Feb 14 2018

5G Networks Will Soon Arrive, but Will Businesses Use Them?

Wireless carriers and their vendor partners are preparing to launch commercial 5G service this year, but it may take a while for businesses to adopt the technology.

5G cellular networks are officially on the horizon. But when wireless carriers turn them on later this year and in 2019, will businesses actually use them?

5G networks promise to deliver multigigabit connection speeds, the ability to support massive numbers of devices on a single cell and ultra-low latency of under a millisecond (meaning there will be much less delay between the time someone uses an application and when data is delivered over the network). However, it's unclear that businesses will adopt the technology in significant numbers in the near term, industry analysts say.

It will likely be at least three to four years before 5G networks are widely deployed in the United States outside of urban markets. Many wireless applications will still be able to be effectively used on 4G LTE networks for years to come. And some companies may not want to invest in 5G because they don't see an immediate return on such an investment

Wireless carriers and technology vendors are busy hyping the benefits of 5G, and potential business use cases include faster broadband, autonomous vehicles, sensor-driven networks and critical control of remote manufacturing or industrial equipment, as network infrastructure vendor Ericsson notes.

"It's rare that you find a business that has a use case like that," says Bill Menezes, principal research analyst for networks at Gartner. Early on, 5G will likely be used for consumer broadband and applications, he says. Based on the research Gartner has conducted with enterprises that are planning to roll out of 5G, he says, "the reality is pretty mundane."

Jason Leigh, a senior research analyst for IDC's mobility team, agrees that wireless carriers will initially target consumers with 5G service and look to scale up deployments before going after business customers in large numbers.

"When you start to flip the switch and transition businesses, you have a tricky balance of trying to find that use case that is scalable across different verticals and doesn't become too customized, so that you are building a technology back end that is only going to exist in one specific vertical," he says.

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5G Networks Gain Momentum

Despite the hurdles that may exist to business adoption of 5G, the wireless industry is moving full steam ahead on 5G development on multiple fronts.

In December, 3GPP, the standards-setting body for the wireless industry, ratified the Non-Standalone 5G New Radio (NR) specification for what will form the basis of commercial 5G products, as SDxCentral reports

On Feb. 8, Ericsson announced the launch of 5G Radio Access Network commercial software based on the 5G NR standard. The same day, chipset giant Qualcomm announced that it is working with numerous smartphone makers to release mobile devices using its Snapdragon X50 5G NR modems in 2019. Qualcomm also said the modem has been selected for use in live, over-the-air mobile 5G NR trials with multiple global wireless network operators in both the sub-6 GHz and millimeter wave wireless spectrum bands.

Meanwhile, in the U.S. market, wireless carriers are busy reading 5G networks. Verizon has said it will launch commercial, fixed 5G wireless service in Sacramento, Calif., and two to four other residential markets in the second half of 2018. On Monday, the carrier claimed it made the first over-the-air call on a 3GPP-compliant 5G NR system using licensed spectrum.

AT&T claims it will be the first U.S. carrier to launch a standards-based mobile 5G service, and it plans to do so in a dozen cities before the end of this year.

T-Mobile US plans to launch mobile 5G service using 600 MHz spectrum in the first half of 2019. And Sprint says it will roll out mobile 5G services on its 2.5 GHz spectrum holdings on a nationwide basis in the first half of 2019, FierceWireless notes.

Businesses May Be Slow to Adopt 5G

There are some clear business use cases for 5G networks, but it's also unclear how soon and to what extent businesses will take advantage of them and buy 5G devices or network services, analysts say.

What are the use cases? Menezes says that one possibility is specialty Internet of Things use cases. For example, in precision manufacturing, in which tolerances are measured in millimeters, having ultra-low latency is critical for wirelessly-connected machines.

If a machine starts to veer toward crossing a tolerance threshold that would ruin a product, real-time wireless controls could correct or stop it, potentially saving a company significant amounts of money.

The low latency of 5G networks may also drive applications such as real-time remote command and control of industrial or construction equipment, Leigh says. That could allow companies to ensure that remotely controlled equipment stops immediately. The same principles could apply to control of remote drones used to inspect utility lines, he says.

5G networks could also be used for fleets of autonomous vehicles, especially if they are able to communicate with other vehicles or infrastructure nearly instantaneously. That could improve safety and make traffic more efficient.

Early 5G business deployments likely "will not be the sexiest type of implementations," Leigh says. "But they're going to be the ones that will benefit from the technological advancements that 5G will offer."

Yet there may not be that many of them, at least not for several years, for a variety of reasons.

First, despite launches late this year and into next year, it likely will be 2021 or 2022 before 5G network coverage is pervasive across the U.S., the analysts say. Initially, Menezes says, carriers will deploy 5G in dense areas with lots of potential consumer users so that they can start charging those users for service and recouping investments. For example, Leigh adds, a company such as FedEx might love to use 5G for autonomous delivery vehicles but would need to wait for coverage to expand to make that viable across the country.

That means that many businesses will likely be using LTE networks for some time to come. "For use cases that don't require 5G, there will not be a lot of impetus to put 5G out there where LTE is sitting," Leigh says.

Along those same lines, Menezes says, many applications can get by without 5G. Many IoT deployments will continue to use Wi-Fi, Bluetooth, LTE and other wireless protocols.

Some carriers, such as T-Mobile, plan to deploy 5G on 600 MHz spectrum, which has strong propagation characteristics and can penetrate buildings easily. However, many carriers are rolling out 5G on higher spectrum frequencies, and into the millimeter wave band, meaning that the airwaves can carry lots of data but don't travel that far or penetrate buildings as easily as low-band spectrum. That could limit the range of deployments in the near term, as some carriers might only deploy coverage within parts of cities to start.

Also, larger enterprises that have typically run their own wireless networks might be reluctant to give up control of their network in a commercial 5G deployment, Menezes says. "What large organization is going to want to outsource [their network]? That's if they haven't already," he says. Those companies want to run and monitor their network on a granular basis but may not be able to do so on a commercial 5G network, he says.

Perhaps some companies will work with carriers to try and set up mini or private 5G networks for factory floors, Leigh says, that are separate from the main public 5G networks. All of that will depend on use cases.

Small and medium-sized businesses that do not run their own networks or have large IT bureaucracies might be more willing and able to adopt 5G networks, Menezes says. Enterprises might want to retain control of Wi-Fi networks that, with the advent of 8021.11ax, are growing more advanced as well.

Still, it's not too early to plan for 5G, Menezes says. Businesses should educate themselves on carriers' and vendors' wireless roadmaps. More importantly, they should clearly define and document their wireless use cases and application performance requirements for the next three to five years to determine whether they need to adopt 5G. In the meantime, he says, companies should plan on using "legacy" services - 4G - for "at least the next five years."

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