Release 18 and video growth could give 5G a boost

Three and a half years into 5G, telecom's biggest ever upgrade, the headline numbers tell contrasting tales.

On the one hand we see the biggest and fastest rollout ever. More than 200 operators have built networks, clocking up around 1.4 billion subscriptions.

But the expectations of new services and revenue growth have not yet been realized. 5G is a mobile broadband platform like 4G. The main variation is the popularity of fixed-wireless, offered by a third of all operators.

The disappointment with 5G's shortcomings is evident among consumers in China, home to the biggest rollout and subscriber population. One post on the Sohu.com tech page this week lamented that "there is no difference" from 4G.

The speed is not much faster, that prices are higher, and 5G has yet to spawn any compelling news apps or user experiences, the writer complained.

"All applications can be used under 4G, and basically all applications have a smooth experience at 4G network speeds. Whether using 4G or 5G, there is no difference."

How does 5G dig itself out of this?

Taking 5G to the next level

For what it's worth, vendors have high hopes of 3GPP release 18 and beyond, which they have dubbed 5G-Advanced or 5.5G.

Stefan Pongratz, head of Dell'Oro's mobile RAN and telecom capex research, writes in a blog that the industry believes the enhancements to the standard "will take 5G to the next level, creating a foundation for more demanding applications and a broader set of use cases."

Figure 1:

Release 18 includes AI and ML-based network automation, flexible spectrum capabilities like DSS, IoT advances including deterministic networking and NR-Light evolution (aka reduced capability) and satellite-terrestrial integration. But this is not going to happen quickly. Release 17 only dropped earlier this year and it will be another year before release 18 is concluded.

Pongratz further cautions that in order for 5G-Advanced "to become something more than just another 3GPP release, multiple things need to happen."

In particular, he says mobile data traffic needs to increase. At the current rate, as estimated by the Ericsson mobility report, data will grow at 30% CAGR over the next five years – an impressive-sounding number, but one that can be easily handled by existing networks and spectrum allocations.

Mobile video growth

We should point out Pongratz here is writing primarily for a vendor audience looking for future capex uplift – but this is also pertinent to operators. If they are not driving huge volumes of new traffic to their networks they are likely not growing revenue.

The obvious candidate for that kind of growth is video. Right now smartphone users typically spend less than 5% of screen time streaming videos, Pongratz reveals.

New VR, AR or metaverse services could trigger a change in behavior and "would from a RAN capacity perspective be a game changer, likely spurring massive capacity investments," he said.

The other important point in forecasting 5G, in Dell'Oro's view at least, is that the rollout period will probably extend well beyond the usual ten-year timeframe.

"Our baseline scenario rests on the assumption that the 5G [RAN investment] cycle will be longer and deeper than the LTE investment phase," Pongratz said.

Related posts:

— Robert Clark, contributing editor, special to Light Reading