stein@opensky
A grumpy old guy
I covered this topic also over a year ago in early 2020 (i.e. here on “5G? 6G? Hypes, geopolitics and business”). However, I feel a need to comment on it once again – since 1) many people have been raising concerns lately about 5G disappointments and the business case for 5G – and 2) since many countries also seem to be moving full speed on 6G research – and just now, the NGMN has released its first White Paper on 6G. At the same time, operators all over the world seem to be rolling out 5G at full speed – and their marketeers are doing the best they can to convince everyone about what 5G can do for them and how 5G can save the world. According to the GSMA, there are now more than 154 5G networks launched with mobile services across the world - and 56 5G FWA launches (partly overlapping).
In my previous company, I started looking into 5G some five, six or seven years ago, some years before the first 3GPP standard (Rel 15) was even ready. The vision for 5G got more or less determined by NGMN in their first 5G White Paper from 2015 – and the technical standards people in 3GPP have been working hard ever since to issue the various 5G standard releases. Long time before anything was ready to be launched, however, operators, and in particular telco suppliers, have been bragging about what they have done or have planned for 5G. Already at MWC 2016 in Barcelona all the big telco suppliers had something to show about (pre)-5G and were demonstrating 5G use cases. The 5G hype has been great for many years already – but so far, the great 5G promises have yet to materialize.
My reasons for going on on this topic is that I have been engaged somehow in practically every mobile “G” since 2G – and with the risk of being regarded as a grumpy old guy that have “seen it all before” I want to offer some perspectives.
Is 5G delivering according to expectations?
Promises and (as a consequence) expectations around 5G have been great – but we see consumers feeling they have been “cheated” on the 5G they have got – like e.g. in South Korea where disgruntled consumers are planning to sue the operators. I also commented on a similar concern among consumers in the USA in one of my earlier articles in which I offered some reality checks about rolling out a new mobile network. Some of the essence there was that rolling out a mobile network takes time (and money !!!) – and that its capacities and speeds depend on the amount of spectrum that is available and actually in use. Coupled with marketing that does not match the actual situation, consumers obviously get frustrated. From a personal perspective, as someone I would call a knowledgeable customer about the topic, I bought myself a 5G capable handset half a year ago (something I would normally wait with) – but at my house, there is still no 5G coverage – although it is expected this year some time. Normally it takes 3-5 years to achieve “national” coverage – and this is with “normal” spectrum, i.e. not mmWave.
Consumers are one thing, however the real promises of 5G are about digitalization of industries and society – and, although this has been promoted, this is of less concern for consumers – and the technologies as well as business models for this are only just starting to come to market. It is, however, clear that this promise has so far not been kept. It will most likely take another few years before we start to see real effects in this area – and if so, probably mostly spot-wise and for selected use cases. So, is 5G delivering according to expectations? Not yet! … but will it eventually deliver? May be!
The telco way of work – Is it sustainable?
When I was a young engineer working on developing 2G, the idea around a new digital Pan-European mobile communications system was fascinating – and eventually it turned out even better in commercial terms – as the first ever mobile communications system with global reach and scale! I was also fascinated when I was working on the vision for 3G, although it was still early days at the time. Then I moved into more business-oriented management jobs – which probably has coloured my more cynical views presented here somewhat on 5G, 6G or alternative solutions.
In my article from last year on “5G is all around us – but who will eventually benefit?” I commented on the telco way of work, i.e. to develop a new “G” and to capitalize on this new “G” for 10 years – while working on a new “G” in the pipeline. It has been like this ever since 2G came to market – and when 2G was being commercially launched in the market, I was already working on 3G as a researcher and engineer. This seems to be what is currently also happening with 5G and 6G. I am not sure; however, it is a sustainable model going forward – for various reasons:
Increasingly complex ecosystem: As commented in my earlier article on who will eventually benefit, with every new “G” the ecosystem is opened up for new entrants. At the start of 2G, operators were often national administrations, they were buying equipment from telco suppliers – and they sold mobile phones to consumers – in a “closed” and cosy telco environment. Over time, things have changed, however.
Already in 2G and 3G, regulators opened up for MVNOs – and later we have also seen MVNEs coming to market. With the 4G standard, mobile was opened up to the internet, with handsets no longer only being telephones - but general-purpose internet devices. Already early on, handset manufacturers like e.g. Apple or Samsung managed to get a good grip on consumers – as consumers mainly buy “phones” they like - not subscriptions – and with handsets becoming general internet devices, this has been even further strengthened. Media and content companies also have a good grip on the consumers using the mobile phones – and so have social media giants like e.g. Facebook – and a range of Over-The-Top (OTT) providers are competing with MNOs on services. There are also new aggregator roles in various areas – so there are many new players around these days.
What has further been (will be) introduced with 5G is the concept of network slicing and a stronger focus on B2B and industry verticals. This will open up for new business models and new operating models, including private 5G networks in various forms. A major trend these days is also to separate tower companies from MNOs – mostly for financial challenges in building and offering 5G.
Increased technical complexity: From an increasingly complex ecosystem, there will obviously be increased technical complexity – and for every “G”, the engagement in the standards process has had an increased participation from a range of new players, lately also including industry verticals – and since everyone naturally tries to accommodate his own interests, the standards get increasingly complex.
While 2G and 3G were Circuit-Switched (CS) telecom networks with “manageable” complexity, 4G introduced an IP core – and for 5G we have seen a redesign of the (Stand-Alone) core network to a Service Based Architecture – which makes the architecture more IT-like. In both cases, the ecosystem is opened up further – with opportunities for new players.
In any case, although backwards compatibility with CS was dropped in 5G, every new “G” is standardized as a “system” – which gets increasingly complex every time. Now that it is all very IP-based and IT-like, we could ask the question, however, whether maybe it is time to change the approach? Maybe we could do it in a similar way to how the internet standards are maintained, i.e. to assume a base platform and to make patch-work on top of it? In other words, could 5G be the last “G”? We may need to upgrade the RAN occasionally – and introduce new types of services, but the main core?
Finding the use cases and business cases: In the early phase of 3G visionary work, 3G was going to do everything 2G did, just better, but with unclear use cases otherwise. A lot of time was therefore spent on the technical performance criteria. As is turned out, 3G ended up not much better than 2G – and many operators are today sunsetting 3G before 2G. 4G turned out to provide the first “proper” mobile internet – while 5G in many ways is 3G all over again – and 6G seems to be doing the same. We could therefore ask the question if 5G (and 6G) are technologies looking for a use case (?) – or if it is technology for technology’s sake.
Being an engineer, I have for many years thought that, for fundamental technology shifts, these have to be driven by technology and technologists – and then the market and marketing people will need to figure out what to sell and how to sell it when it comes. This is of course a classical internal conflict in an organization, however, time is too long for it to be done any other way – as the marketing horizon for product development often is a matter of months. The telco way of work with new “G”s every 10 years therefore needs to happen this way. For more short-term product development I would disagree with the approach, but the product people need a “platform” to work on – and a “G” is such a platform.
The problem I see with 5G and 6G, however, is that most of the use cases are still to be defined – and worse, the business cases are not clear – with a few exceptions. Most visionary use cases cannot scale and thus the business cases get very difficult – and players start waiting each other out.
Conflicting business interests: If everyone has the same or non-conflicting business interest, like the telco community had in the 2G and 3G era, it may be possible to agree on a number of common use cases that can be globally defined with the ability to scale. Having worked with pre-competitive industry environments like standards organizations and the GSM Association for years, mostly of the telco type however, this has proven great success in the 2G and 3G era. However, as standards have opened up to the internet and are becoming more IT-like, then players dominating in these areas and with different business interests naturally take a stronger position as well. While the GSMA and NGMN are dominated by the telco crowd, this is no longer the general situation – and key players include not only IT companies, hyperscalers and other software-based companies – but even other industry associations and standards bodies in which the web and internet are maintained – like e.g. IETF, W3C, IEEE, the WBA and others. In such a scenario, it can be difficult to achieve scale on use cases. There will be an increased need for commercial cross-industry collaboration and a stronger focus on handling the long-tail / B2B.
Alternative technologies: Having worked in the telco world all my life, I remember we were worried about new and “disruptive” technologies like e.g. WiMAX some years back. WiMAX did eventually not turn out to be a challenge, however, currently we may see similar developments. I commented on WiFi6 and OpenRoaming in an earlier article on “WiFi6 and 5G – Is 6 better than 5?”. The conclusion was yes and no, WiFi6 can be a competitor to 5G – but also a complement. Technology-wise it can be both, and business-wise as well. 5G could specifically be challenged in the B2B market and when combined with roaming. The players could be new ones, however – but also the same ones. On the core network side, the internet is not a new technology, but the dominant players are not the same – and the internet is a totally different ballgame. Refer also conflicting business interests above.
While the telco crowd is betting on a continued telco way of work with 5G, 6G etc, others may have broader ideas (refer my WiFi6 article above). Check out also some commentaries from e.g. Dean Bubley – an outspoken guy aiming to de-hype a number of aspects (see here, here and here).
Business interests and geo-politics
In my article on “5G? 6G? Hypes, geopolitics and business” I commented on how “politicized” all aspects around 5G have become – and not only 5G, also 6G – and it might not even originate from the right players. Everyone has a business interest – and all try to make the best of it. Telco suppliers most likely need another “G” to sell once every 10 years – so they have been pushing 5G for years already, towards operators obviously – but also towards regulators and governments – with more or less success. Governments on their side like to sell spectrum from time to time – so spectrum for another “G” is always a welcome contribution to the national budget. Operators on their side have not always resisted (perhaps they should have?) since they generally want to secure as much spectrum as possible for licensed mobile services, i.e. keeping others out. They might not actually need another “G” for some time, as they are mostly busy with the previous “G”, but every four years they need to prepare for another World Radio Conference and compete against other players – and end up paying extortionate prices for new spectrum. Finally, academia and researchers of course always enjoy something to spend time on – especially if they get government funding to do so.
Around 5G it has been interesting to see also how much national and regional politicians have engaged in its development and rollout. During the summer period of 2016 the European Commission set up the 5G “Sherpa” project (in which I took part) that ended up with the EU’s 5G Action Plan later in the year. The starting point for all of this was that “Europe has lost the lead on 4G – so we need to take back the lead on 5G” (the plan has, however, not succeeded – see also the latest comment from Ericsson’s CEO). There was not a question about if or why this had happened – but a statement of fact. Being a Norwegian myself, one of the real pioneer countries in mobile communications, I can sympathize with the grievance – but in my humble opinion it was due to own making, i.e. through failed policies and regulations – something that had been more successful in USA, China, South Korea and Japan. You can see some similar grievances by my old friend Bengt Nordström here from a Swedish perspective (unfortunately in Swedish only).
The political engagement has not stopped with Europe. Whether it is the USA, China, Japan or China, or others, they all want to “take the lead on 5G” – or 6G. See also comments in my geopolitics article where e.g. Japan wants to do the same for 6G (“as they lost out on 5G” - a little early to say?). The good thing with political engagement is that they put aside funding for research – but it is mostly about technology leadership – not necessarily about business needs. The battle for technology leadership has in some cases also seen more serious and globally disruptive actions like the geo-political trade war the US government has started towards China and in particular Huawei. I could provide a lot of references here, however, this has been so often in the press that I don’t believe it is necessary. Despite the ban on Huawei many countries have implemented as a result, Huawei has so far done not too badly, however, they are starting to see some effects (see here).
Interesting to note on 5G politics is that the previously mentioned Ericsson CEO went public on supporting his main competitor Huawei after the ban they received in Sweden. Officially his support was about fair competition, however, you could speculate that he was afraid of some form of retaliation by China towards Ericsson by banning them in Huawei’s huge home market China.
Moving towards 6G, as referred above, Japan wants to be a leading player on 6G – and in the USA, they have also set up a US 6G research group (see also the “Next G Alliance” here). In the EU they have done the same – and in China too – and recently also USA and Japan have agreed to cooperate on 6G. Huawei, on the other hand, despite the fact that China is pushing for 6G, probably because of the effects of the US ban, have recently started questioning 6G, focusing on 5.5G (which is a classical marketing trick to sell something new in the middle of a “G”-cycle).
The geo-political battle over technology leadership does not stop with 5G or 6G. Similar battles can be seen also for Artificial Intelligence, cyber security, quantum computing and more – which I will not get into here. I will also not get further into the battle between (mostly American) hyperscalers and European operators and regulators on taxation, market dominance, net neutrality, level playing field and more.
What is 6G about?
At this stage, 6G is only in its very early stages – and, if you ask me, what it is about is totally unclear! NGMN just released its first White Paper on it, giving some perspectives at a very high-level. This is to be expected - but what seems clear is that they foresee a continued telco way of work with a 10-year cycle. So what does NGMN say? They refer to three very high-level requirements: 1) supporting the UN SDGs, 2) offering new services – and 3) operational efficiency – and an important technical element is automation. These are nice and noble goals, but do not really make anything clear at this stage. However, I am quite happy to see that they offer similar ideas to what I have expressed here (and earlier) on the telco way of work with new “G”s.
While NGMN has been very vague at this point, I have seen more concrete ideas (dreams?) about technical performance criteria from research communities. One thing that has caught my mind is the reference to Tera-Hertz (THz) spectrum. Having built a few mobile networks, I see enough challenges with mmWave spectrum in terms of coverage – so going to THz adds another order of magnitude to the challenges – and use cases have to be totally different (and where is the business case?). In any case, 6G – if it ever happens – will not be there for another 15 years, I believe. The need for 6G is a debate also among others. See, for example this article by Telecom TV.
5G? 6G? Where is the end of the line?
I have commented on whether 5G is the last “G”, or whether every odd “G” is not needed – and on the very much changed ecosystem since the 2G and 3G era – and on the increased geo-political battle we have seen over the last few years.
If I backtrack to the 2G and 3G era that I played key roles in, this was a time when the world was going gradually from a fragmented situation with different mobile standards in different parts of the world towards global standards enabling global scale and interoperability – with huge commercial gains for operators, telco suppliers, handset vendors and many more. A great success story! It should be commented that there were commercial business interests resisting this development as well. An example (see also my earlier article on “5G will save the world – or will it?”): During the GSM (2G) development, there was a strong battle between European telco suppliers about which technology was “best” – but we ended up with a compromise – so no country or company had an initial advantage. In the US at the time, they had just gone from (finally) having some form of national interoperability with their analogue AMPS networks towards a new fragmented situation on digital – because they could not compromise on a digital standard. Eventually, US operators saw commercial sense, however, and adopted the (“European”) GSM standard – which provided national interoperability again - and also made GSM more or less global.
If we disregard the discussion about 5G or 6G being the last “G” for a minute, for some fun reading on the changing ecosystem, check out also the futuristic article written by an old friend of mine, Bill Best of Azenby, here. To summarize, he writes a future summary of the 2020’s – concluding that geo-politics have taken over and the world is again fragmented, with incompatible devices and networks – and a totally changed ecosystem.
Whatever the ecosystem will look like at the end of the 2020’s, however, we may see that the telco way of work will go on – or not. At least there will be challenges and competing interests. At this point, I would retain my earlier perspective that the telco world should concentrate on making 5G a success for now – and forget about 6G – at least publicly for now. It will take time. Maybe 6G will happen – but beyond a 10-year cycle?
Summary
The 5G hype is still great, with news in the media on a regular basis from telco suppliers and operators about new contracts and technical achievements – and there is a global competition about who has done what on 5G. On the other hand, there have also been various concerns in the media about 5G disappointments from consumers. At the same time, the global competition on 6G has also started – even before consumers, industries or societies have started to see any benefits from 5G – which will still take a few years to materialize. This is, however, normal practice in the telco way of work – which has been like this ever since 2G. The big question, however, is whether the telco way of work is sustainable going forward. I believe not – as the ecosystem has changed significantly since then. The question then is, if we see the end to the system, what is the last “G”? Is it 5G or 6G – or never?
The global bet on 5G is huge – so there is no doubt 5G will be a success – for some. The question is, however, who will get the benefits? It depends on who you ask (operators, consumers, industry, governments, telco suppliers, other suppliers, new entrants, etc). I am sure that someone will make money from 5G – but I am not sure it will be the operators. In the worst-case scenario, operators will at least be able to continue offering enhanced mobile broadband to consumers – but it might offer limited RoI. For the more industrial or societal benefits, the potential beneficiaries are more unclear. 5G will also see increased competition from alternative technologies and non-telco communities.
I am less convinced about 6G, however – as I cannot really see the same happening all over again – and the use cases and business case for 6G are still very much up in the air. Many of the early perspectives for 6G I have seen are only dreams and probably unrealistic – without any clear business ideas so far. It might be that 6G will eventually be the proper upgrade from 4G (like 4G was from 2G) – but it could also be that 5G will be the long-term viable solution. I really hope that 5G will succeed – as a lot of people have put a lot of money in it – many of which are my old friends. It will take time before the societal benefits from 5G will materialize, however, but who will eventually make money from 5G remains to be seen.
NGMN (where I also have a lot of old friends) has just released its first White Paper on 6G. It should be noted, however, that NGMN is the old telco club of mobile operators and telco suppliers working mostly in 3GPP, which obviously have their own interest in maintaining their telco way of work with another “G”. As every “G” opens up for new entrants, not only in the market but also in the standards community, it remains to be seen whether or not any other standards (or standards bodies and industry associations) will take over more and more.
Be it 5G or 6G, with a much more IP-based and IT-like network, it opens up opportunities for everyone, operators or others, to capitalize on this development, through e.g. disaggregation and open solutions. Many operators are also already working along the principles of SW telcos (ref. also this earlier article) – something obviously more or less resisted by telco suppliers.
I really don’t like to be the grumpy old guy and party pooper here – but maybe I really am. I see a lot of challenges for 5G – and even more for 6G – but a lot of people are betting on both – so I may be wrong. 6G also has a lot of political momentum, so it might happen, whether we need it or not …
Let us hope for 5G and see how 6G will turn out (if I am still around) !