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5G - The Concorde of telecommunications?

The fastest may not always be the winner, and 5G is falling well short of the hype in most countries where adoptions are already underway.

Telecom workers installing a new 5G antenna system in downtown San Diego, California. The rollout of a 5G network would not be without massive capital outlays.

FOLLOWING recent rollout announcements by the local authorities, Singapore has been abuzz with excitement about the brimming possibilities 5G is supposed to bring. Honchos have touted the "vibrant 5G ecosystem" as critical to Singapore maintaining its spot as a globally competitive digital economy. But how much do we really know about 5G? And is it truly worth the hype?


5G, or 5th Generation, is a generic term used for new developments in the telecommunication space that are deemed "a step ahead" of existing 4G technology. Comparatively, 5G commits significant improvements to data speeds and latency - by boosting data speeds by 10 to 100 times - and targets 20 to 40 times lower latency, thereby reducing the round trip delay when a signal goes from one point to another.

In practical terms, 5G would enable one to download (legally, of course) an ultra high-definition (HD) movie in just a few seconds - in other words, at lightning speed - when compared to the time taken with current 4G speeds. Futurists imagine that, in the not so distant future, one can watch said movie while an autonomous car (powered by 5G too) drives him to work, where his office would be fully-automated and enabled with robotics.

Imagine a busy highway during peak hour. Now visualise said highway as a telecommunication network, and the travelling vehicles as data bytes. In order to ease the traffic on a busy highway, two things need to happen: (a) vehicles need to travel faster, while (b) new lanes are added to accommodate more vehicles.

Today, the 4G "highway" is already operating at full capacity. The limit has been reached. All of its lanes are jam-packed with vehicles travelling at their maximum speed.

Enter 5G - the equivalent of a wider highway, with capacity to accommodate more vehicles. But what is the use of more lanes without higher speeds? Fortunately, 5G makes use of Massive Multiple Input and Multiple Output (mMIMO) technology, which allows each vehicle to traverse at speeds 1.5 to 5.0 times faster than it used to.

The adoption of 5G technology is not without its challenges. This is especially so when using mMIMO technology, which necessitates the use of a high-frequency spectrum. Analogically, while wide, the effective length of an operational 5G highway is in fact very short.

This essentially means that telecom operators will have to keep adding multiple support structures to extend the length of 5G highways. In the real world, these support structures are called base stations and are used to extend wireless coverage.

Not only does 5G require a greater number of base stations, each might be significantly more expensive. It is conservatively estimated that we require 4.0 to 5.0 times as many base stations to sustain a 5G highway. Each 5G base station may cost up to 20 to 30 per cent more, and also consumes three times more power. Can you even imagine living in a world surrounded by so many base station structures?


Autonomous cars are a widely touted application for 5G. While most 5G players claim to operate at latency levels less than 30 milliseconds, it is still far above the levels required for autonomous cars to function (at 1 to 2 milliseconds). With that in mind, massive investments must be made in this area as well.

In short, the rollout of a 5G network would not be without massive capital outlays. More importantly, would consumers be willing to pick up the tab for the "conveniences" of 5G technology? We do not think so, unless 5G can help consumers access new conveniences, or cut expenses elsewhere. Enterprises, on the other hand, might be more willing to spend on 5G if it reveals new sources of revenue for their businesses.


The underlying use cases of 5G suffer from the same hype as 5G itself. Existing developments for autonomous vehicles, for example, are lagging a few years behind schedule. So far, vehicles are either driver-assisted or fully autonomous only on restricted pathways. The practical need for 5G is difficult to justify without developers successfully putting a fully autonomous vehicle out on the freeway.

In reality, speeds offered by existing 4.5G technologies are more than enough for most consumer and enterprise use cases. 4.5G acts as an effective conduit to address near-term technical challenges of launching 5G services, while retaining compatibility with existing 4G devices and infrastructure. To put it bluntly, the business case for a blanket adoption of 5G connectivity is simply too hard to justify. Enterprises might be early users of 5G on a specific project basis, but we don't think it is likely in the near term.

If history is any indication (read: The Concorde), the fastest is not always the winner.

5G is falling well short of the hype in most countries where adoptions are already underway. Mobile carriers have overstated what 5G actually brings to the table, and have oversold the prowess of its accessibility and connectivity.

Here are some examples: AT&T was recently criticised for tricking customers into thinking their existing 4G network is instead 5G, by simply changing the phone's network icon. Verizon's foray into the 5G market was also sub-par at best, with customers complaining about poor and patchy coverage. Closer to our shores, in South Korea 5G networks remain restricted to urban areas.

Heavy is the head that wears the crown. With mediocrity setting the stage for 5G rollouts, one cannot help but wonder - are the additional investment costs related to 5G really worth the price?

  • The writer is senior analyst at DBS Group Research.

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