Device manufacturers are generating a lot of hype about 5G networking. After all, they want to sell next-generation systems capable of accessing and processing virtual reality applications and Internet of Things (IoT) applications that can process massive amounts of data over networks capable of delivering 10Gbps or more. As cool at that might sound, however, a new report issued by the GSMA this week at the Mobile World Congress Americas conference suggests that managed service providers shouldn’t expect to generate any revenue from 5G applications and network service any time soon.
Carriers are expected to start making 5G services generally available in 2019. The GSMA report, however, forecasts that it will be 2025 before 5G networks account for even half the networking services being consumed. In 2020 a total of four out of every five mobile connections will be made using a 4G network. That’s promising in terms of expanding the bandwidth for existing applications. But, next-generation augmented and virtual reality applications along with Big Data analytics applications being processed at the edge of a network will require access to 5G networks if they going to be deployed at scale.
In fact, GSMA notes that the roll out of 5G and the growth and usage of IoT will be closely linked. The report notes that it has already been forecasted that the number of IoT connections will increase fourfold between 2016 and 2025 in North America, reaching nearly 6 billion people. Much of that growth, however, will be dependent on access to 5G networks starting around 2020.
The winding path to 5G networking
Carriers such as AT&T and Verizon have been touting their investments in software-defined networks (SDNs) and network function virtualization (NFV) to provide the control plane that will be employed to respond agilely to the anticipated demand for 5G services. While that work has been progressing at an admirable clip, the rest of the telecommunications sector is moving considerably slower. Most carriers are not expected to be able to modernize the delivery of their network services until 2020 at the earliest. Charter Communications, for example, announced this week that in collaboration with Samsung trials for 5G wireless services will run through next year.
In fact, at the Mobile World Conference this week vendors such as Dell and VMware were making the case for deploying an NFV platform based on a commercial platform rather than trying to stitch together open source software to accelerate the roll out of those services. Even then, however, it will still take some time for a carrier to deliver 5G services. In most cases, 5G networks will first manifest themselves in the form of fixed wireless networks that connect a handful of specific locations. From there, the carriers will gradually expand to more 5G networking services.
None of this means that the future won’t be bright for advanced applications and services enabled by 5G networks. But, as IT futurist Paul Saffo once noted, citing old cowboy wisdom, the IT community should never mistake a clear view for a short distance. It will be quite some yet before MSPs encounter any meaningful revenue streams on the journey to 5G networking.