2/27/2018 What Will 5G Cost?

IP Carrier
IP Carrier
A chronicle of business model change and end user transformation in the global
communications industry.

What Will 5G Cost?

February 25, 2018

Will 5G cost so much more than 4G that the business model breaks? If orders of
magnitude more bandwidth have to be delivered, and if propensity to pay does not change
but incrementally, what happens to capex cost?

What happens if the number of cell sites grows two orders of magnitude?

The number of U.S. cell sites, for example, could balloon from perhaps 80,000 to as many
as a million, estimates Jack Waters, Zayo Technologies CTO.

What happens to backhaul costs? Will advanced radio arrays cost less, more or the same
as today's radios?

Some fear capital investment could be double to triple the levels of 4G. By other estimates,
5G will require just four percent higher capital investment than did 4G.

Those are huge uncertainties.

But cost parameters are changing so much that some expect 5G capital investment might
actually be less than 4G, even if the historic trend is that each next generation mobile
platform requires incrementally more investment.

Over the last several decades, infrastructure costs (transport and access) have dropped by
orders of magnitude, says Waters, referring to the cost-per-bit parameters.

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IP Carrier

source: European Commission

One reason is infrastructure cost improvements, including open source platforms that
inherently cost less than proprietary solutions.

Nokia and Facebook, for example, are working on 60-GHz fixed wireless platforms for
urban or suburban areas. Nokia expects to develop Facebook’s Terragraph network and
will conduct trials of the technology this year.

Combining Nokia’s wireless passive optical network protocols with Terragraph's mesh-
routing and multi-hop capabilities allows broadband providers to wirelessly deliver gigabit
services over wider areas with high reliability and meet growing demands for ultra-
broadband access, Nokia says.

Nokia and Facebook will also work together to accelerate IEEE's 802.11ay industry
standard, leveraging Nokia's Wireless PON and Terragraph's TDMA scheduling
capabilities, Nokia says.

Wireless PON is based on 802.11ad WiGig technology and provides a wireless drop for
fiber-to-the-home networks.

Access points can be easily mounted on utility poles, street lights or a building facade, and
deliver gigabit-per-second speeds to a self-installable WPON Home unit.

The point is that 5G capex requirements might not scale linearly as have prior network
generations, despite the heavy reliance on small cells and need for dense optical backhaul.

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In fact, unit costs for mobile data have been falling for some time.
IP Carrier

source: Analysys Mason

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