- A movement led by industry and governments, not consumers
In the short term, 5G demand will not be driven by consumers whose needs today are largely met now through 4G, but rather by businesses and governments, which stand to benefit from the next-generation of wireless for different reasons. For carriers, 5G is a chance to tap into new spectrum to deploy services with ultra-low latency, decreased cost per bit, and increased network capacity. Equipment vendors, in tandem, expect to benefit from sales of newly launched 5G smartphones and wireless routers.
For their part, governments increasingly see 5G technology as critical to economic growth and national security, and they are working with industry to claim 5G leadership. Early movers include the US, South Korea, China, Japan, UK, Australia, and Germany. The first commercial launches are taking place in the US and South Korea in early 2019. Meanwhile, Chinese authorities recently granted its three major carriers the 5G spectrums for network testing. A pre-commercial 5G launch is expected to happen in China during the second half of 2019, followed by massive rollouts in 2020.
IHS Markit projects that following initial sales of 37 million first-generation 5G smartphones this year, worldwide shipments will surge to nearly 525 million devices in 2023. This rollout will be the fastest ever for a new wireless generation, generating six times more unit shipments than the previous record-holder LTE, over a similar timeframe.
- 5G to roll out in phases, with a truly transformative experience in the +6 GHz range
Early 5G investment will focus on Fixed Wireless Access (FWA) and mobile broadband use cases, enabling “video everywhere,” smart homes, seamless video gaming, and augmented and virtual reality. Subsequent phases will see the growth of 5G use cases for businesses and governments, including massive IoT or machine-type communications (MTC) that enable smart buildings, smart agriculture, and smart cities. Deployment of mission-critical applications—including robots, drones, industry automation, digital health, and autonomous vehicles—will also come later. Part of the excitement surrounding 5G is its potential to satisfy all of these divergent needs under a single network architecture.
The 5G user experience will vary depending on operator spectrum. For services transmitted below 6 GHz, the user will enjoy better coverage but only a slightly noticeable improvement in performance. For services transmitted above 6 GHz, coverage will not be as good, but the user experience will be transformative. Above 6 GHz, channels can be wider than 100 MHz, delivering higher throughputs with very low latency for the user. Applications, such as real-time gaming, video downloads, and high-definition image uploads, will run much more quickly — with the caveat the user doesn't move location.
- Challenges ahead
Despite industry and government support, the path to 5G faces multiple headwinds. These go beyond defining a single industry standard and include:
- Managing cyber threats
- Conveying specific 5G use cases and their readiness to consumers
- Understanding consumer uptake and manufacturing the gamut of 5G devices
- Evaluating the impact of policy and vendor influence on 5G development
- Allocating spectrum among operators
- Realizing ROI on 4GLTE before investing in new build outs for 5G
- Laying the massive amounts of required fiber-optic cable and installing numerous cellular base stations
- Advancing the NR (new radio) interface and accommodating MIMO (Multiple Input, Multiple Output) antennae requirements
In addition, many businesses have yet to define models for 5G adoption. Consumers, in turn, will need to be convinced the upgrade to 5G merits the cost.
Whether you are looking for market share information, cost analysis of 5G-enabled devices, or performance benchmarking of 5G networks, IHS Markit is prepared to help. We are tracking the fast-changing 5G landscape and invite you to bookmark this page so you can check back regularly for our latest information and insight.