Global mobile operators are planning to accelerate their 5G network deployment time-frames resulting into increase in Capex, according to a TBR report.
The report indicates that 5G mobile service providers will be spending nearly $500 million in 2018, $2 billion in 2019, $4 billion in 2020, $8 billion in 2021 and $12 billion in 2022 for 5G launches as compared with lower estimates done earlier by TBR.
Several industry analysts believe that 5G will bring new revenue streams for telecom operators.
“One of the takeaways from Nokia’s Brooklyn 5G Summit was that the shift in focus across the ecosystem from LTE to 5G could be a catalyst for the operators that are still comparing OFDM efficiencies between LTE and 5G NR to justify the business case,” says Dell’Oro Group in its latest RAN forecast.
The improved 5G momentum is a positive. Dell’Oro Group has recently adjusted its 5G RAN expectations for 2018 upward from about $100 million to $150 million to reflect T-Mobile’s aim to cover 30 cities with 5G by year-end 2018.
“5G is up to 10 times more efficient on a cost-per-gigabyte basis compared to LTE,” said TBR Telecom Senior Analyst Chris Antlitz. “This is the driving force behind most operator commitments to deploy the technology thus far.”
TBR estimates over 85 percent of 5G Capex spend through 2020 will be driven by operators in four countries: the US, China, Japan and South Korea.
Most mobile operators in these countries have 5G rollout timetables and intend to leverage the technology for fixed wireless broadband and/or to support their mobile broadband densification initiatives.
TBR said the software upgradability of new RAN platforms to 5G will facilitate deployment at incremental cost, keeping spend scaling quickly but at a relatively low level compared to prior RAN generation upgrades.
Ericsson, a telecom equipment maker based in Sweden, has released its first commercial 5G RAN software, allowing global mobile operators to switch on 5G in commercial networks when ready.
Mobile operators which use Ericsson Radio System radios from 2015 onwards can install a remote software in order to run 5G NR technology cost effectively.
Cost of 5G smartphones will be a challenge for expanding the reach of devices to 5G customers.
Strategy Analytics, in a recent report said 5G smartphones will be expensive in 2019 and 2020, approaching $1000, due to their high technical complexity and normal early mover premiums.”