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By May 4, 2020September 21st, 2023Whitepapers13 min read
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5G: Promises, Drawbacks and Business Applications

Part of what’s being called the Fourth Industrial Revolution—the current period of rapid technological change—5G will ultimately replace 4G LTE as the fastest and most reliable method of mobile communication and data streaming.

It is easy to think of 5G as simply an incremental improvement. The differences between 4G and 5G, however, are more than just a number. 5G offers enhanced speed and latency, and also brings new data security risks and infrastructure requirements.

Businesses must be prepared for the challenges and opportunities presented by the
transition from 4G to 5G networks.

Before exploring the promises and drawbacks of 5G networks, it is helpful to understand how the fifth generation of wireless networking technology differs from its predecessors. The nomenclature is straightforward: first generation tech is 1G, second generation tech is 2G and so forth.

Here is an overview of each generation and some of the technological capabilities each era enabled:

  • 1G launched the first mobile networks and supported voice calling.
  • 2G expanded 1G networks by allowing users to send data via mobile phones. Telecommunications companies add SMS, MMS and low bandwidth internet connections through 2G networks.
  • 3G brought the internet and video streaming to mobile users. With 3G networks, phones began to gain some of the more useful features used today. A stationary user could expect data download speeds of about 3.1Mbps.
  • 4G is the most widely available wireless network currently being used in North America and Europe. 4G improved upon 3G with superior speed and latency. This increase in speed made data-demanding video streaming services such as Netflix, Facetime and Skype possible for mobile users. Most 4G LTE networks offer data download speeds of 20 to 50Mbps. 4G networks are typically about 10 times faster than 3G networks.
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5G is being rolled out at a crucial time when more bandwidth is needed to serve nearly 27 billion mobile devices, security systems, home appliances, vehicles and other parts of the Internet of Things. The new generation of wireless networks seeks to surpass the data rates of 4G LTE by a large margin. With 5G, users can expect minimum download speeds of 50Mbps. In other words, the poorest 5G networks will offer better speed and latency than the best 4G LTE networks.

Many people understand that 5G networks will be faster than earlier generations, but what does that mean in relative terms? As mentioned, the slowest 5G networks will be at least as fast as the fastest 4G LTE networks. The maximum data transfer rates, however, depend on factors such as geography, weather and infrastructure.

The maximum possible download rate of a 5G network is 10 Gbps. That means the fastest 5G networks are 200 times faster than the fastest 4G LTE networks. While this upper bound is impressive, it is unlikely most 5G users will ever experience download rates beyond a few gigabits per second.

High frequency millimeter wave spectrum (mmWave)—the use of frequency bands in the 24 GHz to 100 GHz range—provides challenges and benefits for 5G networks.

Though it is capable of extremely high speeds, this spectrum is severely limited in range and attenuation. Millimeter-wave will not penetrate obstructions such as walls, trees and windows. It will also not propagate effectively beyond probably 1-2 kilometers at best.

Lower frequency (below 6 GHz) will propagate for miles, but the amount of spectrum available will limit most operators to maybe 100 MHz of spectrum per cell tower. While it will limit the bandwidth, it is still an improvement. Symmetrical speeds of 75 Mbps out of a 10 MHz 5G deployment have been observed among existing 5G networks. There is still the potential for bandwidth of several hundred megabits per second if enough spectrum is available.

The factors that affect the data transfer rates of 5G networks are complex, but speeds generally are limited by factors including:

  • Distance of end users from the nearest tower or small cell.
  • Issues with 5G technology and infrastructure.
  • User traffic.
  • Number and size of the channels available for use between devices and networks.
  • Environmental factors such as weather and geography.

5G users in general, the most significant limiting factor will be the bandwidth of connection channels. However, these limitations may be negligible for the average customer. While 5G networks have wider channels to send more data, channel sizes in most real world scenarios will not be large enough to support download speeds of 10Gbps per second. Despite these limitations, 5G networks are significantly faster than 4G LTE networks.

With the exception of online gamers, casual mobile users often do not consider the role of latency when researching network capabilities. After all, a few moments of lag between both ends of a data transfer does not make much of a difference for most online activities. The 50-millisecond latency of 4G LTE networks is usually sufficient for casual users, and does not generally impact video streaming in any meaningful way.

Latency is an entirely different story for businesses. Delays in data transfers can mean interruptions or poor quality during video conferences and VoIP calls. High latency can also result in major inconveniences for businesses that rely on devices within the realm of the IoT (Internet of Things).

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Low latency is absolutely critical in all tasks that require quick response times. Autonomous vehicles, assembly lines, and robotic arm surgeries all require the low latency that 5G can offer.

Consider the example of a factory of industrial robots that are connected to a central interface and each other via the internet. To successfully assemble and ship products, each industrial robot must know that the preceding step was completed successfully before it performs its task. Otherwise, resources might be wasted on a flawed product. Given the rapid pace of these factories, communication between industrial robots must be instant. This is where latency is important. High latency means that emergency stop commands and error messages might not be received when they are needed.

The low latency of 5G networks makes sending and receiving data a nearly instant process. With 5G networks, all devices on the Internet of Things will be able to communicate more rapidly.

You might be wondering: what is the difference between 4G LTE latency and 5G latency? Quite a lot. Under theoretical best conditions, 5G offers a 1-millisecond latency. Most users, however, should expect their 5G network to offer a 10-millisecond latency. In other words, 5G networks are more instantaneous than 4G LTE networks by at least a factor of five. 5G sites will communicate directly with each other, whereas in older technology, all of the messaging went to the network core. This concept applies to device to device connectivity. Fiber connectivity to 5G sites will ensure enough bandwidth is available and low latency can be achieved.

5G will definitely improve mobile networks with rapid download speeds, low latency and support for more traffic. The transition to 5G, however, will not come without costs.

Thanks to the infrastructure requirements of the technology behind 5G, it will take several years for 5G networks to be readily accessible in all of the major U.S. cities. Some of the leading telecommunications companies expect 5G to be available in the densest parts of up to 30 American cities by the end of 2020. 5G will not begin to reach small towns and rural areas until 2021 at the earliest.

The 5G rollout is moving at such a slow pace because new technologies need to be installed. Upgrading the cellular towers used for 4G LTE networks is not sufficient because 5G depends on the high-frequency millimeter waves instead of the usual radio frequencies. Millimeter waves allow for more bandwidth, but they do not travel nearly as far as radio waves. They also have trouble passing through obstacles such as people, water vapor and walls. To remedy these problems, devices known as small cells must be installed to relay the millimeter wave from the tower to the destination.

Thousands of small cells must be installed throughout a single city in preparation for 5G coverage. Cellular towers must also be outfitted with a new tech called Massive MIMO also known as multiple input, multiple output. This new technology can handle at least 22 times more traffic than the towers used for 4G LTE. Yet again, the tech comes with a tradeoff. To prevent Massive MIMO antennas from interfering with each other, a technology known as beamforming must be adopted.

Beamforming is a technique designed to make wireless communication faster and more precise by focusing wireless signals directly toward a receiving device, rather than having the signal spread in all directions from a broadcast antenna.

As you can see, the sheer volume of technology upgrades required for 5G means that telecommunications companies, local governments and regulators will be busy with infrastructure projects for a decade or more.

Despite the scale and cost of these projects, 5G adoption may grow at a faster rate than what was seen with 4G. The Ericsson Mobility Report optimistically predicts that 5G will have 2.6 billion subscribers (nearly 65% of the global population and 45% of mobile data traffic) by 2025. For comparison, it took 4G LTE 7 years to expand global coverage from 800 million to 2.75 billion subscribers.

Due to thousands of small cells in each city and billions of devices on the IoT, 5G potentially opens up entry points that can be exploited by hackers. Some experts are also concerned that suppliers of 5G infrastructure components—such as Huawei—could install backdoors that can later be exploited for espionage or cyberattacks.

However, it is worth pointing out that the problem of security flaws is not unique to 5G infrastructure. 4G infrastructure could also be supplied by companies like Huawei. Therefore, the main issue with 5G networks are about the pace of the rollout and the amount of new tech involved.

It should also be noted that, for both 4G and 5G, connected IoT devices are only as secure as they are made to be. The odds of an insecure device creating a security breach increase with the number of devices on the internet connection.

While businesses will need to upgrade their current technology, the longterm savings extend beyond the monthly telephone bill. Great customers and employees are hard to find, but having the right technology allows a business to grow both. The rich feature set of a Hosted PBX solution enables employees to be more efficient, which can mean happier customers. Both of these costs are hard to quantify but everyone understands that it’s less expensive to retain a satisfied customer than it is to go out and acquire a new one.

Communication Software Will Become More Efficient
With rapid data transfer rates and almost zero latency, businesses can rely more heavily on software. Conferencing software such as Skype and Zoom will become more reliable as 5G eliminates audio and video lag. Collaboration tools for editing spreadsheets and documents will also function more smoothly as edits will update across all users in real time.

Cloud-Based Software Will Become More Popular
Businesses should also expect a broad shift from local software to Cloud-based tools. For example, developers will be able to use a Cloud-based version of their favorite syntax editor without experiencing those pesky moments of lag that hindered the virtualization in the past. Cloud-based DevOps software and version control repositories will become more popular when 5G allows online data to be used instantly.

Hardware Virtualization Will Become Viable
5G could change the way businesses spend their technology budgets. With the low latency of 5G, businesses can virtualize the hardware necessary for tasks such as graphic design, data analysis and programming. Instead of purchasing computers with sufficient processors, graphics cards, and RAM, companies can pay to remotely use off-site hardware. Hardware virtualization could help companies with small technology budgets enter expensive industries.

Improved Internet Connection Reliability
5G will improve upon the reliability and cost reduction that SD-WAN allows businesses to take advantage of. Use of multiple service providers can significantly reduce or eliminate downtime due to service provider internet outages. While the ability to take advantage of increased internet reliability by combining a wireline and wireless connection was often limited to smaller branch offices by the bandwidth available on 4G networks, the higher speeds and lower latency of a 5G network will allow offices with more employees and higher bandwidth demand to utilize this type of SD-WAN deployment.

5G will fulfill its promises of high-data-transfer-speeds and very low latency, but the rollout will take a few years in the United States, in large part because of the infrastructure requirements. 5G offers plenty of opportunities for more efficiency, so businesses can use this time to develop a strategy to potentially switch to virtualized hardware and Cloud-based software. Companies can also use this brief lull for the 5G transition to find ways to offset equipment costs and potential security risks.