September 19, 2018

MWC Americas - 5G Likely to Drive More Network Competition

005930 KS, 066570 KS, 9434 JP, 992 HK, DT, LNVGY, S, T, VZ
By Hartmut Leuschner
The challenges surrounding deployment of 5G networks in the United States, ranging from network deployment to device pricing, dominated discussions among telecom industry managers during Mobile World Congress Americas last week.

MMWave Performance Better than Expected
When the CTOs of AT&T Inc., Deutsche Telekom AG's T-Mobile, Verizon Communications Inc. and Softbank Group Corp.'s (9984 JP) Sprint met on stage at Mobile Wold Congress Americas in Los Angeles last week, it was obvious to the audience that all operators were gearing up to launch the first commercial 5G services, in part to take market share from cable operators. "The cable guys are always saying that wireless will never be able to challenge their home broadband offerings, but our results speak for themselves," a carrier executive said, noting tests have shown less signal distortion from trees and walls than expected and download speeds of up to 800 Mbps on top of buildings 20 stories tall, exceeding expectations.

Both AT&T and Verizon focus on millimeter wave technology (mostly in the 28GHz band) which is much faster than lower frequencies of Sprint's 2.5GHz and T-Mobile 600MHz. One obstacle with 28Ghz band is that it does not travel well inside homes; however, with new receiver technologies displayed at the event, millimeter wave signals may be strong enough to connect with devices inside the building. "We are clearly after the cable companies," one operator executive said publicly. A manager from an infrastructure supplier said he believes deployment costs per MB are falling fast enough for network operators that they can make very competitive consumer offerings. Verizon began offering a 5G Home solution for $50 a month in selected cities since Sept. 13, using mainly access points from Samsung Electronics Co. Ltd. (005930 KS).

Device Prices Not Revealed
Carriers refused to speak about retail prices for upcoming 5G smartphones. Verizon said it plans to start with an upgrade of the $500 LTE model Z3 from Lenovo Group Ltd.'s Motorola early next year, and Sprint said it plans to launch a 5G device from LG Electronics Ltd. (066570 KS) before 3Q19. One telecom executive expects AT&T to secure a nationwide exclusive for the launch of a 5G smartphone from Samsung by early 2Q19. "The 5G devices will very much look like our 4G devices that we currently have," one industry executive said. An engineer said prices may be high as the devices contain up to four antenna modules instead of one, and the device chassis may require new heat-absorbing technologies to prevent overheating when data throughput is 10 to 50 times higher than current rates. "Prices will come down when volumes reach scale, but that may take two years," a wholesaler said. A carrier source expects prices for 5G smartphones and tablets to come down with the opportunity of edge computing via 5G. "We are in talks with OEMs and may soon start testing some 5G networks with edge computing where most of the memory, most of the processing power and most of the operating system sits somewhere close in the cloud and in mini data centers on 5G towers," he said, pointing out high interest from larger enterprises to test such devices on corporate campuses. The source said this trend might start earlier than he previously expected.

Lack of Cell Sites
The biggest hurdle to faster 5G network deployment remains the availability of sites to deploy necessary access points. Presenters estimated 5G coverage in the United States needs around 1 million cell sites, almost three times as many as the current installed base (which can be partly used for shared 4G and 5G coverage). One source said there is not enough space to build towers for all access points, so cities have to offer thousands of buildings and lamp posts to network operators to help them deploy the cell sites. However, with no standard pricing for site rentals, communities can charge what they want or refuse to offer sites at all, according to one source, who believes the lack of standards for site fees may remain the biggest challenge to roll out 5G on a nationwide basis. A tool to supply more access points might be auction sites like, an online marketplace that connects mobile operators and property owners to facilitate the buying and selling of small cell installation locations.