However, service providers planning to complete 5G deployments by 2022 may fail to monetize their infrastructure investment, as their systems might not fully meet 5G use case requirements. For operators, retention and acquisition of new 5G customers is not just about promoting 5G features. Operators also need to think about how they position 5G to their customers.
For many users, broadband cost and billing issues may be a reason to use 5G exclusively. But bandwidth and latency performance offered by 5G can be met by today’s FTTH networks. If the driver for the customer’s shift to 5G is price and billing issues, then why wait and invest heavily, when consumers’ wishes could be fulfilled right now? Today’s average fixed broadband download speed across the USA is already higher than 100 Mbit/s, primarily delivered using FTTH. Indian company Jio recently announced an FTTH service that starting at 100 MB/s to all consumers, extending to 1 Gb/s.
Another consideration is price. We see average data consumption per user almost doubling every year while average Broadband ARPU remains flat or stable, implying that consumers desire extra bandwidth at the same price. Fixed fibre networks are better placed to accommodate this trend, since network costs are more dependent on infrastructure deployed rather than available spectrum. Even 5G technology, which pushes encoding techniques much further, will eventually reach bandwidth limitations but optical networks use carrier frequencies in the Peta-Hertz range, with large scope for increased bit rates.
The essence of 5G’s added benefits lies in the ecosystem that will be built around it. Operators will need to gear up, also manage expectations, since full transformation will not happen until 2025-2030. The right structured approach would be to start building the foundations and building blocks that would enable operators to maximize the anticipated benefits, as early as possible using limited investment through multiple tactical moves.
5G adoption should be carefully considered by operators, who need to position the technology alongside high capacity FTTH networks. Not only to fully address the needs of consumers, but also to enable the full capability of the technology itself. For 5G to support high connection density and high-speed mobility, mobile service providers need to deploy vast numbers of cellular towers and base stations closer to users and devices. These towers and base stations must be interconnected through high-speed optical fibre networks. Introducing 5G would make little sense without a ubiquitous fibre backbone. Performance associated with 5G, such as low latency, high capacity and extreme reliability depend on having ample fibre. Operators and other stakeholders don’t need to choose between wireless and wireline investments. Instead these budgets will merge. Revenues for providers won’t only come from Gb connectivity, but also from revenue sharing models developed with next-generation service providers. Making smart strategic decisions regarding which technology to use in specific sections of a network, or upgrading capacity in a planned way, are essential.
5G adoption will not only be driven by smartphones. Smart watches and holographic headsets, for example, need direct connectivity, requiring more affordable broadband access. This plethora of devices will be far more difficult to offer using 5G access only. Fibre provides the backbone for 5G networks. Instead of rendering fibre obsolete, the full potential of 5G will only be realised with fibre backhaul. Telecom operators need to add fibre to support the evolution to 5G.
Part this article is derived from the FTTH Council MENA publications ‘5G Handbook’ & ‘Role of Operators in the Smart Cities transformation’.