5G: Down the Rabbit Hole

CTN Issue: March 2016

Alan Gatherer, Editor in Chief, ComSoc Technology News

Fresh from Mobile World Congress, my favourite "tell it like it is" curmudgeon-cum-analyst Richard Kramer has kindly agreed to share his thoughts on the state of the industry and on 5G in particular. While reading his article, I had two thoughts that align with his position: 1) How long will it take to really do VoLTE well? and 2) 3G's lifespan was quite short and we should probably expect a lot more runway for 4G. Anyway, form your own opinions and send them to our comments page!

Todd HumphreysRichard Kramer
Senior Analyst, Arete Research

Like Alice in Wonderland, the mobile world has been turned topsy-turvy with an accelerated push to 5G.  One would think the lessons on 3G, 3.5G (HSPA), 4G, and its many variants, were never (painfully) learned: that the ideal approach for operators and vendors is to leave time to “harvest” profits from investments, not race to the next node. This was true in the earliest discussions of LTE (stretching back, if one recalls, to 2006/7), and in the interim fending off the noisy interventions of WiMax (remember those embarrassing forecasts from some analysts, which we fondly recall dubbing “technical pornography” for the 802.xxx variants garnering oohs and aahs from radio engineers).  Bear in mind that 3G was commercially launched in UK on 03.03.03, and LTE was demo’ed at the 2008 Beijing Olympics. Isn’t there a lesson here about leaving the cake in the oven long enough to bake?

That 5G is theoretically using the same, or at least similar, air interfaces, is hardly a saving grace. For now, the thought of deploying a heap of non-standard equipment is highly unappealing to telco customers. Neither is sufficient attention paid to the lack of spectrum, or the potential perils of relying on unlicensed spectrum for commercial services.  There seems to be a blind, marketing-led rush to be the first to announce milestones that are effectively rigged lab trials, and that convince few of the sceptical buyers to shift long-standing vendor allegiances. So what do we have to hang our hats on? A series of relatively disjointed and often proprietary innovations building on LTE, specifically many bands of carrier aggregation and millimetre wave, including unlicensed bands, to get support for (and make a smash and grab raid on) much wider blocks of spectrum and therefore better throughout and capacity; a further extension of decades of work on MIMO to further boost capacity; and a similar pendulum swing towards edge caching to reduce latency (while at the same time trying to centralise resource in baseband-in-the-cloud, to reduce processing overheads in networks).  The astonishing leap of faith is that by providing gigabit wireless speed at low latency, one will enable “new business models,” for now largely unimagined.

This leaves us with the farcical purported “business cases” for 5G. First, we have the Ghost of 2G Past, in the form of telematics, rebranded M2M, and now rebranded once more as “IoT”. To be sure, there are many industries that have long had the aim of wirelessly connecting all sorts of devices without voice or high-speed data connectivity. Yet these applications tend to work just fine at 2G or even 3G speeds. The notion that we need vast infrastructure upgrades to send tiny amounts of data with lower latency smells of desperation. Then there are all the low-latency video-related services – which again can be made more than workable with a combination of cellular plus WiFi. Meanwhile, just to muddy the waters and prevent any smooth sailing towards the mythical 5G world, we have a slew of new variants: LTE-A, LTE-U, low-energy LTE, MulteFire, LTE-QED (sorry, I made that one up), etc. And the aims of gigabit wireless have to be to supplant wireline, though that is hardly acting in isolation, as cablecos adopt DOCSIS 3.1 and traditional telcos bring on G.fast and other next-generation copper or fibre technology. As always, these advances are not being made in isolation, even if the plans of individual vendors seem to have done so.

Desperation is not confined to equipment vendors; chipmakers such as Qualcomm, Mediatek and others are facing the first year of a declining TAM for smartphone silicon, partly due to weak demand from emerging markets, and also due a rising influence of second hand smartphones being sold after refurbishment. We also see a trend of leading smartphone vendors internalising their silicon requirements, be it with apps processors (Apple’s A-series, Samsung Exynos), or modems (HiSilicon). Our view is that smartphone unit demand will be flattish overall this year, with most of the growth coming from low-end vendors desperate to ramp volumes to stay relevant. This should drive Qualcomm and MediaTek to continue addressing more and more “adjacent” segments within smartphones, to prevent chip sales from shrinking. Qualcomm is looking to make LTE much more robust to overtake WiFi and get traction in end-markets it does not address today.   

Thus we have another of the “inter-regnum” MWCs, in which we are mired in a chaotic economic climate where investment commitments will be slow in coming, while vendors pre-position themselves for the real action in two or three years when the technologies are actually closer to being standardised and then working.  We have like Alice, dropped into the Rabbit Hole, to wander amidst the psychedelic lab experiments of multiple hues of 5G, before reality sets in and everything fades to grey, or at least the black and white of firm roadmaps and real technical solutions. 

Editor-in-Chief: Alan Gatherer (alan.gatherer@huawei.com)

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