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Published   Wireless Watch

MNOs choices in 5G; Slash costs or die

5G evolution and deployment forecast 2017-2025

The term 5G has been hyped and hyped for the past few years and the hype is set to continue, but it is only now, as we approach a clear definition of how 5G will actually be installed that we can see it is a very different beast from previous generations of cellular technology.

Rethink has been in constant contact with mobile network operators and many have confidentially shared their plans for implementing 5G with us, and from this we have carefully constructed this report.

One of the key findings is the following:

There will be no sudden wash of generous contracts which stimulate equipment vendors and their share price

In fact operators are looking to spend about half of what they spent on 4G roll out during the early years of 5G.

This report analyzes the objectives, timelines and barriers which MNOs see to implementing 5G strategies in the period to 2025, based on a survey of over 100 senior executives within Tier 1 and Tier 2 operating companies, combined with in-depth interviews with a selection of those executives, and with key vendors, standards and open source organizations, and R&D efforts in this field.

The key theme that runs through this report is that 5G will follow a very different pattern to that of 3G and 4G in terms of architecture and regional patterns. It will not be a capex windfall for the vendors – operators will prioritize coexistence with 4G and architecture to prolong the life of existing investments.

There will be heavier reliance on outsourcing and on open platforms to reduce cost and transfer cost further than ever from capex into opex. Operators will spread their investment over a decade and will look to spend as little as half the capex on 5G roll-out that they did on 4G.

The reason behind all of this are the new network architectures operators will embrace such as virtualized RAN and hyper-densification, as well as Massive MIMO antenna arrays, all of which will be used in 4G before 5G arrives. When 5G comes it will push those few operators who have not gone down this route, into these new architectures.

One or two high profile operators plan to upgrade their Macro base stations first with 5G, because they see 5G as a medium term replacement for 4G. But most will use the new radios to densify selectively while keeping their 4G investment alive, as well as embracing WiFi more aggressively.

Despite the headlines generated by a few early adopters, most operators are struggling to find a business case for investing in wide-scale 5G, and will not make significant investments until the business models becomes clear.

Rethink also believes that as the 5G era begins, it will be characterized by a greater diversity of operators. This will be enabled by several trends, such as:

  • The emergence of shared and dynamic spectrum for 5G
  • The emergence of self-contained, virtualized local RAN and core
  • Flexible, on-demand wholesale platforms supported by network slicing

For the first time, a new cellular standard will not be the preserve of just existing MNOs. We expect to see heavy industry pressure to accelerate work on 5G-Unlicensed and on multi-operator technologies which enable a wider range of service providers. The speed with which the industry responds will also help decide the role of WiFi in 5G.

Many MNOs will only invest heavily in 5G where that will reduce total cost of delivering services and data.

  • reduce total cost of delivering services and data
  • fill gaps in capacity or coverage cost-effectively
  • support new revenue streams which would not be well addressed by 4G, such as low latency use cases or flexible wholesale platforms enabled by network slicing.
  • enable the MNO to penetrate a new market or geography, or gain significant first mover advantage in existing ones.

To find more about how 5G will roll out and to see our Forecast of the technology players which it will benefit, buy a copy of our Ran Research paper MNOs choices in 5G; Slash costs or die”

Methodology

The wireless forecast included in this report is based on research on the top 40 international mobile operator groups, which account for 80% of the global mobile subscribers (IMG-40). From this representative group of operators, the macrocell and metrocell forecasts are developed.

From the starting point of a calculation of the number of cell sites already deployed worldwide, forecasts were made of the numbers of base stations that would be rolled out a) to brand new sites and b) to replace or upgrade existing sites. These deployment forecasts were then categorized by network topology, spectrum band, spectrum mode, region and other factors. The equipment deployed in each case was also surveyed and modeled.

Pricing

Each module of RAN Research costs $2,000 for a single, individual license, and $4,000 for a corporate license for any one module. There are modules covering Small Cells, Cloud RAN, SON, Hetnets and enterprise small cells.

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RAN Research has been delivering RAN forecasts for 10 years and was the first research company in the world to introduce a small cell forecast, which it has done every year since 2011.  Subscription are available from Simon Thompson, head of subscription sales ([email protected]).

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