Banking on 5G – Don’t hold your breath

By RSAWEB Co-founder Mark Slingsby

5G vs FTTH – it still appears to me that dividing the 5G throughput promises over any significant number of customers is going to deliver speeds similar to LTE unless there is serious tower densification.

The likes of AT&T are talking 20-times the number of towers to deliver on the promises of 5G, and that seems a long way off.

Rain proved that their fixed-LTE offering did not cut the mustard as towers quickly became overwhelmed when approximately more than 100 users connected – by my estimate – and then the service degraded beyond anything usable at 19:00. Of course if you’re the only one using the network, your speeds look amazing.

Give me Wi-Fi and FTTH, however, and I’m only dividing the bandwidth in my own home, not amongst hundreds of other users with thousands of devices over an area.

It offers a throughput and latency that 5G only dreams of. A potential future play is seeing mobile operators buying fibre network operators – allowing 5G and Wi-Fi to merge into a more seamless technology and commercial product.

5G use cases

5G will enable a different way of doing other things. Demos of driverless cars with smooth flowing traffic, smart factories, remote surgery, and advanced virtual reality are all promises.

Home Internet is already being solved, though, so no 5G is needed.

Is the only use of 5G to therefore convince municipalities that mobile operators must be allowed to install more towers?

This will just increase capex costs and keep data pricing high – as mobile network operators keep telling us.

Fibre-to-the-home

The accidental deregulation of VANS licence holders to become ECNS and ECS licence holders in 2005 allowed the market to flourish and the only reason we have a competitive fixed-line alternatives to Telkom.

One may argue that it is premium areas that receive fibre first, but I would counter that nobody would have fibre-to-the-home if Telkom was left to its own devices.

Fibre operators – Octotel, Vumatel, and so on – are delivering fast, forcing the sleeping giants – Telkom, Vodacom, and MTN – to wake up and are expanding into lower-income areas as they scale and costs drop.

The continued spectrum debacle also highlights the issue of a lack of effective government participation since 1994, with successive ministerial appointees continuing to scupper any meaningful policy momentum – as anyone remotely competent in the communications department was replaced or moved to another portfolio.

Additionally, the WOAN promise is deeply flawed – watch this space for mobile network operators and MVNOs being forced to use another BEE-enrichment entity for spectrum access.

The government needs to realise that after 25 years it has continued to destroy value and jobs in every sector it is overly-involved with (SAA, Eskom, Denel, etc) and the only way out is competent, intelligent, and light regulation that opens markets, not knee-caps them.

The ANC have proven time and again that they are incapable of navigating any complex issues competently and the WOAN concept is already overly complex.

It is important to understand the economics that define telecoms operators, whose capex spend is driven by revenue expectations that are a direct result of customer density and consumption patterns.

Higher customer density allows for lower costs and lower prices. Our vast expanse of a country increases our costs of connecting rural areas and our obsession with one-house-per-plot instead of vertical apartment living increases the cost of telecoms exponentially.

All in all, 5G is a promise that enables future applications – and current technologies are more than adequate.

The WOAN will most likely be stillborn just like USALs were, regulation reform is sorely needed, and spectrum allocation will continue to be a pipe dream.

Fibre to the home and business with supplemental fixed-LTE is here now and it works.

An opinion piece by RSAWEB Co-founder Mark Slingsby

Now read: MTN mobile money – South African launch date and details

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Banking on 5G – Don’t hold your breath