The most commonly used example of the improvements of 5G over current mobile communication systems is its ability to download full movies in less than three seconds. However, there are other reasons that 5G has been newsworthy—AT&T recently announced plans to introduce 5G in 12 US cities as part of a $145 billion network investment: “We’re at the dawn of something new that will define the next decade and generation of connectivity,” said Andre Fuetsch, chief technology officer at AT&T Communications. “Mobile 5G will jumpstart the next wave of unforeseen innovation.” Similarly, Qualcomm estimates that the 5G value chain, from original equipment manufacturers and operators to content creators, app developers, and consumers, could generate $3.5 trillion in revenue and 22 million jobs by 2035.
5G is the term given to fifth-generation cellular technology, which has improved upon previous technology in terms of speed and features. Cell phones in the 1980s were 1G devices, delivering analog voice communication at maximum speeds of 2.4 Kbps. Beginning in the early 1990s, 2G devices offered digital voice communication and SMS/MMS at maximum speeds of 50 Kbps. As these devices evolved in the last 1990s, 3G technology included video calling and mobile internet capabilities, with an increased maximum data transmission speed of 3 Mbps. Finally, today’s 4G (also called long-term evolution [LTE]) support applications that demand maximum data transmission speed of 1 Gbps, such as gaming and video conferencing.
Earlier this summer, the 3rd Generation Partnership Project (3GPP), which is an international consortium responsible for defining mobile technology standards, approved 5G standards that promise exponential improvements on 4G technology: faster speeds, higher bandwidth availability, and ultra-low latency.
5G will have estimated peak speed ranging from 1 Gbps to (hold your breath) a staggering 20 Gbps. In a simulated 5G speed test by Qualcomm, “mobile browsing speeds increased from 71 Mbps for 4G to 1.4 Gbps for 5G, with response times roughly 23 times faster. Download speeds for 90 percent of users went from at least 10 Mbps to 186 Mbps on 5G, with the median speed as high as in at 442 Mbps. Video quality also improved dramatically in both tests, with median 5G users seeing 8K, 120 FPS, 10-bit color video streaming.” These improvements in both speed and quality will accelerate the commercial adoption of video streaming, augmented and virtual reality, and teleconferencing. With 5G, the difference between wireless and fixed line wifi speeds will shrink significantly compared to LTE, which will give a big push to fixed wireless access both for enterprises and at home. Just earlier today, Verizon announced the launch of 5G fixed wireless home solution in select US cities.
Most wireless providers use preassigned bandwidths (measured in frequency or wavelength) to deliver data to users without interfering with data delivery from other providers. Bandwidth requirements are based on the number of users (i.e., the more users there are in a network, the more bandwidth is needed) and use case (i.e., TV broadcasting requires 100 times more bandwidth than a phone conversation).
As demand for data transmission has increased, bandwidth availability has become a problem. Current 4G/LTE technology uses 0.7–2.1 Ghz bandwidth. 5G, which uses millimeter wavelengths of 1–10 mm, can exponentially expand bandwidth availability to 30–300 Ghz. 5G also uses bandwidth more efficiently through the network-slicing approach - providing dedicated virtual networks with functionality specific to the service or customer over a common network infrastructure. For example, it can provide extremely low latency for self-driving cars and extremely high data speeds for video streaming.
5G is also expected to provide almost instantaneous, real-time connectivity by reducing latency to 1 – 3 milliseconds, which is a major improvement on the 25 millisecond latency of 4G. Low latency will be critical in use cases like self-driving cars, remote surgery, machine-to-machine communications, virtual reality, traffic systems, and industrial internet of things. In fact, 5G is expected to support up to 1 million connected devices per square kilometer!
With such compelling use cases, why is 5G not mainstream already?
First, mobile handset manufacturers need to make phones with 5G radios, now that 5G standards have been finalized. Over 4 billion smartphones are in circulation globally as of 2016, with projections of reaching 6 billion smartphones globally by 2020. Even with 1.5 billion smartphones shipped annually, 5G compatible handsets may not go mainstream until 2020.
Second, mobile operators must make their networks 5G ready. Currently, mobile operations deliver 3G/4G wireless data through cell towers, which typically cover mobile phones within a radius of 40 miles. However, the low-millimeter wavelength used by 5G phones, while increasing spectrum availability and data speeds, has a much lower range and cannot pass through thick obstructions. To cover the same range as a single 3G/4G cell tower, 5G needs many microcells and the corresponding mobile backhaul, which increases the cost and complexity of network deployment. To facilitate this, the FCC recently approved guidelines to speed up local and state regulatory approvals for deployment of 5G microcells, including a 60-day window to review applications to attach microcells to existing network and a 90-day window for building new ones.
Given such significant benefits, implementation challenges only impact the ‘when’ and not the ‘if’ of 5G commercialization. In the past, 3G standards were controlled by European firms, while US firms led 4G commercialization. According to WSJ, “the American lead in 4G has been a boon to companies such as Apple and Qualcomm … If the U.S. hadn’t led the way on 4G, the country might not dominate mobile technology, and its platforms, such as Instagram, Snapchat and perhaps even Facebook and Netflix might not have become global powers.”
At the macro level, there’s a race between US, China and South Korea to be the first 5G country—a race to capture the biggest share of the 5G value creation (and possibly 6G and 7G beyond that). Only time will tell who becomes the 5G leader, but we can say with certainty that patent holders for 5G standards will definitely be winners, harkening back to firms that provided jeans and shovels to cash in on the California gold rush in the early 20th century.