New Space startups and tech giants including OneWeb, SpaceX, Telesat, LeoSat and Amazon are all planning mega satellite constellations in Low Earth Orbit (LEO) to deliver broadband internet connectivity, aiming for a bigger slice of the trillion-dollar telecom market, vying with terrestrial alternatives (fiber and cable), as well as traditional satcom operators. We recently attended DC5G, a conference that gathered executives from the 5G ecosystem to get an industry perspective on the state of the market, business opportunities and challenges, as well as the role of satellite in 5G rollout.
Here is a summary of our key takeaways:
5G roll-out is at the beginning stage with 39 deployments around the world (4 in the US). However, 4G LTE is still being commercialized and will coexist with 5G for a long time. 2021 is expected to be a key milestone year with global 5G subscriber exceeding 1 billion, while LTE global subscriber is expected to peak in 2022 at over 6 billion.
The telecom industry is bullish on 5G; it will be dramatically different from previous generations and enable new applications and create new markets. First, 5G will bring enhanced broadband (personal mobile data communications, Augmented Reality/Virtual Reality) with more capacity and higher speed, handling more than 10x traffic at 1 to 10 Gbps. Second, 5G is expected to enable massive IoT. It would be able to connect 1,000x more low cost and low power devices (Machine-to-Machine Communications such as Smart City). Lastly, 5G’s ultra-low latency of 10-millisecond would enable critical IoT applications such as Autonomous Vehicles and industrial robots.
Examples of use case for First Responder/Public safety: The Department of Homeland Security (DHS) highlighted that enhanced broadband enables near-real time surveillance videos, while low latency supports critical data/voice communications, edge processing for security alerts and faster scanning for inspection. Lastly, the ability to deploy massive IoT would enhance port and border security and real-time asset tracking.
However, in reality, no one knows what the real killer application will be for 5G. The industry repeated the story of when 4G or GPS were being developed, no one envisioned enabling Smart Phone or Sharing Economy based companies like Uber.
In the US, the first 5G use case with deployment underway by Verizon and AT&T is Fixed Broadband to the home that leverages ultra high-band wireless spectrum and existing fiber to provide high speed broadband.
Wall Street is more skeptical and cautious of 5G and MNOs strategy of “Build it and They Will Come”. They see 5G as not just a consumer market, but an enterprise market. Analysts prefer the infrastructure play and are recommending stocks in tower, fiber and data center companies.
5G is a national priority in the US. Local government can accelerate 5G deployment by facilitating right of way for new cell sites, but deployment faces growing public concerns around potential health and property value issues. Unlike 4G, which is based on large towers with wide coverage, 5G is based on small cells with shorter range. In the US, it is estimated that 5G deployment will require more than 800,000 mini cell sites, many of them mounted on telephone and utility poles in neighborhoods and business districts.
The question of what role will satellite play in 5G came up a few times. Overall lukewarm response from MNOs and other panelists. Comments included "Perhaps useful in rural areas" and “Satellite can only deliver so much and will have lower throughput and higher latency”. Verizon has build out LTE to many rural areas, but this will be challenging with 5G due to small cell sites. “Interesting to evaluate LEO satellites for maritime or mining”. MNOs showed little interest in satellite as part of the solution.
Leading satcom operator SES argued that satellite as part of the 5G ecosystem is key for secure, ubiquitous connectivity and communications on the move (aircraft, ships, cars and trains) Terrestrial connectivity cannot feasibly reach 40% of the unconnected 2.9 billion people in the world. Satellite connectivity can solve the growing digital divide problem as 5G rolls out first in urban areas and the developed world. Moreover, satellite connects the remote 5G edge to the cloud enabling new and distributed applications such as SmartCity, Autonomous Vehicle and IoT.
How about you? What role do you think satellites will play in 5G?