Tantra Analyst

What Is The Killer Use Case For 5G?

Whenever a new generation of technology is introduced, experts spin up exotic use cases seeking to prove the need for it. 5G technology is no exception. So, what is the use case that necessitates 5G? Is it virtual reality (VR), augmented reality (AR), artificial intelligence (AI), machine learning or all of the above?

You may have already heard marketers clamoring about the need for 5G. As with any complex issue, the answer is often simple, pragmatic and in plain sight. But before we jump into the use case discussion, let’s take a quick look at the current cellular landscape and 5G technology itself.

In its peak hype cycle, 5G promises to be everything for everyone: a unified interface offering multigigabit speeds and sub-millisecond latency, supporting distributed architecture and intelligent edge, utilizing both licensed and unlicensed spectrum, and more. In essence, it offers three distinct capabilities: 1.) ultra-high speeds for enhanced broadband, 2.) ultra-low latency for mission-critical applications and 3.) massive internet of things (IoT) for billions of devices.

On the other side of the equation is the ever-evolving cellular landscape. The latest rage is unlimited data plans, which are being aggressively pushed by carriers, especially in the U.S. Growth in data consumption continues unabated. According to the 2017 Ericsson Mobility Report, data traffic per user is expected to jump from 7.1 GB/month in 2017 to 48 GB/month in 2023. Meanwhile, operator networks are fast approaching capacity in many major metropolitan areas. It is not uncommon to face slowdowns at peak times in San Francisco, New York, Los Angeles and other major cities.

When you match what 5G has to offer with current cellular market needs, the answer to the question of its use case becomes clear: data capacity. Enhanced broadband with higher capacity will be the linchpin of 5G when it gets out of the gate in 2019 and 2020. But, you may ask, why do we need 5G? Why not keep using and improving 4G?

Cellular technology is similar to automobile design. After its introduction, the design is continuously updated to increase performance. But at some point, the updates get so complex that it necessitates a full redesign. This is the case with 4G. Since its mainstream introduction in 2010, it has had a fantastic run and is still going strong. But, with the current evolution of mobile technology, it is also becoming more complex. For example, there are different versions of LTE for narrow-band IoT, a different version for unlicensed spectrum, a version that supports ultra-low latency and so on. So, akin to automobile design, it makes sense to have a clean slate for 5G, just as it was for 2G, 3G and 4G.

Additionally, 5G is needed to bring in more spectrum, especially newer bands. The focus of any new generation of technology is to make the best use of available spectrum. Generational transitions become rallying points for industry players to demand more spectrum from regulators. This happened for 2G, 3G, 4G and now 5G. New virgin spectrum, without many users in its early phases, offers the best possible performance. 5G is adding a huge spectrum of new bands (i.e., gigahertz of millimeter wave spectrum), along with available spectrum in sub-6 GHz bands. This will enable 5G to offer unprecedented user speed and experience for mobile broadband applications. No more congested networks, buffering or waiting for content to load, even in dense urban settings. But, you may ask, don’t the radio frequency characteristics of mmWave spectrum pose coverage and device design challenges? The answer is yes, and the solutions to these challenges will separate the winners from the losers in the mmWave and larger 5G race.

Finally, 5G is substantially more efficient, which translates to a lower cost per bit to haul wireless data between networks and users. Operators will be able to offer users unlimited data plans at a much more cost-effective rate without breaking the bank.

We have established that 5G is a must to address the current demands of mobile data traffic. This traffic is not just from run-of-the-mill apps and video but also exotic apps such as VR, AR and the like. Some of these applications require latency that only 5G can offer. However, when the first 5G networks are launched in 2019 and 2020, the only use case that will warrant billions of dollars of investments is mobile broadband capacity. As networks grow and use cases mature, those exotic apps may become the next phase of 5G. As history has shown, you can bet on human ingenuity to develop innovative apps that best utilize the advanced capabilities of 5G.

There is a twist to this 5G mobile broadband saga: Some of it may not be mobile at all. I’m talking about fixed wireless broadband. There is enough pent-up demand in the home and enterprise broadband markets, thanks to negative customer sentiment toward cable monopolies in the U.S. and elsewhere, that some well-known carriers are looking to cash in on this opportunity. They aim to beat the monopoly and dominance of cable players in home and enterprise broadband segments. Although the numbers from these markets are nothing compared to mobile/smartphone shipments, they do still provide a lucrative revenue avenue for mobile operators to cash in on by exploiting readily available opportunity and pent-up animosity against cable provider monopolies.

In the early phases of 5G, when it gets off the ground in 2019 and 2020, cost-effective broadband data capacity will be its killer use case. As the technology continues to evolve, time will tell whether the exotic use cases being envisioned today or new and different use cases will carry the 5G mantle forward.