Research from Xona Partners on 5G deployment trends and prospects reveals that operators will focus on mid-band spectrum. The millimeter wave technology will remain a niche play in the short and medium terms.
5G is a Mid-Band Play
Operators around the world have spent over $16.2 Billion acquiring 3.5 GHz spectrum (C-band) in the 18 months between January 2018 – June 2019. Deployment in the major Asian markets will center on 3.x GHz where regulators in Korea and China released substantial amounts.
The 2.5 GHz band is available in all major markets: The US, Europe, China, Korea and Japan. The band remains lightly used in Europe and many other parts of the world, including the US. Europe’s challenge is that most 2.5 GHz spectrum is FDD, which limits the spectral efficiency gain from massive MIMO technology.
US Lacks Mid-Band Spectrum: Risks with Millimeter Wave Deployments
The US market suffers from lack of mid-band spectrum. Millimeter wave deployments are challenged in suburban areas where low subscriber density and short range reduce business case viability. In urban markets, millimeter-waves provides islands of high throughput, but cannot provide a long-term solution for operators who will need mid-band spectrum. Millimeter wave deployments have to overcome the scalability challenge: the US is the only market to date focusing on commercial services in this band.
CBRS Delays Mainly Impact Vertical Markets
CBRS spectrum delays are hurting deployments of neutral hosts and private wireless networks in vertical markets more than they are hurting service providers. Limited device ecosystem has adverse effects on these markets. The 70 MHz allocation available to service providers is rather small in comparison with other countries. Viability of vertical market deployments hinges on availability of devices and infrastructure at cost effective pricing. Economies of scale from service provide can help realize that, but has so far been delayed.
Waiting for the Core
The 5GNR radio provides most benefit over LTE in the midband spectrum. Evolution of the core is progressing, but will be some time before true 5G core is commercially in service. To realize the full benefits of 5G, in both carrier and vertical markets, will require the new 5G core. This will take some time to mature commercially.
The availability of many options for core network architecture and different migration path from the current 4G architecture remains a challenge that the industry needs to sort through. This is a very critical point that has not well publicized, but makes an important challenge for the industry overall as 5G deployment trends continue to evolve.
Related research:
- 3.5 GHz 5G C-Band Spectrum Valuation Benchmarks
- 5G millimeter-wave spectrum valuation report
- The Critical Dimensions for 5G mmWave Fixed Access
Note: we at Xona Partners have been working with regulators and service providers worldwide on establishing their 5G roadmap, assess risk, plan core and cloud migration, among other activities. Contact me for information on how we can help.