We are realistically 18 months away from the introduction of 5G in most mature and even some emerging markets, and most of the big questions have already been answered. Most importantly, at least from a European perspective, the answer to the question "What is 5G for?" is quite clear: enhanced mobile broadband (eMBB), whose applications are tailored to smartphones and other portable device form factors, such as dongles, tablets, and laptops.
But as happened with 3G (wideband CDMA) and 4G (LTE), most of the industry is busy looking for the "killer app," though this time, the terminology used most often is "use case" – an industry-specific or vertical application. Without denying the usefulness of such research – which in the long run is fully justified – we argue that right now, the industry should think harder about how to build a proposition that will excite consumers and induce them to spend more on mobile services.
In the not-so-distant future, we are sure to have slices of 5G networks that are tailored to specific customers and industries. Some industries will benefit greatly from the technology's fast speeds and ultralow latency; for example, it's hard to think how fully autonomous driving (with zero human involvement, also known as "level 5") could work without fast, dense, responsive connections.
But more imminently, the industry needs to think about how to sell 5G to regular consumers, who will account for the bulk of the nearly 400 million subscriptions we expect to see at end-2022. The 5G investment case is at risk of falling into a vicious circle of patchily deployed networks, inconsistent end-user experience, and reluctance among customers to spend more – possibly a lot more – for their 5G devices and subscriptions.
Quite simply, customers will be prepared to pay more – and, eventually, premium rates – if they perceive the new network to be materially different to the old one. The way 5G is shaping up, at least for the first few years of deployment, will not support such a perception, because it is set to be rolled out and marketed largely as "4G + 1" in selected busy hotspots.
Communicating the value of 5G and making sure that customers perceive it will be critical, and a strategy has yet to be defined. How is low latency going to be explained and sold to end users? Are customers going to buy buckets at best-effort speeds, or will a minimum speed be guaranteed? Will operators sell content – their own or that of a third party – and will data traffic be included? There is much still to be determined, but the clock is ticking: some devices are set to come to market as early as 2019, and, quite frankly, the unanswered questions are still outnumbering the answers. So far only two have been answered: When? 2020. And what? EMBB.
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