5G
5G
5G
19 September 2018
Figure 1: Use cases that can be supported on 5G [Source: Analysys Mason, 2018]
Ultra-reliable low-latency communications frequencies. The initial global focus has been on
(uRLLC): Robotic manufacturing, autonomous low-frequency band of 700MHz, mid-frequency
vehicles, remote medical surgery and even band around 3.5GHz and high frequency band in
gaming are the target commercial applications 26-28 GHz range. There has also been some
for ultra-reliable, low-latency (<1ms E2E delay) interest in other mm-wave spectrum bands such
communications. uRLLC also targets virtual- as 39GHz, 42GHz and 66-76GHz for later
reality applications, but in more confined spaces deployments.
using wide-bandwidth channels (100MHz or
greater). Network equipment and device vendors view
global harmonization of spectrum for 5G as a
In the initial phase, 5G services are expected to key factor for the success of new 5G technology.
focus on enhanced mobile broadband (eMBB) Spectrum harmonization is particularly relevant
and fixed wireless access (FWA), and expand in the mm-wave frequency bands where
over time to other use cases and verticals. significant technological development has
occurred to enable 5G utilization in frequencies
that have not previously been used for mobile
The 5G Spectrum Priorities
technology (and hence, where entirely new
components are needed to develop a mobile
Globally, operators and vendors are investing
ecosystem for equipment and devices). Each
heavily to test the 5G technologies. In order to
use case utilizes a different combination of the
support the low latency levels, higher speeds
spectrum bands under consideration.
and larger capacity of 5G, spectrum allocation
and availability become critical aspects of
The spectrum bands available / proposed for 5G
implementation of this new generation of
deployments planned in 2019 varies by market.
network technology. The wide variety of 5G use
This is illustrated for a few countries in Figure 2
cases will need spectrum across different
below. Going forward, timely availability of
Figure 2: Spectrum bands for 5G deployment across multiple markets [Source: Analysys Mason,
2018]
sufficient 5G spectrum is expected to play a key While both a
role in enabling and incentivising operators to new access technology of 5G New Radio (5G
commit to large-scale network deployment and NR) and core network (5GC) are being defined,
investments. 5G provides possibility to deploy network in
different configurations. The 5G network can be
deployed either to work in conjunction with
Infrastructure Support for 5G
existing 4G core (as non-standalone 5G NR) or
The infrastructure needs of 5G technology will as a standalone 5G NR network.
be unique as the use cases have specific
architecture requirements. 5G is expected to be
flexible and scalable. The 5G network To support substantially higher data traffic and
architecture is detailed as below: provide seamless user experience in 5G, while
1 http://www.3gpp.org/news-events/3gpp-news/1965-rel-
15_news
Operators are likely to follow different paths to its telecom players in the 5G auction by means
5G launch, with choice between deploying non- of concessions to encourage telecom players to
standalone 5G NR (connected to 4G core) or enhance 4G coverage in various regions.2
standalone 5G NR (with 5G core). Some markets
(such as US) may look to launch non-standalone Commercial launches in some developed
5G to leverage existing 4G core network and markets are expected to be scheduled for next
accelerate time-to-market. Irrespective of the year. 2019 is expected to see 3GPP 5G Phase 2
two choices, there is expected to be marked Release 16. The 5G-NR standalone
improvement from 4G in terms of mobile specifications have fuelled steps towards
broadband speed and latency. commercialisation. USA, Japan, Germany, China,
France and the like will see pre-commercial
Since 2017, 5G has seen major developments – activity and major developments in auctioning
spectrum allocation, trials and attempts towards 5G. Trials and previews will enable operators,
pricing. Some of the key milestones along with vendors and governments to start formulating
the vision for the coming years are detailed in pricing and business models. At current pace of
Figure 4. developments, 5G services are expected to be
introduced in the leading markets before 2020.
Figure 4: Expected timeline for 5G commercial launch [Source: Analysys Mason, 2018]
2 https://www.reuters.com/article/us-germany-telecoms/german-mobile-operators-pledge-to-boost-4g-network-coverage-
idUSKBN1K222Y
The price differential between 3G and 4G
5G market potential in India devices has been reducing because of rapid
development of 4G device ecosystem and
shifting prioritisation of operators towards 4G
With promise of improved speed, latency and network roll-out. After 2018, we expect all
reliability, 5G has potential to enable new use 3G/4G device sales to be 4G-enabled, allowing
cases and transform many of the existing Indian 2G users to potentially upgrade directly to 4G.
industries. In short and medium term, it is Further, considering a replacement cycle of 3
expected to have a substantial economic impact years, we expect all existing 3G users to migrate
on Indian mobile broadband market and some to 4G by FY22. Thereby, 3G can be switch-off
in IoT space. In this section, we would present a and its spectrum can be re-farmed for 4G by
quantitative estimate of 5G’s potential impact FY22, a view also stated by many Indian
on these two sectors. operators in press releases.
In long term, full economic impact of 5G may 4G has picked up rapidly since FY16 and it is
extend to several more areas where its use expected to become one of the two dominant
cases are evolving (such as connected cars). mobile technology generation after 2G and 3G
However, given the uncertainty associated with switch-off by FY26, with other being 5G.
long term economic prediction of such early-
stage technologies, these would not form the Technology-wise evolution: 5G
part of this quantitative forecast.
India lagged developed markets in 3G launch by
Indian mobile market about a decade and 4G launch by about four to
five years. However, Indian mobile operators are
Driven by growth in mobile service adoption optimistic about launching 5G by end of 2020,
among new users as well as adoption of multiple in-line with expected launch in many of the other
SIMs by existing subscribers, active wireless leading markets. We expect initial deployments
SIMs in India have grown at CAGR of 6% over to be centred around eMBB.
last six years to reach 972 million in FY2018,
correspondent to population penetration of 73%. The adoption of 5G mobile broadband among
3G and 4G SIMs together contributed to about Indian mobile subscribers is expected to depend
37% of total wireless SIMs as of FY2018. We on several enabling factors such as availability
expect the market to keep growing, reaching up of affordable 5G-enabled handsets, affordable
to 1450 million active wireless SIMs by end of 5G mobile data packages, content ecosystem
FY2026. and 5G network coverage. There is limited
information on expected price of 5G-enabled
Technology-wise evolution: 2G, 3G and 4G handsets, but we expect only high-end mobile
phone models to support 5G initially. Data tariffs
Increasing adoption of data-services, driven by are expected to fall as the 5G technology
increasing coverage of 3G/4G networks, fall in improvements and spectral efficiency gains
data prices, and declining prices of 3G/4G reduce the cost per GB for operators. Such fall in
handsets, is leading to reduction in number of data prices along with increase in end-user
2G-only users. Introduction of low-priced 4G throughputs enabled by 5G would drive increase
featurephones is expected to substitute new 2G in mobile data usage. Proliferation of high-
handset sales. Therefore, by FY2025, we expect quality online content for masses, particularly in
all 2G installed device base to migrate to newer areas of high-definition/ultra-high definition
generations of technology (3G/4G/5G), allowing videos and AR/VR applications are also
operators to fully re-farm 2G spectrum. expected to be both a key driver and key
beneficiary of increase in mobile data usage.
In terms of 5G network roll-out, initial 5G Indian IoT/M2M market
deployment in 2020-22 time period is likely to
be limited to high traffic dense urban areas.
Ubiquitous urban and potentially rural coverage
may likely be achieved only by 2025. Expansion Indian Internet of things (IoT) and Machine-
to other use cases would follow in parallel, albeit to-Machine (M2M) market is currently
likely at a slower pace than eMBB. Such phased relatively nascent, however it represents a
approach to 5G deployment would also help huge opportunity for the future. It is
smoothen out the network investments over expected to have significant application in
time while allowing time for operators to observe
variety of industries including automotive,
and react to market and ecosystem
utilities, manufacturing, transport and
developments.
logistics.
To forecast the adoption of 5G, we have looked
at historical trends of adoption of previous The size of India’s IoT market is estimated
generation of technology (4G) upon introduction at 13.5 million connections as of FY18.
in India and in a sample set of 10 key developed Going forward, we expect significant growth
and 10 developing markets. Based on the in the overall IoT market, with total
historical benchmarks from 4G adoption, we connections growing to 300 million by FY26.
expect the 5G penetration in India to reach ~30 The service revenue of the total value chain
– 35% by FY26. This corresponds to about 440 is estimated at USD900 million for FY18
to 500 million active 5G subscribers by FY26. and expected to grow to USD7 billion by
FY26. The growth will be driven by huge
Figure 5: Historical trend and forecast of split of demand for ‘smart’ technologies enabling
active wireless SIMs by technology generation, interworking between large number of
including 5G [Source: Analysys Mason, 2018] machines and devices. This demand would
be met by supply-side network roll-out push
by operators and improvements in
technology fulfilling power, low cost and
network reliability needs of the IoT
applications.
Figure 6: Forecast of total IoT connections [Source: Figure 7: Forecast of IoT service revenues and split
Analysys Mason, 2018] across value chain [Source: Analysys Mason, 2018]
According to Ms. Harmeen Mehta, the Global Juergen Hase, chief executive of Unlimit,
CIO of Bharti Airtel, Smart City is going to be a Reliance ADAG’s IoT company, believes that
focus area for Airtel and the government can deferring the sale of 5G spectrum sale to FY20
play a big role in the space. would be beneficial in the long run because it
will allow critical 5G device ecosystem to
develop and will also lead to economies of scale
► Challenges to 5G adoption in India benefits once large-scale rollout happens in
other large and mature global markets.
As shown in Figure 11, a large proportion of the
respondents believe that an inadequate
ecosystem in terms of spectrum and handsets
Figure 11: Challenges to 5G adoption in India
(69%) and the financial burden on MNOs (68%)
[Source: Analysys Mason, ETTelecom]
are the major challenges to 5G adoption in
India. Moreover, 89% of the respondents
working at C-level roles believe the financial
burden on MNOs to be a major challenge. Some
respondents mentioned telecom infrastructure
as a major challenge as well –
The TRAI Secretary, Mr. Sunil K Gupta, believes As in Figure 15, 53% of the respondents believe
that 3.3GHz-3.6GHz spectrum bands would be legacy technologies (2G and 3G) could still co-
important for the provision of high-speed exist with 4G and 5G by 2025, while 40%
bandwidth services considering the requirement believe they will be replaced. However, 67% of
for ultra-high-speed broadband, Machine-to- the C-level respondents believe legacy
Machine (M2M) offerings and newer technologies will be replaced and, on the other
applications. hand. Several users also point out that while 3G
will be replaced, 2G will continue to co-exist –
► Technologies crucial towards the • “2G will continue for voice services while
deployment of 5G in India 3G might die off.”
According to the respondents (Figure 14 below), • “3G can be replaced and 2G could be
fibre backhaul (68%) is clearly the most there for voice calls purpose if no 4g or 5g
important technology which could be crucial coverage in that specific area.”
towards deployment of 5G. Ultra-dense network • “Can't say about 3G, but 2G still has
of small cells (50%) and Massive MIMO (48%) are applications in low power device. The key
other technologies that respondents believe challenge for low power device
could be crucial. Moreover, 82% of the manufacturers is power management and
respondents working at MNOs believe fibre 3G, 4G, and 5G needs lot of power to
backhaul to be a crucial technology, while 85% of operate.”
those working at telecom equipment vendors
believe the same.
Figure 14: Technologies which could be crucial towards deployment of 5G [Source: Analysys Mason,
ETTelecom]
Impact of 5G deployment on the Telecoms
Figure 15: Role of legacy technologies (2G, 3G) by
2025 [Source: Analysys Mason, ETTelecom] industry
“Although we have not reached a stage where 5G is the immediate need of the hour, we are
not laggards in the work that is being done on 5G. We are not in those times when we started
our 3G and 4G years later than others.”
“We are seeing a couple of challenges like Right of Way (RoW) and the need to have a robust
backhaul. Only 22% towers are connected to backhaul. 5G needs fibre.
Infrastructure sharing is another area that needs focus.”
“Our view is that spectrum is a perishable resource and if it is not used today, it cannot be used
tomorrow.”
- Mr. R S Sharma, TRAI Chairman
“Our network is already geared towards 5G given deployment of vEPC and massive MIMO”
“Airtel may be leading on energy and utility side (in the IoT space) but is going to be heavily
involved with the automotive side as well. Smart City is going to be a focus for Airtel”
“5G spectrum auction should happen only around the second half of 2019 by which time telcos
could stabilise from their current financial stress and the 5G handset ecosystem could develop
further”
- COAI
Further reading
Analysys Mason regularly publishes reports and articles about 5G. The following reports (and others on our
website, http://results.analysysmason.com/search?w=5g) are available free of charge (samples only for
the reports):
Unlocking 5G
http://www.analysysmason.com/About-Us/News/Newsletter/unlocking-5g-Apr2018/
The 700MHz band may largely be used for mobile in Europe by 2020, but 5G everywhere by 2025 is
unlikely
http://www.analysysmason.com/About-Us/News/Newsletter/the-700mhz-band-by-2020-Jul18/
ETTelecom.com, a part of India’s top business daily, The Economic Times, is a telecom intelligence
media vertical focused on delivering news, information and data-driven tools to professionals in the
industry to help them make smart decisions about the sector. Launched in October 2013,
ETTelecom has grown into a one-stop destination for telecom professionals with its deepest and
widest sectoral coverage spanning across countries. With a daily newsletter subscriber base of 1.5
lakh, it has 3 million monthly unique page views.
ETTelecom.com organises webinars and conducts surveys to engage the telecom industry. In
addition, it has now established two annual event properties – ET Telecom 5G Congress and
ETTelecom India Mobile Conclave (IMC).
Editorial Contacts:
Physical Address
Times Internet Limited (Times Center), FC - 6, Sector 16 A, Film City, Noida - 201301
Uttar Pradesh, India
About Analysys Mason
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