5G Is Coming — and It's Not Just About Your Phone (Part II)

Last week we talked about what 5G is, and how it’s different from the 4G cellular technology we’ve become used to. This week, a few more details.

But first, a heads up on the term “5G.” The standard will not be official until late 2019. Thus, any vendor referring to its offerings as 5G before 2020 is jumping the gun. They might get lucky and be compliant with the standards once they’re finalized, but until that happens, they should really be saying “5G-like” or “5G-ish” or “5G with-our-fingers-crossed.” Apply the same grain of salt when I use the term in this column.

Who Owns 5G?

Answer: Nobody.

5G is a standard, not a product. Think of it like HTML, AA batteries, 14” trash compactor bags, the JPG photo format or 35mm film. Nobody owns the rights to any of those things, but everybody who makes them agrees to abide by an accepted set of published standards. So no matter whom I buy a roll of 35mm film from, it’s going to work in my vintage Leica.

In the same way, if I manufacture a remotely controlled incubator thermostat in accordance with the 5G standard, it will be able to talk to any other device that also adheres to that standard, whether it’s an iPhone or an integrated hospital equipment control system.

When Will 5G Be Available?

For limited industrial applications, we’ll see the first deployments in late 2018 (subject to the disclaimer up above, i.e., “5G-we-hope”). But we’re not likely to see true 5G consumer smartphones or tablets until sometime in 2020. Since the standard hasn’t been finalized yet, manufacturers are reluctant to commit resources to producing chips except for preliminary design efforts. And there’s another issue…

Will My Current iPhone or Android Be Able to Use 5G?

Nope.

If you look in the upper left corner of your smart phone, you’ll see what technology it’s using at the moment. If you’re not on WiFi, you’re most likely to see LTE or 4G, maybe 3G once in a while, even 2G if you’re in a location where the local carrier didn’t think it was worth it to upgrade. Most phones are compatible with all the technologies that have ever been in use and still might be in some places.

What you’re not going to see is 5G, because when your phone was built no one knew what that protocol was going to look like so there were no chips to support it. This, of course, is the kind of situation that makes phone manufacturers nearly faint with ecstasy. Anyone who wants to take advantage of 5G when carriers start deploying it is going to be in the same position as car owners were when automatic transmissions came out: They’re going to have to buy a brand new model.

However: Verizon and AT&T announced recently that they’re going to build some “5G hotspots” later this year. These will connect to the cell system using 5G but will broadcast a WiFi signal. In other words, they’re providing a “tether” so that you can get high speeds out of your mobile devices without actually using 5G directly. Sounds like a great idea, except that there will only be a few of these towers scattered around the country and you’re pretty much going to have to be less than a sand wedge away to use one, which is the whole problem with WiFi to begin with and defeats the entire advantage of using the cell system.

There’s one other possibility that might make a new phone unnecessary, and that is “personal 5G hotspots.” Right now you can buy a personal hotspot for 4G that acts just like the 5G hot spot mentioned above. It connects to the cell system but broadcasts a WiFi signal that your phone or computer can use. These are pocket-size gadgets that typically cost a fraction of what a smart phone or tablet does, although you still need a cellular data plan to use it. There’s no reason why manufacturers can’t make these for 5G systems, and if you don’t mind carrying the gadget around with you, you can avoid paying for a whole new phone or tablet.

If you do want a 5G iPhone, you’re going to have to wait a while, the exact date depending on whom, if anyone, Apple partners with to get it done, because the engineering challenges are enormous. If they go with an established chip manufacturer, like Qualcomm or Intel, we might see a phone in early 2020. If they decide to go it alone and build their own chips, it could be later in that year 2020 or, more likely, 2021.

Samsung, on the other hand, might have a 5G tablet, the Galaxy S10, out before the end of 2018. Where you’re going to be able to use it, I have no idea. And whether it’s going to still work when the 5G standard is finalized is also unknowable.

What’s it going to cost?

I have no idea.

Right now, the average smart phone data plan in the U.S. costs $72/month and gives you 2 GB (two billion) bytes of data, which sounds like a lot, but if you watch that Harry Potter movie in high-def, you’ll swallow your whole allowance by the time the final credits roll. If you tether your phone to your computer and download some big files at 5G speeds, you could use up your 2 GB in five seconds. After that, you can pay as much as $10 for each additional gigabyte, an absurd $120 an hour if you keep downloading at that rate.

Clearly, 5G is not going to be practical for consumers unless current pricing models change, but in order for a 5G plan to cost the same as your 4G plan, your carrier would have to charge you a thousandth per byte of what they’re charging now. That’s probably not practical, but my own feeling is this: Unless carriers offer affordable “all you can eat” data plans, 5G is not going to fly with consumers in any big way.

I don’t know what those numbers will be, but they’re going to have to incorporate the cost of building out the 5G system. That’s going to run into the tens of billions for the carriers because not only are the engineering challenges enormous, the current array of cell towers won’t work. Those are spaced 1-5 km apart, and 5G base stations might need to be as close as 250m to one another. They’ll be smaller and cheaper, but there will need to be hundreds of thousands of them for a truly nationwide deployment.

Then again, a “truly nationwide” deployment might not be practical, at least until some technological breakthroughs occur. 5G is a fiendishly difficult engineering challenge, for reasons best left for another column.

The bottom line is this: As cool as 5G technology is, I don’t think it’s going to make much of a difference to the average consumer until a few years after it’s formally introduced, except for perhaps the higher speeds, and I’m not sure even that is all that exciting. It might be nice to get to the point where you can use it in your home if there’s a reasonably-priced, unlimited data plan. It would also be convenient to have it in hotels and other away-from-home locations, where the WiFi is usually awful, but unless you’re on the road and away from a good WiFi connection, I can’t see where it will do you much good. (I’d pay a fair bit to have it on airplanes, but unless you’re flying no faster than 300 mph and doing it at treetop level, 5G won’t work in a plane.)

Marketing hype aside, the true advantages of 5G will come from its integrated ecosystem features, and it’s going to take years to build out that infrastructure and transition from the current one.

I’ll keep my finger on developments as 5G evolves, so stay tuned…

Lee Gruenfeld is a managing partner of Cholawsky and Gruenfeld Advisory, as well as a principal with the TechPar Group in New York, a boutique consulting firm consisting exclusively of former C-level executives and "Big Four" partners. He was vice president of strategic initiatives for Support.com, senior vice president and general manager of a SaaS division he created for a technology company in Las Vegas, national head of professional services for computing pioneer Tymshare, and a partner in the management consulting practice of Deloitte in New York and Los Angeles. Lee is also the award-winning author of fourteen critically-acclaimed, best-selling works of fiction and non-fiction. For more of his reports — Click Here Now.