MmWave 5G Economic Analysis Highlights Potential Benefits


For those who follow the evolution of the 5G market closely, one of the most widely debated issues concerns the benefits and challenges of the extremely fast, but limited range service possible with millimeter wave-based radio signals. (mmWave).

No one, of course, disputes the benefits of the enormous speed it can deliver – this week, in fact, 5G chipmaker Qualcomm, network equipment provider Ericsson and Australian telecom provider Telstra announced a staggering 5 Gbps throughput over commercial 5G. network, mainly via 5G based on mmWave. The problem is that the cost and the logistical challenges of making the service available on a large scale are extremely high.

Realistically, mmWave-based 5G was always going to be something that would be available in certain places and serve as a complement to the main connections that occur through various types of sub-6-based 5G signals (including what is commonly referred to as 5G “low-band” and “mid-band” – see “The 5G Landscape, Part 2: Spectrum and Devices” for more details on the sub-6 and mmWave radio spectrum). In fact, telecom operators around the world have been scrambling to figure out which combinations of different 5G radio spectra provide the best 5G service at the most cost effective. Here in the United States, the recent completion of the massive C-band spectrum auction is proof that these efforts continue. (See “CBRS vs. C-Band: Making Sense of Mid-Band 5G” for more.)

When it comes to mmWave in particular, however, part of the challenge has been trying to figure out exactly where to use the fast tech. The problem for telecom operators is that there are costs associated with acquiring licenses to use mmWave spectrum, costs of purchasing and installing the network equipment and antennas needed to transmit these. signals, and the costs of purchasing or renting access to physical locations where all of this equipment can be installed. In short, it is not a negligible investment.

Likewise, for government regulators trying to determine how much and / or what type of mmWave radio spectrum should be made available for use in their countries, there are important questions about how best to harness these valuable spectrum assets. , as well as the business models that need to be built to justify their decisions.

In order to answer these critical and difficult questions, the GSMA (Global System for Mobile Communications Association, an organization made up of more than 750 mobile operators and 400 other companies related to the telecommunications industry which organized the Mobile World Congress, among other activities) has just completed an in-depth economic study entitled “The saving of mmWave 5G”Which tackles these challenges head-on.

Specifically, the organization created a series of TCO (Total Cost of Ownership) models to determine the cost-effectiveness of deploying mmWave-based 5G service alongside existing mid-band-based 5G in a number of locations. different in different geographic regions. The industry organization reviewed potential deployments in dense urban environments in Europe and Greater China, Fixed Wireless Access (FWA, otherwise known as Wireless Broadband Service) in rural areas. of the United States, suburban Europe and urban China; and private networks for large companies.

What the models found is that, if the amount of 5G traffic that is handled on the mmWave portion of the total 5G service is greater than a certain minimum percentage, and the percentage of people using a service that includes mmWave is greater than a certain minimum percentage. at a certain threshold of market share (the two figures varied according to each of the different scenarios), then an economic gain by 2025 could be obtained. In particular, there were several situations where the decision to potentially deploy mmWave seemed very obvious. For example, in dense urban areas of China, the additional capacity that mmWave-based 5G would allow could translate very quickly into additional revenue for the operators who deployed it, even if the percentage of traffic carried on mmWave was less than 10% and the market share was 15%.

On the other hand, for dense urban areas in Europe, although the gain is still possible, it would take more than 25% of the traffic to be carried on mmWave and more than 30% of market share to obtain a reasonable cost advantage, this which might be difficult to achieve in the short term.

In the case of Fixed Wireless Access (FWA), the numbers were even more difficult due to the significant costs involved in deploying a network large enough to serve a large number of customers. If mmWave is added to a 3.5GHz-based mid-range 5G service, the situation improves a bit, although it still needs around 30% or more market share (i.e. say the percentage of customers benefiting from broadband via FWA) to achieve significant savings in the three regions.

Finally, in the case of private 5G wireless networks, the dependencies shift to the total percentage of mmWave 5G compatible devices that would connect to the network and the amount of concurrent use. The curves in this scenario are very different from others, in that even a relatively small percentage of devices using 5G could result in cost savings, but only if the simultaneous use of these devices reaches 20% or more.

The bottom line from all of this data is that there are certainly some situations where deploying mmWave to complement existing 5G midband-based services makes a lot of sense and other situations where the timing might take a toll. little more time. Of course, there are a number of variables that could potentially impact all of these models, but it’s interesting to see the GSMA providing an economic rationale for the technology. It’s an angle few people have seriously considered so far, but the results provide tangible advice that operators and government regulators around the world can take into consideration when making their own plans to deploy the option. fast mmWave 5G.

Disclosure: TECHnalysis Research is a market research and consulting company in the technology industry and like all companies in this field works with many technology vendors as clients, some of which may be listed in this article.

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