Wireless

by Karl Bode


Filed Under:
5g, hype, investors, wall street, wireless



Wall Street Quietly Warns That 5G Wireless Is Being Aggressively Over-hyped

from the meet-the-new-boss dept

As hardware vendors and cellular carriers prepare deployment of fifth-generation wireless networks, you may have noticed that the hype has gotten a little out of control. Claims that 5G will magically revolutionize the broadband sector sound nice and all, but as we've noted repeatedly, 5G is really more of a modest evolution in existing networks, not some kind of revolutionary panacea that's going to change everything. Still, claims that 5G will somehow usher in amazing smart cities or somehow result in a four day work week for everyone (what?) get far more traction than they probably deserve.

Alongside the generalized hype, carriers are pushing another narrative: that 5G wireless is so incredible, it's going to fix all of the telecom sector's biggest problems by delivering a massive new wave of competition. This competition will be so amazing that net neutrality will apparently be made irrelevant. It's largely bunk originating with telecom industry marketing departments, dutifully swallowed and regurgitated by an unskeptical press.

The problem: 5G, like 4G before it, isn't going to be cheap. Companies like Verizon, AT&T, and CenturyLink still enjoy a monopoly over the backhaul and core transit lines that feed these networks, meaning they're going to do everything in their power to keep prices high along the chain. Protectionist blacklisting of cheap Chinese network hardware and the death of net neutrality isn't likely to help, and Wall Street is making it clear they want 5G priced at a premium to quickly recoup any investment cost:

"How might this look? Well, we could borrow from some other industries. One simple way would be a flat premium price, similar to the "tiers" of Netflix for a higher number of devices or 4K/Ultra HD. So, perhaps $10 per line for 5G, or $25 for a family plan. Another approach would be more akin to broadband, where there are pricing tiers for different levels of service performance. So if the base 4G LTE plan is $50 per month today, for an average 100 Mbps service, 5G packages could be sold in gradations of $10 for higher speeds (i.e. $60 for 300 Mbps, $70 for 500, $80 for 1 Gbps, and so on)."

Despite what you'll hear from carriers, 5G also isn't going to be particularly widely deployed for those living in second or third tier cities or rural markets. You know, the places already hit the hardest by the cable industry's growing monopoly over decent broadband speeds. If you stop for a moment and look beyond the 5G hype curtain, you'll see even Wall Street warning that promises of 5G as a competitive panacea (or a real challenger to cable's domination of speeds of 50 Mbps or above) are dramatically overstated. Analysts at Jefferies, for example, had this to say:

"We continue to believe the threat of 5G to wired broadband is overblown. We are skeptical on the economic viability for a deep rollout given the propagation characteristics of mmWave, and expect sign ups will be slow. Further, given the full footprint rollout of DOCSIS 3.1, and the ability to upgrade the HFC plant to 10 GB symmetrical speeds with little capital investment, we expect 5G's perceived speed advantage will be short lived.”

And while you'll hear a lot of folks at the FCC and elsewhere hyping "fixed" 5G as a real competitive panacea (largely to justify carrier requests for broad, almost mindless deregulation), analysts are skeptical here, too:

"“By the end of 2020, 5G fixed wireless solutions remain niche despite deployments by more than 50 network operators worldwide,” the analysts at CCS Insights wrote in one of their predictions for 2019. “A slew of providers offers fixed wireless access as an alternative to fibre in high-density areas. They follow early launches of 5G networks in the US that take the same approach to providing broadband access in a fixed location. However, such services remain niche, representing only a tiny fraction of total 5G connections in the long term."

To be clear: 5G is going to eventually provide faster, lower latency, and more resilient networks, when it actually arrives at any real scale (think 2021 or later). But it's not going to fix all of the problems that have made U.S. broadband so terribly mediocre, including a lack of serious competition in less affluent markets, the monopoly over the business data services (BDS) market, or those protectionist laws in 21 states monopolies literally purchased in a bid to hamper competition.

And if ISPs win their looming court case over net neutrality, the nickel-and-diming we're already seeing is going to seem downright quaint in a few years, as Wall Street pushes carriers to find new, "creative" ways to charge even more money for the same service.


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • icon
    Anonymous Anonymous Coward (profile), 15 Oct 2018 @ 7:01am

    We can't hear you now!

    "Wall Street Quietly Warns That 5G Wireless Is Being Aggressively Over-hyped"

    Dear Wall Street,

    Speak louder.

    Everybody except the Telcoms and the FCC

    reply to this | link to this | view in chronology ]

  • icon
    Anonymous Anonymous Coward (profile), 15 Oct 2018 @ 7:06am

    Hyping the hype for greater hyperage

    The only new competition I foresee is in how the various Telcom providers come up with ways to screw their customers more (margin) without seriously impacting the number of users or their usage habits (traffic). I suspect we will see real innovation in this area.

    Of course there will be a problem with slow adoption, which the industry will 'fix' by deprecating 4G more quickly than the market would like.

    reply to this | link to this | view in chronology ]

  • icon
    Bamboo Harvester (profile), 15 Oct 2018 @ 7:18am

    It's the new DSL

    You're focusing on the raised charges to users.

    The BIG money is going to be the billions gifted to the carriers to "provide rural service and upgrade existing systems", and they're going to take the money and do..

    NOTHING.

    How's that Verizon DSL working out that we've been paying for the last decade or so? Or even new copper in the streets? It's PAID for...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Oct 2018 @ 7:28am

    "Claims that 5G will magically revolutionize the broadband sector "


    Deja Vu ... this is what they said about 4G.
    Is 4G actually deployed yet? What has it done for anyone?
    Yes, 5G will be so much better - at least one G better anyways.

    reply to this | link to this | view in chronology ]

    • identicon
      Pixelation, 15 Oct 2018 @ 8:23am

      Re:

      "Yes, 5G will be so much better - at least one G better anyways."

      Why not call it 4G+? Telcos... "Because this one goes to 5!

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 Oct 2018 @ 9:54am

        Re: Re:

        Why not call it 4G+?

        Because in the existing mobile bans that is what it is, and that is not good for market ting at a significantly increased price.

        For the real high speed performance you need to go into the 15G and higher bands. That is well into the land of wave guides and directional antennas, making it mainly useful for fixed line of site links.

        reply to this | link to this | view in chronology ]

      • icon
        James Burkhardt (profile), 15 Oct 2018 @ 10:27am

        Re: Re:

        Because telco aren't sleek tech brands like Apple and so still think that the consumer wants easy to understand numbering schemes.

        reply to this | link to this | view in chronology ]

  • icon
    ShadowNinja (profile), 15 Oct 2018 @ 7:36am

    Woohoo! I'll be able to burn through my data cap in even less time then ever when I get 5G!

    I always feel bad whenever I'm not paying massive overage fees to the telecoms, but 5G will make the pain at the start of each new month go away much quicker!

    Maybe I'll be able to burn through all my data in just 5 minutes once 5G is rolled out instead of 10!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Oct 2018 @ 7:59am

      Re:

      From Big ISP.
      Don't worry. Your new unlimited plan won't have any caps. Use as much as you want. As a side note, the unlimited plan is for bandwidth and not actually data used. There is still a fee for going over you 10GB allotment. Good news though is that there won't be any throttling. Instead you will be automatically charged an affordable $10 per 1 GB "rounded up" for any data used over 25GB. Also there will be an additional $.99 transaction fee on top of the $10 per GB. We ask that you just provide us your Credit card so that adtional bandwidth doesn't change your monthly bill and instead can be paid for right away. Also as a thank you for choosing BIG ISP, here is a link to a library of 4k movies for you to watch from your mobile device free of charge.

      reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 15 Oct 2018 @ 8:40am

      Re:

      Maybe I'll be able to burn through all my data in just 5 minutes once 5G is rolled out instead of 10!

      If you actually get 1 Gb/s (which is what 4G was supposed to be, incidentally), and you have a 20 GB cap (160 Gb), you can hit it in 2:40. You could hit a 1TB (8000 Gb) cap in about two and a half hours.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 15 Oct 2018 @ 9:29am

        Drive as fast as you want... on the hundred feet given to you.

        Funny how they never mention that in the ads...

        'Sign up now for our newest service, giving you blinding fast speeds for the few hours it takes to hit the cap we added last year, after which your speed will be throttled to the point that dial-up will seem amazing in comparison or you'll be charged a hefty overage fee for every gig past that point.

        reply to this | link to this | view in chronology ]

  • identicon
    Christenson, 15 Oct 2018 @ 9:28am

    What 5G might be good for....

    reply to this | link to this | view in chronology ]

  • identicon
    Christenson, 15 Oct 2018 @ 9:33am

    What 5G might be good for....

    Besides 5 more overcharges!

    Would be if I had an IOT device I actually wanted to secure, like, you know, a door lock or a traffic light.Of course, they would have to resolve the number spoofing problem!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Oct 2018 @ 9:38am

      Re: What 5G might be good for....

      IOT and secure are mutually exclusive.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 Oct 2018 @ 11:27am

        Re: Re: What 5G might be good for....

        This ^

        No software is bug-free. Anything put on the internet is exposed to potential hackers. The only reason your computer hasn't been hacked yet (unless it has) is that it has not been a tempting enough target to justify the effort of breaking into it. Put your home security system on the internet and you've just created a tempting target.

        You don't even have to go that far. Any device attached to the internet and also on the same network as any part of your security system is an attack vector.

        All that new tech is neat but it's an open invitation to thieves the moment they figure out you have it.

        reply to this | link to this | view in chronology ]

        • identicon
          Christenson, 15 Oct 2018 @ 7:56pm

          Re: Re: Re: What 5G might be good for....

          Not that I expect you won’t hack into my IOT device as soon as you realize I have a really nice car in my driveway, but one way of reducing the attack surface is if it only accepts data connections from my cell phone. Now you need to steal that to get started.

          Of course, the carriers let you spoof right now, even make your own cell tower, so you have a big head start!

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Oct 2018 @ 11:50am

    "So, perhaps $10 per line for 5G, or $25 for a family plan. Another approach would be more akin to broadband, where there are pricing tiers for different levels of service performance. So if the base 4G LTE plan is $50 per month today, for an average 100 Mbps service, 5G packages could be sold in gradations of $10 for higher speeds (i.e. $60 for 300 Mbps, $70 for 500, $80 for 1 Gbps, and so on)."

    OK: how does this line up with my 2 phone plan where both phones combined can use a max of 2GB of data per month, for the low price of $100 (excluding voice and sms) and spotty 4G coverage?

    Really: the issue for me isn't the speed of the network: it's the fact that my data is so limited and the plans cost so much. As the article points out, 5G isn't going to fix either of these things: in fact, it'll just make them worse.

    The last thing I want is for me to forget to disable data on some new app I install, and have it burn through my 2GB limit and throw me into overages in a matter of hours instead of days.

    reply to this | link to this | view in chronology ]

  • identicon
    Melvin Chudwaters, 15 Oct 2018 @ 1:11pm

    5G is what you do when you don't want ubiquitous fiber everywhere.

    Fiber makes data/bandwidth so cheap that no one would bother metering it, much like was once said about nuclear electricity.

    That's a commodity. They'd be utility companies.

    5G though, they keep data scarce, expensive, rationed.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Special Affiliate Offer

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories

Close

Email This

This feature is only available to registered users. Register or sign in to use it.