Over the past few months, there’s been a lot of excitement surrounding the rollout of 5G in SA, with the country’s first 5G network going live in September.
While some of the buzz is warranted, the new-generation technology will have a limited impact on the typical South African mobile user.
This is according to Greg Chen, CEO of mobile communication tool Mobiz, who argues that 5G’s chief benefit will be in the trickle-down impact it has on the mobile users who remain tied to 3G and 4G.
Mobile data-only network operator Rain last month activated Africa’s first commercial 5G network in SA.
SA’s big mobile operators, such as Vodacom and MTN, are unable to launch 5G services until more spectrum is licensed to them by the communications regulator, the Independent Communications Authority of SA.
Rain will deploy its 5G wireless data network in certain parts of Johannesburg and Tshwane by leveraging its 4G data networking infrastructure to build the 5G network in its regulated 3 600MHz spectrum band.
Unlikely money-spinner
The 5G market is developing much faster than the previous generation 4G LTE standard, with a total 31 5G commercial service launches globally by the end of the second quarter of 2019, according to market analyst firm IHS Markit.
“5G’s core benefit over 4G is the increase in concurrent users from 4 000 to a million per square kilometre,” says Chen. “Thus, it would benefit highly concentrated populations where high-quality data access is limited.”
According to Chen, that means 5G is unlikely to be a major money-spinner for the networks, especially initially.
In reality, he says, perhaps the best way to monetise 5G is to utilise the additional bandwidth offered to reduce the overall cost of data on 3G and 4G networks, thus increasing data consumption.
That said, he points out there may also be opportunities for operators catering to the business space.
“For business, 5G operators may be able to compete with the quality of service of fibre, or at the very least provide a feasible failover for fixed networks.”
He notes that even then though, businesses that are highly dependent on the Internet of things (IOT) may need to exercise caution before embracing 5G.
“5G service delivery would be price-sensitive, assuming reverse or discounted billed data would be how operators would like to target service providers.”
According to Chen, the businesses most likely to benefit from 5G, therefore, are those in the online services space.
“Web services, such as e-commence and streaming, that are predominantly consumed via mobile data, should see their service delivery and access to customers improve with the rollout of 5G infrastructure.”
Given the shape of the South African economy, Chen believes 5G will likely be most useful in urban areas.
“Because 5G operates at higher frequencies, its coverage per node will be significantly lower, therefore many more nodes are needed to cover the same distance that 4G currently covers,” he explains. “This would mean that only densely populated urban areas would get full value out of the technology.
“As a consequence, this may mean 3G and 4G become cheaper for the people on the breadline, usually domiciled in rural areas. In short, many South Africans will only benefit indirectly from 5G.”
Key benefits
Meanwhile, Derrick Chikanga, senior analyst of IT services at Africa Analysis, comments that 5G will offer greater download speeds and lower latency to the average consumer in SA.
As such, he says, it will result in better quality networks that will enhance mobile broadband connectivity, and as a result, better streaming and video downloading experiences for the consumer.
“Given that fibre is largely expected to remain a targeted solution for the medium- to high-income households, 5G will provide an alternative high-speed solution to fibre for the low-income households.”
Chikanga points out the key benefits of 5G, compared to 3G or 4G, are that it will offer high-speed and high-capacity, more connected devices, and lower latency.
“The current constraints to 5G rollout include the unavailability of spectrum to enable its deployment in the country,” he says.
“Since 2017, most operators have been conducting 5G trials to demonstrate the levels of speed that could be achieved on this network. However, till now the government is yet to fully advise the public on its roadmap with regards to spectrum allocation.
“Other constraints include the limited availability of affordable devices that are 5G compliant. Affordable 5G devices are only expected to be widely available in SA around 2023.”
Nonetheless, IHS Markit says during 4G’s first year of launch, there were only three smartphones available to consumers that supported the standard.
In contrast, it notes, 5G this year boasts at least 20 smartphone designs available for release to the market. This demonstrates the high degree of market readiness for 5G, and its capability to attain high volumes more quickly than 4G, the firm says.
Chikanga believes 5G will advance the development of IOT capabilities as well as edge computing, robotics, virtual reality, machine learning and artificial intelligence.
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