The hype machine is in full swing with the latest standard in mobile telephony — 5G. This is the fifth generation of wireless, mobile broadband communications. It should not be confused with 5 GHz Wi-Fi, which is sometimes erroneously referenced as 5G. This 5G is a whole new ballgame and promises to be a revolution in how we live our daily lives — not merely an evolution of versions past.
The cellular communications world self-references in terms of which generation of the technology is being used for signaling. The first generation, 1G, brought us voice in a mobile platform; 2G brought us text messages, 3G brought us the mobile Internet, and 4G long-term evolution (LTE) gave us a speed increase of 10x over 3G.
Although, the theoretical maximum data rates delivered with 4G modems top out at a remarkable 2 Gbps, 4G download speeds here in the U.S. average only about 30 Mbps, as shown in Figure 1 — and upload speeds are significantly lower. The upstream side is generally used as a control plane rather than a data plane.
To put this in perspective, a 1080P HD movie requires about 5 Mbps to stream without significant buffering delays. With aggressive compression, Netflix recommends at least 25 Mbps for 4K format video (3840 × 2160 pixels). This means that 4K video is not achievable with the average mobile broadband speeds here in the U.S. even though many modern smartphones are capable of 4K screen resolution.
5G NR (new radio) modems have a maximum data rate of 20x the maximum 4G LTE speeds, so 5G could theoretically deliver up to 20 Gbps wirelessly. More realistically, we could expect speeds in excess of 200 Mbps in the short run and much faster as the network gets built out, as shown in Figure 2. This can potentially open new markets such as 4K streaming to mobile devices like smartphones and tablets.
The cellular carriers (“telcos” or telephone companies), to increase market share, emphasize the speed and reliability of their networks as their primary selling points. Since the smartphone market is fairly saturated at this point, the only way for the carriers to increase revenue is to either steal subscribers from other carriers, typically via cost cutting, or to expand into new market areas. Of all of the potential new markets, eliminating the “last mile” problem and servicing the growing Industrial Internet of Things (IIoT) market (estimated to be in excess of $751.3 billion by 2023) are both hot possibilities.
In order to provide service to an individual’s home or business (the last mile), the service provider needs to get the signal out of their network and deliver it to the destination. For the telcos this means from the local exchange’s facility to the destination (referred to as the point of demarcation or the DMARC). The DMARC is where the service provider’s network ends and the customer premises equipment (CPE) begins.
This is troublesome because this last mile is traditionally serviced with copper or fiber-optic cabling, which is incredibly expensive to lay and to maintain. Therefore, it would behoove the service provider to deliver high-speed service wirelessly and eliminate the cost of the fixed cable plant. This also enables delivery of services to areas where it would otherwise not be cost effective due to low customer density, such as in rural areas or to new housing or building developments. In the telco business, this wireless model is referred to as fixed wireless access (FWA) because the destination is fixed, not mobile, as shown in Figure 3. The FWA market is expected to grow at a Compound Annual Growth Rate (CAGR) of approximately 84% between 2019 and 2025 eventually reaching an estimated $40 Billion.
Once service can be established, the cellular signal becomes a means to deliver additional services known as over the top (OTT) services. For example, to be the carrier offering Netflix, Hulu, or YouTube TV services to customers rather than just traditional television channels. This gives the customer additional choices with a lower price than what they would find with many of the classic bundling services found in the cable industry. We could even see the cable industry using the telco’s infrastructure to deliver OTT services to traditional cable service customers.
With FWA, service into the customer’s premises could be accomplished via a 5G to Wi-Fi gateway. Another option is bringing the 5G service directly into the premises via a signal booster or repeater. However, that would supplant existing Wi-Fi interfaces in devices such as laptops and other consumer electronics and would require a significant change in hardware design.
The Real Jackpot
While the carriers like to throw around numbers related to how fast the 5G network will be for users’ mobile devices, their real bonanza is in machine-to-machine (M2M) communications for the Internet of Things (IoT). This market segment is expected to experience a CAGR of 54.3% from 2021 to 2025, as shown in Figure 4. However, IoT devices do not need multi-megabit services. Many IoT applications are fine with data rates in the tens of kilobits per second. However, IoT applications used to control devices like door locks, interior lighting, industrial process controls, and robotics are latency sensitive.
Latency is the amount of time between when a command is sent and when data actually starts to flow. Users experience this as a lag between when they hold their access card to the door reader and when the door actually unlocks for them. A second of lag might be acceptable, but 20 seconds is not tolerable. Each M2M application has its own acceptable latency, ranging from a few milliseconds to even microseconds. Typical 4G LTE networks, have latencies from 50 to 100 ms. While that is likely acceptable for turning on overhead lights, it would be intolerable for applications like autonomous vehicles. For example, a vehicle traveling at 60 mph (96.56 km/h) would traverse almost 8.8 ft (2.68 m) in 100 ms. This could be disastrous if the vehicle was trying to determine if the object ahead was a pedestrian and it needed to stop quickly. So, autonomous vehicles are another of the primary markets for 5G technology with its 1 ms latency.
There is another dimension to consider for industrial applications — reliability. The current 4G network is at 99.8%. So, a dropped call rate of 0.2% is considered a super-reliable, carrier-grade mobile network. But, the reliability requirement for industrial applications is typically estimated at six-9s (99.9999%). 5G networks can deliver that level of reliability by using cell duplication, the clever use of radio spectrum, and massive MIMO (multiple-in, multiple-out) antennas.