Setting The Ground Rules For What Qualifies As 5G

Even though some 5G services were launched during the fourth quarter of 2018, it appears that this week’s CES is serving as the unofficial start of the 5G marketing wars. After a 2-3 year hiatus of significant mobile-related activity at CES (for a time, CES was the venue for iconic device debuts), 5G is one of the big deal themes at this year’s confab. Verizon CEO Hans Vestberg delivered a keynote address (sporting a very un-Verizon-like T-shirt), and there’s been lots of attention to 5G phones, absent any significant actual product announcements.

But the real news this week has been the kickoff of what looks to be a protracted debate, played out in the media and on Twitter, of not only who has the best 5G, but what is and what is not 5G.  AT&T got this party started last year, when it launched what it called “5G Evolution” in a handful of markets. But really, this was AT&T’s marketing term for what had been referred by most in the industry as Gigabit LTE. Notwithstanding the fact that Gigabit LTE delivers performance akin to early 5G services, AT&T took some modest heat for slapping the 5G moniker on what is, in actuality, an advanced LTE service. Then, in the waning days of 2018, AT&T rather quietly launched Mobile 5G in parts of 12 cities. This very controlled market launch was to a handful of hand-picked customers (i.e. you cannot walk into a store and buy the service). Although this is actual 5G, using the company’s mmWave spectrum and 5G new radio (NR) equipped cell sites, it’s really more of a large commercial market test than a generally available service, at this point. (see the column I wrote here)

But the gloves came off this week. AT&T stirred the hornet’s nest by announcing that it would change the indicator on its phones from ‘LTE’ to ‘5G e’ in its 5G Evolution markets. Verizon responded more expensively and corporately, with a print and social media onslaught, including a full page ad in the Wall Street Journal, both taking the high road (‘what’s good for the industry and consumers’) while calling out AT&T (“we won’t take an old phone and just change the 4 in the status bar into a 5”). T-Mobile responded more characteristically, with a series of John Legere tweets, including this hysterical video.

So before things get even uglier, I recommend setting some ground rules at this early stage of 5G. There are three broad things to consider here: what can be officially called 5G; what is fair to call a 5G launch; and what the 5G experience is going to look like.

What Can Be Officially Called 5G? There are two essential components: a cell site must be equipped with 5G New Radio (5G NR), as defined by the 3GPP(!) Standards body; and the device must have a 5G modem (such Qualcomm’s X50 5G NR or Intel’s XM 8160 5G). In an ideal world, the combination would include the 5G Chipset (like the Snapdragon 855 system that Qualcomm introduced in October). A service like AT&T’s 5G+ that uses a 5G hotspot like the NETGEAR Nighthawk qualifies as 5G in under this definition. One nuance here is that Verizon’s 5G Home (the fixed wireless access it has launched in parts of 4 cities) uses a proprietary standard called 5G TF. But we expect any Verizon rollout of mobile 5G and using a 5G smartphone would employ the 3GPP version going forward.

What Can Be Fairly Deemed a 5G ‘Launch’? On December 21, 2018, AT&T announced its 5G+ service, using its 39 GHz mmWave spectrum, in 12 markets. The service itself qualifies as 5G, even though the only device available at this point is the NETGEAR Nighthawk 5G hotspot. However, I do not consider this to be a commercially available 5G service, because a customer cannot actually buy the service at this time. It’s only being made available to “selected businesses and consumers” – that is, those that AT&T selects. It’s different than Verizon’s 5G Home service, since if a home is in an area covered by Verizon’s mmWave service in the four launch cities, they can get the service.

During 2019 and into 2020 especially, it is going to be important to consider what really qualifies as an available 5G market, despite what the operator press releases tell us. My rules of thumb are:

  • It must use 5G radios and 5G chipset enabled equipment (see above)
  • It must be commercially available. In other words, if you live in an area the operator says is ‘covered’ by 5G, you can buy a 5G device (hotspot or phone) and a 5G service plan. By that definition, AT&T’s 5G+ service is not commercially available today.
  • It must cover some critical mass of a launch market. My standard here is relatively generous, but an operator cannot launch 5G on a handful of sites in a major city and call that service ‘launched’. Everyone will have their opinion here, but I think a good rule of thumb is that 5G coverage is available in at least 25% of the footprint of that market. And not total Swiss cheese, either. So, if AT&T says 5G is launched in downtown Dallas, I’d expect that 5G light to be on in a reasonable swath of the downtown core.

I call on operators to be more transparent on 5G coverage. This does not mean they have to specify exactly where or how many cell sites. But something on the order of ‘we have 30%, or 50% of downtown Atlanta covered’. Or if the guy in the store can draw a rough boundary line. It is only when some sort of metric like this is available that anyone could be reasonably advised to pay a premium price for a 5G phone and/or 5G service plan.

What Will the 5G Experience Look Like? The best 4G LTE services in the United States today, generically called Gigabit LTE, can deliver some pretty killer speeds: I’ve seen 300 Mbps and better. It’s achieved by an alphabet soup combination of carrier aggregation (up to 6 CA now!), LAA, 4×4 MIMO, and 256 QAM. AT&T, Verizon, and T-Mobile are already delivering this in many cities – each of them marketing and branding the service slightly differently. These are the markets AT&T calls ‘5G Evolution’.

Truth be told, AT&T can sort of be forgiven for wanting to put a sexier brand around these Gigabit LTE markets, because with 60 MHz of new spectrum being deployed (AWS, WCS, FirstNet) and the alphabet soup above, the speed and capacity improvements are measureable. It is very possible that Gigabit LTE services, in many instances, will be as good as or better than 5G, at least for the next couple of years. In fact, if I was advising a customer who wanted the best overall data experience, I’d tell them to choose the operator with the combination of largest Gigabit LTE footprint and best capacity situation. Who that actually is varies from one market to another at this point.

The bottom line is threefold: First, we need to have an accepted definition of what qualifies as a 5G service. Otherwise, operators, and the industry, bear the risk of turning off customers and negatively impacting 5G adoption. Second, operators should be more transparent about 5G coverage. Don’t announce a market as ‘launched’ for the sake of a press release, especially if it’s only a handful of sites and customers cannot actually buy the service. Third, we all need to understand that for the next couple of years at least, there will be overlap between the best ‘4G LTE’ experience and early 5G services. Some 4G will look like 5G, and some 5G will look like 4G. A little confusing, yes, but that’s the new reality.

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Mark Lowenstein

Mark Lowenstein is Managing Director of Mobile Ecosystem, an advisory services firm focused on mobile and digital media. He founded and led the Yankee Group's global wireless practices and was also VP, Market Strategy at Verizon Wireless. You can follow him on Twitter at @marklowenstein and sign up for his free Lens on Wireless newsletter here.

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