. 4G was for the iPhone era, when mobile data consumption began to overwhelm networks because suddenly everyone was carrying around a little computer.
But 5G is about variety. The internet of things will need wireless service for everything from trucks to temperature sensors. Not only will the number of devices multiply, but they will have different needs. Downloading an app requires a different level of service than sending sensor data. Medical devices require less latency and more security than playing Pokemon Go.
To handle this, carriers are embracing software-defined networks in their core so they can efficiently slice and dice spectrum and customer bills as needed. This is why AT&T is building a network that Intel’s Diane Bryant compared to those of her cloud computing customers.
It’s also why companies such as ItsOn are succeeding. ItsOn offers a service that allows carriers to change their pricing and service offerings in hours as opposed to weeks. Delivering a flexible array of services for an infinite variety of devices will take a lot of agility.
For telecommunications operators, the wrinkle in 5G efforts is that all of this transformation happening in both their core networks and in the types of devices they have to connect is also happening at a time when their revenue is under assault. We may hate paying big bucks for wireless data, but carriers hate the loss of differentiated voice service and incredibly expensive texting plans a lot more.
Carriers have had to shift their pricing tremendously over in the past decade while consumers used a lot more of their product. And delivering data over a cellular network is expensive. Historically cellular connectivity has been priced at a premium, but carriers are waking up to the fact that they have to rethink their strategy.
Competition from other options such as alternative low power networks, and a desire to try to increase the overall market for cellular connectivity, force them to price more in line with the costs of delivering cellular service. And that leads analyst Chetan Sharma to say that economics as opposed to technology will define what 5G becomes.
In next week’s newsletter, I’m going to dig into some of the economics of cellular options versus the low-power wide area networks like LoRa or Sigfox. It should be fun!
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