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5G a Fizzle With Consumers

The cellular companies have made an unprecedented push to get customers interested in 5G. Back in November, I recorded a college football game that enabled me to go back and count the twelve 5G commercials during the game. Advertising during sports events is relatively expensive, so these ads were not purchased at bargain-basement prices. The amount of money being spent on advertising 5G must be gigantic.

It looks like all of that advertising is not having the impact that the cellular companies want. JD Powers conducted a series of large surveys near the end of 2020 and found that the public was less than enamored by 5G, even after all of the advertising.

In good news for the cellular carrier, the advertising has created awareness of 5G, and 92% of those surveyed had heard of 5G. However, only 26% believe that 5G is faster than existing 4G cellphone broadband. The response that cellular carriers will find troubling is that only 5% of those surveyed would pay more to get 5G. Only 4% are willing to switch cellular providers to get 5G.

The only companies that are making money on 5G are the cellphone manufacturers. Throughout the fall, all of the big cellphone companies put a big push on having 5G in the phone. However, that advertising might not be having the desired impact, and I’ve noticed that recent cellphone ads focus on the cameras in the newer phones instead of 5G.

None of this is particularly surprising because the web is full of stories about how 5G speeds are disappointing. Numerous reporters have compared 4G and 5G coverage in the same locations and often found that 5G is slower than 4G.

But there is a more fundamental question that the cellular companies have never addressed with customers. Why do customers need faster cellphone data speeds? The biggest bandwidth functions performed on most cellphones are watching a video or playing games—and 4G data speeds are more than adequate for these needs. Cellphones don’t suffer from having multiple users trying to use the bandwidth at the same time. Unlike with home broadband connection, I can’t recall hearing of people complaining that cellphone data speeds are too slow. People complain about coverage gaps where they can’t get service, but there doesn’t seem to be any groundswell asking for faster cellphone data.

Most people don’t realize that the cellular companies have no choice in the way they are rolling out 5G. The 4G cellular networks are swamped and overloaded, and if the cellular companies didn’t act, they were facing the collapse of the 4G network during busy hours.

The carriers have taken some of the stress off the 4G network by deploying small cell sites. But like with many other things, small cell site deployment slowed down during the pandemic. The carriers have introduced new spectrum bands, and that is what they are currently labeling as 5G. The real point of the 5G advertising is to lure people to buy and use phones that use the new spectrum bands, which reduces the pressure on the traditional cellular spectrum.

Eventually, the carriers will deploy the real 5G, which means using the 5G specifications. That will complete the third leg of cellular improvements. Some of those 5G features will significantly improve cellular networks. For example, a single cell site will be able to handle up to 100,000 connections at the same time eventually. Cellphones will not only try to connect to the nearest cell site but will be able to connect to other cell sites and will even be able to connect to more than one cell site at the same time. The 5G improvements are all aimed at helping urban cellular coverage and won’t make much difference in rural markets.

For now, the only new 5G feature that has been deployed is dynamic spectrum sharing (DSS). This feature lets a carrier mix 4G and 5G customers in the same spectrum bands. This feature allows the cellular companies to shuttle customers away from the busy spectrum to relieve pressure on the network.

I don’t know that we’ll ever learn the extent to which these various efforts are helping the cellular networks. The cellular companies have been careful for years not to publicly discuss the 4G crisis and are not now likely going to divulge the details of how they are fixing network problems.

By Doug Dawson, President at CCG Consulting

Dawson has worked in the telecom industry since 1978 and has both a consulting and operational background. He and CCG specialize in helping clients launch new broadband markets, develop new products, and finance new ventures.

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