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Canadian 5G rollout will require new business models


May 8, 2020  


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May 8, 2020 – There’s a misconception in the market that the advent of 5G wireless, with its exponentially higher speeds, is going to mean smart buildings and communities will be able to rely more on wireless connections and less on fiber. While the many use cases for greater wireless consumption are true, 5G cellular networks will require a higher density of wireless cells to support high-speed coverage, which in turn means a higher reliance on, and density of, fiber to support more wireless cells.

Fiber won’t be competing with 5G wireless. Rather, it will act as the ideal complement to 5G, enabling high-speed products and services. Existing 3G and 4G cellular networks have fiber connections to cells that are hundreds of metres or even several kilometres apart. For 5G, the distance between cells will drop to the 10s of metres in dense urban areas or even buildings. And each of those cells will require fiber connections to support high-speed service.

Buildings are deploying increasing numbers of Internet of Things (IoT)-based sensors to control and track heating, cooling and lighting to create more efficient, comfortable environments. And Canadian communities are deploying IoT-based sensors to monitor traffic, parking, water, electrical usage and other applications that haven’t even been imagined yet, to collect data and generate new insights that result in more efficient, liveable towns and cities. Sensors and applications will drive massive demand for hyper fast and hyper data and fiber will be there, at the small cell or access point, to carry it.

All these sensors generate data that needs to travel to a collection point where the data can be stored and analyzed by software. Globally, research firm IDC predicts that by 2025, there will be 41.6 billion IoT-connected devices generating 79.4 zettabytes of data. Moving that data from IoT devices to collection points will require a significant amount of bandwidth, which means denser 5G, which in turn means denser fiber networks.

Historically in Canada, we have relied on the traditional telecom carriers to build out their own fiber networks and offer their own services over that infrastructure. But as the use cases, “killer apps” and commercial models that form the promise of 5G are yet to be invented, the business cases for traditional wireless operators to significantly invest in rapid high-density 5G networks for the “if we build it, they will come” commercial models poses a challenge. Instead, we will need other companies to help build out more fiber.

Markets where fiber infrastructure providers may make more sense include less populated cities, where there may not be sufficient population for multiple carriers to justify building their own separate fiber networks or small cell footprint, as well as densely populated urban cores, where there may not be enough real estate to aesthetically house multiple cells and antennas from different carriers.

Instead of each existing telecommunications company building out new fiber networks and associated wireless cells, a neutral party with its own fiber network and supporting small cell infrastructure could enable multiple telecom companies or 5G applications to use its network. This has a number of potential advantages…

It saves the existing telecom companies capital because they don’t need to invest as much in their own infrastructure as the cost can be shared with a neutral third party, making 5G and smart city rollouts more economically attractive.

It accelerates the innovation of 5G applications and use cases, because the heavy infrastructure only has to be built once and can then be shared and made available economically to companies that require the network bandwidth.

It results in fewer fiber-based construction projects and disruptions causing fewer headaches for city residents.

Fiber infrastructure providers can help existing telecom carriers offload some of their costs and free them up for service innovation, just as the ubiquity of 4G- and GPS-enabled smart phones externalize the infrastructure cost that was so imperative to Uber’s business model. Uber would never have existed if the company had to bear the burden of the underlying infrastructure ubiquity. It would simply be too costly. Similarly, 5G providers will be hard-pressed to offer ubiquitous high-speed services in every Canadian market and premises, but they can maximize their footprints by leveraging shared infrastructure as much as possible.

5G and smart building/smart city services are still in their infancy and it will take some time before governments, cities and telecom providers figure out which deployment models offer the best combination of service, convenience and cost-efficiency. At the end of the day, it’s very likely that around the world, the deployments that occur will look very different from the models we’re accustomed to.

About the author…

Sanjay Sachdev is the president and head of the fiber business unit at Aptum.

This article—along with other great content—appears in the February 2020 edition of Buildings IoT Canada Magazine.