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Worried about the pace of 5G growth?  Relax

April 20, 2023 | We have been looking at historical data for the mobile industry recently, especially looking at the roll out of LTE compared to 5G.  It seems that many stories these days state that ‘5G is a failure’ and that 6G will provide all the answers.  To those of us who have been in the industry for a while, this seems like deja vu all over again.  Let me explain.

LTE was first launched in the U.S. by MetroPCS and Verizon toward the end of 2010.  Sprint launched 4G using WiMAX (with the HTC Evo 4G smartphone) in June of that year.  As soon as LTE launched, the debates started over what is ‘real’ 4G.

A quick web search pulled up multiple stories and blog posts debating what ‘real’ 4G was.  For example, a Reddit blog post from 2011 was asking why “4G sucks so bad in the US?” CNN Money in December 2010 said that “4G is a myth (and a confusing mess)”.

And the debate did not stop. In December 2013, the IEEE Spectrum publication had an article titled “LTE-Advanced is the real 4G” and NetworkWorld in February 2014 had an article titled “Report: America’s 4G LTE is really slow”, saying that the U.S. ranked 15th out of 16 countries when it came to average speeds.  And as late as 2016, one Reddit user was asking “Why is my 3G always faster than my LTE?”

Many people look back at LTE today and declare it a great success, but, as these stories show, it did not happen overnight.  It took time, years in fact.

Looking back at the market statistics (iGR has been publishing mobile stats since 2000 and detailed reports since 2010), it was not until 2014 that the number of LTE connections in the U.S. exceeded those of 3G and not until 2015 before LTE exceeded 2G+3G connections combined.  So it took more than four years for LTE to penetrate the majority of the market. And yes, there were many new apps and services launched in this time (think Uber, Waze, etc.) but Facetime was not supported on LTE by AT&T until January 2013 (prior to this, Facetime was limited to Wi-Fi) and only then on specific plans.

So what about 5G?  The Wall Street Journal had a story titled “It’s Not Just You: 5G Is a Big Letdown” in January 2023 that basically said that the author could not see a difference between 4G and 5G.  Stories like this are not unusual, but I think they are premature.

5G was launched in 2019 and iGR does not expect 5G to reach the majority of U.S. mobile connections until 2025, or about six years after launch.  Remember that LTE took about five years to reach the same point.  But the pandemic started in 2020 and severely impacted the economy, the workplace and of course the mobile industry.  Mobile operators scrambled to match network capacity to the ’new normal’ and, three years later, things are still not back to pre-pandemic behaviors.

Also, remember that when LTE launched in 2010, the mobile operators already had access to the 700 MHz band (auctioned in 2008) which was used to launch much of the new service.  AWS-3 auctions were in the first part of 2014.  For 5G, no new bands were auctioned until December 2020 (C-Band, with much of the band requiring relocation) and October 2021 (3.45 GHz).  So it can be argued that the MNOs were only able to start deploying 5G in mid-band spectrum two years AFTER 5G was first introduced, and 5G deployment is still well underway - there is a long way to go.  And the availability of 5G handsets was limited initially to just a few models.

Other factors play in here as well:  the S&P 500 did nothing but rise from 2010 when LTE was introduced until 2019 when 5G was launched. (The S&P peaked in November 2021, of course, before dropping to its current levels.)  And inflation was below four percent from 2010 all the way until April 2021; since then, inflation has of course increased.  So while LTE grew during some of the most favourable economic conditions, 5G has faced a global pandemic and a far harsher economic situation in the first few years after launch.

Finally, remember that 5G will be with us until 2030 at least. LTE has been in the market since 2010 (13 years and counting) and even by 2027, iGR expects that about 20 percent of U.S. mobile connections will still use LTE, 17 years after launch.  If 5G follows, the same path, we can expect a sizable number of devices to use 5G well into 2035, even after 6G (whatever that is - more on this later) is launched.

So let's relax a little before we judge 5G to be a ’success’ or ‘failure’.  In short, chill!  Let’s get through the after-effects of the pandemic, get back to economic growth, and let the innovators innovate some cool new apps and services.  Then in 2030 we can look back, as we are declaring 6G a failure, and see how well 5G actually did.

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