Anyone knows what generation processor running in their laptop? How about which DSL or cable modem technology is serving their house? With 802.11ax starting to come to market, I don’t see anyone rushing to upgrade their access node. When no one is keeping track of ‘generations’ in these technologies, why is it that in mobile it’s all about the “G”? How did this come about and why? And, will it keep being this way? Or will 5G be the last “G”?
Processors, Fixed Access and Wi-Fi
As I recall back in the 80’s and 90’s we used to buy computers based on the processor. We were all familiar with the different generations of Intel processors, like the 8086, 286, etc. Then came the Pentium and after that fifth generation, most people lost track. Computers became a commodity, the market structure and sales channels changed. Marketing focused on applications and away from technology to reach the mass market.
Fixed access did not even benefit from such attention. We had dial up services with increasing speeds until DSL and DOCSIS came along. But here, no one kept track of which generation they were on. The only time I find what I am using is when I switch to a higher speed plan and need to get a new modem. Technology is in the background, hidden and removed from the end user.
Wi-Fi also underwent several evolutions starting with a, b, g, n and ac. Today, .11 ax is the state of the art. But we are not quick to buy new modems – people wait until their access node dies, or they change location, service, or something similar.
Marketing Wireless Services
In mobile, the situation is very different. Marketing in the early days focused on coverage. This is still used today. Here in Canada I still hear “Canada’s largest network” in marketing ads. [A side note to Canadian service providers: you are stuck in the 1990’s!]. When data came along speed became important. The notion of speed fully came about after the release of the iPhone in 2007. Marketing 4G services focused on speed. The race among US operators to claim “America’s fastest network” is an example. We are still in the era of coverage and speed. Technology is fuelling the marketing machine. It’s necessary to claim a new generation to get consumer attention. Unfortunately for the operators, such differentiation is short-lived because all operators, more or less, follow similar upgrade plans.
Now that we are on the cusp of 5G, things are still the same. People are looking at 5G for more speed – 10 or 20 Gbps instead of the puny 1 Gbps for LTE. Operators are racing to claim 5G. But it may well be last ‘G’ to claim for several reasons. One of the reasons is technological, the other which I think is more fundamental, goes to the core of the operator’s business strategy.
Technological Perpective on 5G
The migration between different past generations was truly a step function, a leap forward in terms of capabilities enabled by technological innovations. 5G on the other hand is largely an optimization of LTE. 5G allows a wide range of different deployment scenarios to meet its target performance requirements. This leverages advancements in computing and networking that are not fundamentally wireless connectivity issues. For example, network virtualization was not a topic on the mind of engineers who developed the LTE standard, but it plays a major role in enabling flexibility in the 5G architecture that’s necessary to meet the performance requirements. Similarly, separating the control and user planes is a major architectural features of 5G, but it means nothing to the average user on the street.
The fact that 5G is an incremental optimization is evident from how operators plan to role out 5G services. Common steps go like this: deploy 5G radios with LTE core network, then deploy 5G core and switch user traffic to the new 5G core while keeping control on LTE, then switch control to 5G core and get rid of the LTE core. Will subscribers care?
Going forward, there will be so many different permutations that anyone will be able to claim 5G. It will get very confusing to tell what generation is actually in service. The use of “G” will lose its significance from a technological perspective.
Market Strategy Perspective on 5G
The use of “G” could also lose its significance from a marketing perspective. If the industry evolve similar to the computer industry, differentiation will shift to the application layer and the services that could run on the network. This presents a major challenge to the service provides: marketing based on speed and coverage means they are nothing more than a dumb pipe. Operators hate being identified as dumb pipes, but they have failed to differentiate and to generate revenue on anything other than connectivity.
How operators market their services and how they position in the market is only a reflection of deeper issues that are fundamental to business strategy. For instance, we have recently been working on network sharing and neutral host concepts. Under typical operating conditions, operators would be hostile to these, but should business strategy focus on application and services instead of coverage and capacity, there is great potential for shared networks and neutral hosts to take hold in the market. [This deserves another post!]
The flexibility of 5G allows for a wide range of deployment scenarios, services and applications. The technology picture is becoming more obscure for users as boundaries between technologies are less defined. This will confound users who will get more desensitized to marketing based on “G”. Operators have an opportunity to step beyond marketing based on coverage and capacity. But it is an opportunity with an immense challenge. Will operators seize the moment?