The pace of global 5G development will largely depend on adoption in APAC

Chris Nicoll

While every major market in the world has programmes focused on the development of 5G technologies, the pace of implementation of 5G technology globally will largely depend on how quickly key APAC markets adopt 5G.

The Asia Pacific region represents a heterogeneous area that includes very low ARPU (but large user population) countries such as China, India and Indonesia, but also some of the most technologically advanced countries in the world including South Korea, Japan, Hong Kong, Singapore and Australia, which are also the markets that are in 4G deployments including LTE-A.

There is a close association of key vendors in the region including Huawei, Samsung and ZTE that have headquarters and major R&D centres in APAC together with operators that are driven by technology leadership including KT, SKT and LG Uplus in South Korea, KDDI and NTT DoCoMo in Japan, HKT in Hong Kong, SingTel in Singapore, Vodafone and Optus in Australia to name a few. The mature market conditions and operator technology drive create ideal conditions for deployment of technology ahead of market or service drivers.  Even non-region located vendors such as Alcatel-Lucent, Cisco, Ericsson and Nokia are involved with 5G development efforts in the region.

Some key vendor’s broad product line strengths also offer technology development opportunities that are difficult to replicate in other markets. LG and Samsung are strong in home electronics and are developing smart home offerings. Huawei and ZTE offer mobile equipment, as well as fixed equipment, mobile devices, fixed terminals, and enterprise solutions presenting possible end-to-end 5G service portfolios. With the encouragement of the mentioned operators, the APAC region is poised for 5G leadership.

The scale of early 5G take-up in APAC will be a key factor in influencing the diversity, availability and pricing of 5G network solutions and devices worldwide. We expect APAC handset manufacturers, particularly Huawei, Xiaomi and ZTE in China, HTC in Taiwan and Samsung in South Korea, to drive the rapid adoption of 5G by offering affordable 5G handsets with more variety, access points, and modules for smart city, smart grid and smart car deployments, in addition to broader 5G consumer goods such as smart TVs, wearable’s and other consumer devices.

Ahead of the actual development of 5G, these five issues need to be addressed:

  • Operators and vendors both need to focus on two particular aspects of the 5G development process – ensure that the technical specifications are aligned with customer need, and ensure that the technology, including devices, is brought to market at the optimum time so that positive returns are made.
  • Operators need to be realistic about demand in their markets, their 4G investment plans and service opportunities. The expectations for 5G can easily obscure real business requirements and opportunities.
  • Operators will need to establish spectrum acquisition and valuation strategies for the higher frequencies being discussed for 5G, including 5GHz, 28GHz and 70/80GHz. These bands present unique challenges to deployment and operation, and valuation will need to be carefully considered.
  • Vendors and Operators both need to refine small cell deployment strategies. 5G small cells will play a significant role in providing coverage and will include spectrum above 5GHz requiring new engineering expertise, Massive-MIMO antennas, and intelligent systems to manage high-band radio interference.

Figure: Key drivers and requirements for 5G technology [Source: Analysys Mason 2015]

chart-1

 

Analysys Mason is the global adviser on telecoms, media and technology.

Further reading:

Preparing for 5G

http://www.analysysmason.com/Trending-Topics/Preparing-for-5G/

5G Worldwide Outlook

http://www.analysysmason.com/Research/Content/Reports/5G-worldwide-outlook-Oct2014-RDTN0/

5G will require new as well as established spectrum bands, but the availability of new bands is not confirmed

http://www.analysysmason.com/About-Us/News/Newsletter/5G-spectrum-Oct2014/

Author is Chris Nicoll

Chris Nicoll is the head of Analysys Mason’s Network Technologies and Enterprise and M2M research practices. His primary areas of specialisation include wireless access technologies, wireless traffic forecasting, mobile infrastructure and operator strategy. Chris has more than 20 years of expertise in defining telecoms strategy. Prior to joining Analysys Mason, he held  positions at ACG Research and Nicoll Consulting, where he developed marketing strategy and positioning for telecoms operators.  At Yankee Group, Chris was a member of the Yankee Group Research Council and provided thought to the research organisation. At Lucent and Alcatel-Lucent, Chris was director of strategic marketing, overseeing the company’s corporate positioning and messaging, including public affairs and analyst relations.

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