Who Benefits from 5G?

The Financial Times (FT) ran a somewhat mixed piece on the future of 5G. The thesis is that telecom operators are anxious to realise the financial benefits of 5G deployments but, at the same time, these benefits were always expected to come in the forthcoming years; there was little, if any, expectation that financial benefits would happen immediately as the next-generation infrastructures were deployed.

The article correctly notes that consumers are skeptical of the benefits of 5G while, also, concluding by correctly stating that 5G was really always about the benefits that 5G Standalone will have for businesses. This is, frankly, a not great piece in terms of editing insofar as it combines two relatively distinct things without doing so in a particularly clear way.

5G Extended relies on existing 4G infrastructures. While there are theoretically faster speeds available to consumers, along with a tripartite spectrum band segmentation that can be used,¹ most consumers won’t directly realise the benefits. One group that may, however, benefit (and that was not addressed at all in this piece) are rural customers. Opening up the lower-frequency spectrum blocks will allow 5G signals to travel farther with the benefit significantly accruing to those who cannot receive new copper, coax, or fibre lines. This said, I tend to agree with the article that most of the benefits of 5G haven’t, and won’t, be directly realised by individual mobile subscribers in the near future.²

5G Standalone is really where 5G will theoretically come alive. It’s, also, going to require a whole new way of designing and securing networks. At least as of a year or so ago, China was a global leader here but largely because they had comparatively poor 4G penetration and so had sought to leapfrog to 5G SA.³ This said, American bans on semiconductors to Chinese telecoms vendors, such as Huawei and ZTE, have definitely had a negative effect on the China’s ability to more fully deploy 5G SA.

In the Canadian case we can see investments by our major telecoms into 5G SA applications. Telus, Rogers, and Bell are all pouring money into technology clusters and universities. The goal isn’t to learn how much faster consumers’ phones or tablets can download data (though new algorithms to better manage/route/compress data are always under research) but, instead, to learn how how to take advantage of the more advanced business-to-business features of 5G. That’s where the money is, though the question will remain as to how well telecom carriers will be able to rent seek on those features when they already make money providing bandwidth and services to businesses paying for telecom products.