A prominent investment analyst has cast serious doubt on the ability of 5G technology to live up to the hype.
Speaking at an event in Sydney hosted by Australian telecoms regulator ACMA, New Street Research senior analyst Andrew Entwistle warned that despite the potential of 5G to deliver unprecedented mobile speeds, its technical limits seriously threaten its economic viability.
Entwistle said 5G cannot be considered a genuine generational leap such as 3G to 4G, Fairfax Media reported, because it is only expected to operate in tandem with earlier technologies and not replace them.
In addition, he said 5G’s capability to provide outdoor to indoor service is “almost terminally poor.”
The shorter range and penetration potential of the signals threatens to require operators to either invest heavily in customer premise equipment or stick with 4G and Wi-Fi for indoor areas.
Financially, Entwistle said the biggest hurdle for the industry is that traditional business models and monetization strategies will not necessarily apply to the new technology. He said the industry currently lacks the tools and techniques to bring higher-frequency spectra to productive use.
He said the advent of 5G will also only increase the challenges for wireless-only operators struggling to compete with rivals operating fixed and wireless services, particularly in terms of issues such as backhaul costs.