Ericsson Hypes 5G After Telcos Slam 5G Hype
Show me the money
As it happens, the latest forecasts seem credible, assuming that 5G technology does indeed get launched in 2019 or 2020. Ericsson's headline prediction is that the world will have about 1 billion 5G subscriptions by 2023, or about 11% of total mobile subscriptions by that date. Bengt Nordström, the CEO of the independent Northstream consulting business, thinks operators will upgrade between 12% and 15% of their networks every year and that it will therefore be seven to ten years before 5G is widely deployed. Given that operators in some emerging markets will probably lag -- Ericsson itself thinks Africa will have no more than 2 million 5G subscribers by 2023 -- the global 5G forecast does not look ridiculously optimistic. (See Ericsson Forecasts Lackluster 5G Take-Up in Africa.)
Earlier in November, Ericsson's new CEO, Börje Ekholm, wouldn't project any sales numbers for 5G for the vendor in 2018 or 2019, instead looking to 2020 or after. "We expect to see some sales, but it will not be significant ... We don't know the timing yet," he said of 5G expectations in an interview with Light Reading in New York. (See Ericsson's CEO on 5G, Managed Services & Keeping Subscribers Happy.)
There are two big questions for an operator audience, and on those Ericsson's mobility report has little to offer. First, what kind of 5G are we talking about here? A new radio that can be attached to an existing 4G network to boost connection speeds and reduce latency? Or an entirely different network architecture that makes use of the cloud, edge computing, artificial intelligence and other groundbreaking technologies to give operators a radically different modus operandi? If it is the former, then 5G will only ever be an "evolutionary" technology, as far as Deutsche Telekom is concerned. Yet the latter will not materialize quickly unless the industry gets cracking.
Second, how do 1 billion 5G subscriptions assist operators? Sure, the technology will help them cope with giddy rates of growth in mobile data traffic, even if it is just a new radio standard. Yes, it should support new types of connectivity service for enterprise customers, and deliver a boost to industrial productivity. But it probably will not similarly bolster telco service revenues, market watchers predict. If 5G is to spur growth in profits, and satisfy investors, it may have to deliver much greater efficiency in all parts of the network.
The two questions, of course, are related. Only when 5G extends beyond new radio will telcos get more automated and profitable networks. Gauging the full benefits is not easy while so much has yet to be addressed on the technology side. Yet Ericsson could make a start. Providing some insight might help it to curry favor with telcos that have increasingly been drawn to Huawei in the last few years. It needs their approval now more than ever.
— Iain Morris, News Editor, Light Reading