Why The 5G Pessimists Are Wrong

Network operators that listen to the naysayers run the risk of missing out on the true benefits of this step-change technology

- Herbert Blum, Darryn Lowe And Alex Dahlke

Every decade or so, a new generation of network technology comes along that promises more speed, more capacity, more quality and more uses. With each generation, network operators invest capital to upgrade their infrastructure, with the firm belief that those investments will lead to more satisfied customers and reinvigorated revenues and profits. This formulation has been true ever since the scratchy and patchy early days of cell phone service in the 1980s; it has held up through 2G in the 1990s, 3G in the 2000s and 4G in the 2010s.

But this time around, something has changed. When it comes to the next generation, 5G, some telecom executives seem to have lost their faith in the power of technology to deliver more. They’ve become 5G pessimists. “The business case isn’t there” and “it will take too much capital” have become common refrains at industry conferences, on company calls with investors and in published interviews with telecom executives. A survey of recent public statements by executives of the 19 largest mobile network operators (MNOs) worldwide shows that while they share a belief in the long-term potential of 5G, more than half (53 per cent) see no near-term business case for the technology.

However, by not moving quickly on 5G, network operators run the risk of being left behind on a technology that has the power to dramatically increase network speed and capacity and give early adopters a competitive edge. This reluctance to commit to 5G is striking, given the potential the technology has to bring about a step change in network performance and thereby new uses.