What Happens After You Launch 5G

As 5G leaves the labs and gain the streets we should be looking into what will happen after launching so that we are ready once the unexpected happens.

As many as 15 million smartphone users in the UK are willing to switch to a 5G network

Telcos bet on connecting everything to recoup 5G costs

The potential is there and the dividends will be huge.

If 4G is any guide, according to Deloitte: 4G "...drove billions of infrastructure investment between 2012-2016 likely resulting in the upper bounds of the projected ranges of $73–151 billion in GDP growth and 371,000–771,000 new jobs."

No surprise countries are championing 5G. They are eyeing the 5G dividend.

5G is a data network that will be accessed wirelessly. Therefore, the all data nodes have to have higher throughput, else the wireless user experience would not feel the difference between today's LTE.

After almost a decade of discussion about transformation, 5G will make sure MNOs and vendors will transform for real.

Backhaul the ugly duck of 5G

The 5G operators' winners are going to be the ones who best prepared their fiber end to end backhaul architecture for it. More of that later.

If MNOs are going to launch and they did not invest on their fiber backhaul, end to end, you are in for a nasty surprise. The 5G Non-Standalone (5G NSA) will be launched but your customers will not feel the difference.

To effectively launch 5G NSA, the MNOs would be, right now, upgrading their end to end backhaul facilities. But it is a tough sell to ask the CFO for CAPEX for the backhaul ahead of a traffic that will materialize only after a couple of years.

And with MNOs diverting attention to the adjacencies, backhaul is way down the priority list.

Imagine now MNOs connecting billions of devices and you can guess where the focus will be.

You can never upgrade your end to end backhaul as fast as you deploy new RAN technology.

As the radio interface optimized for higher speeds start delivering to customers at a given site or cluster of sites, downstream, an immediate bottleneck will be created. That because as soon as that capacity is on air, the users start using it promptly. All of it.

The MNOs strategy is -as in the previous generations- to try to profit as much as they can from the real estate they are already seating on before they start densifying their network while the operators gauge smartphones supporting 5G pickup rate.

The 5G vendors’ interest will be to do a numbers' game counting the sites and cities where they are launching 5G NSA. That will work fine for the vendors but it will not be reflected in the MNOs' bottom line.

The traffic down the end to end backhaul will limit the speeds the users can enjoy.

Microwave is not going to cut it in 5G. You can read why in the Analysis Mason report. It is dated 2014, but the laws of physics have not changed since then. Therefore, MNOs planning launching 5G, should be cutting over traffic from microwave and massively connecting fiber optic to the sites earmarked for 5G NSA deployment and upgrading the sites routers to 10Gbps along the way.

If all the stakeholders are not lined up launching new technologies fail. 

MNOs and vendors are going to underestimate the backhaul.

They always do. Backhaul suffers from its roots of backhaul of fixed line telephone switches. Then, transmission was a cost of doing business. Fixed telephony vendors core business were telephone switches and transmission was given free of charge if the operators bought the telephone switches.

That stigma follows backhaul to this day. Vendors interest lies on Core and RAN. MNOs seeing that vendors see transmission as an afterthought, kept IP transmission in-house as they buy core and RAN access from the vendors.

Why vendors may neglect the backhaul, again?

The reason is that from 2G to LTE backhaul has always been part of the external ecosystem. Mobile came to age with transmission always being carried out by external partners. First by microwave vendors of PDH microwave and copper providers of fractional DS1/E1 and when higher capacities were required, moved on with upgrades of the microwave SDH and third-party fiber providers.

The backhaul stakeholders must be lined up before launching new technologies. The in-house transmission and the separated vendors' scope always pose extra challenges on a rollout.

MNOs that neglect fiber will fail

Take two nations at the forefront of the 5G race: Japan and South Korea lag rivals in fiber-optic speeds as 5G nears. Weak investment for upgrades risks national competitiveness in new technologies

The rollout of 5G NSA cannot be in parallel with fiber. It will take a minimum of 3 months to run fiber to sites while 5G NSA can be deployed much quicker. MNOs should be running the fiber spurs right now.

Once the congestion in the network percolates down the backhaul, the operators' Managed Services will be clamoring that the deployment is wrecking a havoc with the network and will ask for the sites 5G NSA to be locked to minimize the damage. More rollout drama will ensue.

The C-Suite will be up in arms for the following reasons:

·        They were not informed about the CAPEX required for the backhaul end to end to deploy 5G NSA

·        The MNOs techies will be diverting the blame to vendors because they failed to tell the C-Suite that they did not have backhaul capacity to carry the additional traffic.

·        The microwave department has to explain to the C-Suite why they have a few million dollars of microwave that were made technically obsolete by 5G NSA.

·        The fibre planners were doing independent fiber rollout plans instead of doing a single plan to cover all business units' requirements and can’t find a doable plan to solve the 5G imbroglio they themselves created.

Here is how you should solve the problem before it happens.

Until 3G, backhaul was straightforward. Transmission planners created aggregation points where the radio controllers would be deployed. Then built high capacity backhaul from the radio controllers to the core, from there they spanned a mix of fiber and microwave to the edge of the network.

For 4G, transmission planners reused as much 3G designs as they could. It was faster and it was what they knew how to do it. But 4G not having a radio controller created a difficulty to the transmission stakeholders. In 4G one needs to create new aggregation points while removing the older aggregation points at microwave sites that were, mostly chosen because they were in high places where the planners could shoot microwave towards the core and the fringe of the network.

5G needs new ways of thinking.

It is necessary to create a fundamental plan for fibre optic while signing offload deals with third-party fiber providers while the operator build its own fiber. MNOs cannot do that alone.

They need to engage the tower companies to connect fiber to all sites marked to go 5G NSA. The future of the Tower Companies is to become Fiber Companies. Enter in partnership with the towercos to build the fiber themselves as they can share that fibre among their tenancy instead of building their own fiber which would be underutilized.

The towercos towers won't lose revenue from removing microwave. That space, presently used by microwave, will be occupied by RRHs in the towers.

US Carriers will regret blocking Google Fiber.

Fiber passes less than one third of US houses. Google saw that as an opportunity, but "...entrenched broadband providers had found a new way to try and prevent Google Fiber from bringing much-needed competition into their markets: blocking access to carrier-owned utility poles.

The OTT has a big stake on 5G as they profit from faster Internet, they should be sharing the costs of building 5G.

Facebook has created a subsidiary called Middle Mile Infrastructure to sell excess capacity on its fiber The company made the announcement in a blog post by Kevin Salvadori, director of network investments. Facebook, knowing Google Fiber's fate, stated they would not be selling to customers.

If the US carriers had seen Google Fiber as part of the 5G deal, they would be in the catbird seat for 5G. They would have metro fiber ready for them to piggy back by partnering with Google Fiber. Now that is going to cost them.

Had Google Fiber been ubiquitous over these electrical pole lines -if you keep Google Fiber 5G Standalone would be a case of RRHs daisy-chained (at users' ears height so to speak) along the aerial fiber on pole lines.

Blocked by the US carriers by 2016 Google Fiber was no longer rolling out in new cities.

 The future of the Tower Companies is to become Fiber Companies

5G Standalone will kickstart much earlier than thought

Remember the users' experience?

If the users have 5G downtown, where the operators deployed 5G NSA, and drive home just to have to throttle back to 3G they are not going to be happy. Therefore, the operators sooner than 2025 will have to densify the fringes of the network and deploy 5G standalone.

Extending RRH to these neighborhoods will press for fiber deployment at the edge of the network. Here is where the operators are not covered and had better start collaborating with the fiber providers on these areas as it will be faster and less costly.

Beware of The Surprise Demand

No one had predicted pre-paid before 2G was launched. It was supposed to be old telephony. You use the service for one month with a fat long term contract. Get a bill at then of it. Then pre-paid contractless appeared and 2G exploded. We never know where the surprise demand for 5G will come from and what it will do.

Slow growth in 5G subscription addition is due to the lack of availability of cost-effective 5G smartphones in the first half of 2019. Samsung and Huawei launched highly expensive 5G smartphones.

What if Tablets will return now that users can get 5G speeds?

Can they be the surprise demand?

Tablets started with a bang but by 2014 it declined.

Tablets arrived too early. Sales tanked because 4G wasn't worth a dedicated device.

Samsung Won’t Give Up on Android Tablets. Neither did Huawei nor Sony

A foldable smartphone is a tablet disguised as a smartphone with a price a tag of $2.000+.

The tablet technology has evolved:

Digital Paper is the world's thinnest, lightest tablet, with a thickness of about 30 sheets of paper. The device is high contrast with no glare, making its screen much more visible in the bright sunlight than other tablets can achieve. Its battery can last for up to a week when Wi-Fi is turned on. It costs $600.

VCs should keep an eye on the Private Network space

There is another surprise. You build a Private Network today, you will make a killing. Once the Alex Mashinskys of this world -one whold see what he did in New York City subway- then it will get legs of its own, going into directions that, today, we are not foreseeing.

Then, by 2020's, we will see the era of MNOs buying successful Private Networks Operators, consolidating them into the MNOs fold.

Think about all the businesses' environments where there is a messy mix of fixed (wired) and wireless technologies. These are prime targets to move to Private LTE. While in the past the cost of going wireless was high, today cloud-based solutions have lowerd the cost of entry.

pdvWireless hopes to leverage its 900 MHz footprint for private broadband, including LTE to support narrowband uses for private networks such as utilities

Smartfren Indonesia, together with core-network partner Athonet, announced the commercial launch of its dedicated LTE network for one of the largest coal mines in the world.

Will Nextel essentially be reincarnated as a private LTE provider?

There are no idle people waiting for 5G to start up.

The MNOs are in the business of marketing and selling mobile services. What their CFOs are not seeing is that the MNOs have never got around the idea that they should not be involved with backhaul but they have been holding on to it.

Where will this people come from to upgrade the backhaul end to end?

Neither with the MNOs nor with the vendors are prepared to take it. As the backhaul became a split responsibility, as result, nether vendors nor MNOs are fully prepared to handle it.

They may say. we are surely prepared, and quickly change the subject, but it is just because they do not want to lift the carpet to contemplate what has been swept under it.

The vast majority of the job cuts you heard about in the last 5 years aimed to shrink the work forces of all major vendors -Huawei included- as they focused on R&D and the operations side of the business, the people who makes things happen, faced the knife.

Young people, with vendors and MNOS don't go into backhaul as they see it will not advance their careers. It is hands on. It is 'tough technical', pople dn't like 'tough technical'.

How to persuade CTOs to outsource the backhaul

The high costs of the bits being transported are preventing the digital economy to fulfill its promises while ARPUs are falling across the whole world for the past 10 years.

As a result of being the ugly duck of the mobile age, Transmission, Transport or Backhaul for short, did not attract people. The ones that remained in the industry are getting old and lots of them are microwave specialists and have their roots in the circuit switch, TDM world.

Recruiters, you should read this carefully, this situation I describe will come to haunt the 5G ecosystem. You should be prepared

To be fair Verizon hired former Ericsson CEO Hans Vestberg to oversee Verizon's fiber network and the development of Verizon's nascent 5G. He didn't stay there one year and after one year moved him up to be the CEO. No one wants to be in charge of fiber backhaul.