By Jared Council
Fast, or some variation of the word, is often used to describe
the speeds promised by 5G.
The same cannot be said about the rollout of 5G networks in the
U.S.
The promise of fifth-generation wireless networks has drawn
headlines for at least three years, but 5G that lives up to the
hype has yet to arrive for most Americans. All of the major U.S.
wireless carriers say they have nationwide 5G service, but industry
analysts say that service is largely indistinguishable from 4G LTE
service. Wireless services with speeds notably better than what's
available today may not reach most Americans until later this year
at the earliest, research firm Evercore ISI forecasts.
"Overall, you're looking at some time in the end of '21 to end
of '23 to get two-thirds of the country's population covered with a
5G service that's notably better than what is currently out there
on 4G," says Evercore analyst James Ratcliffe.
That time frame means the first carrier isn't expected to reach
two-thirds of the country with significantly higher-speed 5G until
30 months after the first 5G-capable phones made their debut in
mid-2019, Mr. Ratcliffe says, compared with about 18 months for 4G
following the launch of the first 4G-capable phones in fall
2010.
A combination of factors play into the relatively slow rollout
of 5G, analysts, academics and former industry executives say. Some
of the problems involve network infrastructure: The availability of
space in the portion of the airwaves that strikes a balance between
fast transmission speeds and long signal ranges is limited. 5G also
requires deployment of new network equipment, a sometimes
cumbersome process. And much of the new equipment isn't
manufactured in the U.S., meaning purchases can take longer than
buying domestic.
Industry observers also cite the lack of killer apps to spur
demand and drive adoption the way mobile video did for 4G. And
while telecom companies have recently started allocating billions
of dollars in capital expenditures for 5G, they likely won't speed
up build-out efforts until there's clarity around future 5G-related
revenues, says John Roese, chief technology officer at Dell
Technologies Inc. and a former executive with companies including
Huawei Technologies Co. and Nortel Networks Inc.
"They got burned once before," Mr. Roese says, referring to
telecom carriers' disappointing returns on their investments in 4G
networks, which he says mostly benefited technology companies that
offered apps and other services over those networks. "So they're
very cautious about it."
Spectrum squeeze
5G signals are carried over three general categories of
airwaves: low-band, midband and high-band spectrum. High-band
spectrum, also known as millimeter wave, has the highest speeds and
greatest bandwidth but the shortest range. Low-band has a longer
range but lacks in speed. Midband is considered the sweet spot in
terms of range and speed.
Verizon Communications Inc., AT&T Inc. and T-Mobile US Inc.
all say their 5G networks today cover more than 200 million people,
enough to qualify as nationwide service. But this coverage depends
partly on low-band spectrum, limiting its speed.
The carriers are now focused on midband spectrum, doling out
huge sums in a recent government auction of space in that section
of the airwaves. The problem for carriers is that the midband range
of the wireless spectrum is already widely occupied by U.S.
government agencies and other entities, for uses including military
communications, weather services and more. Only a relatively small
portion has been made available to telecom companies so far.
Access to midband spectrum had been hampered by turf battles
among government agencies. The government is now making up for lost
time, selling $81 billion of midband spectrum licenses earlier this
year with another auction planned for this fall.
Stefan Pongratz, an analyst at Dell'Oro Group, says that when
telecom operators first started preparing for 5G nearly a decade
ago, the prevailing thought was that 5G would primarily use
millimeter-wave, or high-band, spectrum, which sits in a part of
the spectrum that was largely unoccupied.
But millimeter-wave 5G requires the greatest density of cell
towers to be effective, he says. Adding density takes time. It
wasn't until recent years that attention in the U.S. turned to
midband spectrum as a way to bring 5G to market faster, he
says.
Where's the profit?
The lack of killer 5G applications is another major drag on
deployment, says Brian Kelley, an associate professor of electrical
engineering at the University of Texas at San Antonio.
"That, at the highest level, is the single largest factor
guiding the pace of development," says Dr. Kelley, a former
Motorola engineer who is also the principal investigator for an
experimental 5G network site at a military base in Texas for the
Department of Defense.
The three main benefits of 5G are that it offers faster speeds
-- up to 100 times faster than 4G -- that it can support a huge
number of simultaneous connections and that it enables
significantly faster response times between machines, says Craig
Moffett of media and telecom research firm MoffettNathanson
LLC.
"There aren't revenue models associated with any of those three
things yet," Mr. Moffett says. "It's not clear that consumers, for
example, would be willing to pay anything extra just to be able to
download videos faster."
Mr. Moffett says businesses will likely be the biggest early
adopters of 5G, which could allow them to seamlessly connect
sensors and other internet-of-things devices. Their use will likely
take the form of private 5G networks, which he says "can be thought
of as a next-generation Wi-Fi network, with better speeds and
security, and ability to handle more connections."
But the question, he says, is "are the carriers going to build
the [private] 5G networks that enterprises use, or are enterprises
going to build them themselves?" This matters, he says, because if
companies opt to deploy private 5G networks without carriers, the
carriers could miss out on revenue that could spur greater 5G
infrastructure investments.
Equipment issues
5G at its best is a fundamentally different network than 4G,
partly due to the implications of transmitting over higher-band
spectrum. That means it requires different technology and equipment
that have to be installed -- not a simple process.
Installing new equipment can involve finding a site, getting
proper permitting and, in some cases, digging up streets to deploy
the fiber-optic cables that carry data to and from cell towers,
says Mr. Ratcliffe of Evercore.
Much of the physical work needed to get cellular networks up to
5G standards isn't expected to ramp up until 2022, according to
Edward Gazzola, chief executive of Atlanta-based
structural-engineering firm Bennett & Pless Inc. The
coronavirus pandemic and technical hurdles added to the delay, he
says, including a period when carriers were waiting for engineering
standards to be better defined before buying new equipment.
Availability is also an issue in the equipment market. When 4G
made its debut around 2010, there were about a dozen technology
providers offering wireless network equipment, says Dell's Mr.
Roese, including Nortel in Canada and Motorola in the U.S. Today,
the global provider market comprises five main players: Nokia,
Ericsson, Samsung, ZTE and Huawei. "Two are in China. One is in
Finland, one is in Sweden and one is in Korea," Mr. Roese says,
adding that there are more regulatory hurdles associated with
purchasing telecommunications equipment overseas.
New players are entering the market since the U.S. government
effectively blocked market leader Huawei from selling its equipment
in the U.S. over national-security concerns and pressured countries
around the world to follow suit. For now, though, the big five
dominate the equipment market.
Ericsson is emerging as a top alternative to Huawei,
particularly with a new type of 5G equipment known as massive
multiple-input multiple-output, or massive MIMO. But these
transmitters, which make it easier to deliver 5G on existing cell
towers, require computer chips, and the semiconductor industry of
late has been battling supply shortages.
Mr. Council is a Wall Street Journal reporter in New York. He
can be reached at jared.council@wsj.com. Drew FitzGerald, a
reporter in Washington, D.C., contributed to this article.
(END) Dow Jones Newswires
May 25, 2021 10:14 ET (14:14 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Samsung Electronics (PK) (USOTC:SSNHZ)
Historical Stock Chart
From Nov 2024 to Dec 2024
Samsung Electronics (PK) (USOTC:SSNHZ)
Historical Stock Chart
From Dec 2023 to Dec 2024
