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What does the arrival of 5G mean for Access optics?

LightCounting releases a research note summarizing discussions on wireless xhaul and FTTH optics at OFC and at the FTTH Conference held in March 2019.

 

The 5G revolution has started, although most consumers won’t have noticed. Verizon activated its 5G fixed wireless mobile broadband network in Chicago and Minneapolis ahead of schedule, on April 3rd. Also shooting for a ‘world first’, last week saw the coordinated commercial launch of 5G mobile services by South Korean operators SK Telecom, KT and LG Uplus, when sales of Samsung’s 5G-enabled Galaxy S10 smartphone began.
The need for high capacity fiber links to connect an increasing number of 5G cell sites will augment the global roll-out of fiber-to-the-home (FTTH) networks over the coming years - with the unification of fixed and mobile networks high on many service provider wish lists. With publication of our Next Generation Access Optics report still six months away, we thought it would be useful to clients if we provided an update now on this area, based on a wealth of new information obtained at the recent OFC and the FTTH conferences, which both took place in March 2019.

Historically, the top five consumers of optical fiber have been China, South Korea, Japan, India, and the United States, accounting for 80% of overall worldwide demand. These same five countries are expected to spend more than $700 billion collectively building their 5G mobile networks, over the next 10-15 years. Since 10-15% of the overall network cost is in the equipment, this means 5G represents a $70-$100 billion opportunity for the equipment suppliers including Huawei, ZTE, Ericsson, Nokia, and others.


Scenarios for 5G deployment

When it comes to the speed of 5G deployment, the world is split into two camps. In China, the operators will follow the same script that they used for 4G LTE, rapidly deploying a nationwide network. In the rest of the world (where investment is driven by market forces), 5G is going to be a slow-motion evolution rather than an abrupt market dislocation, as LTE-Advanced (4G) is already serving the mobile broadband market well. In fact, one OFC panelist remarked that “Not only isn’t 5G here, but there is very little consensus among operators on what they’re going to use it for.” What there is consensus about is that 5G will be deployed for several distinctly different use cases.


The ITU has described several deployment scenarios for 5G, as outlined by Huawei during a talk at OFC. In Huawei’s view, some early 5G deployments, including Verizon’s, will be for fixed wireless broadband service over millimeter wave spectrum, which will allow mobile operators to compete with the incumbent cable MSO or carrier service provider. Next will be 5G enhanced mobile broadband (eMBB), which will provide higher speeds and/or greater capacity and will be focused on high-end consumers such as gamers, as well as enterprise/office services. Ultra-Reliable Low-Latency Communication (URLLC) will be deployed strategically, in areas where a need for URLLC service exists. And finally the last 5G deployment wave will be to provide very broad coverage of 100 Mbps service in support of rural areas and ubiquitous IoT applications.


LightCounting subscribers can access full text of the research note at: https://www.lightcounting.com/login.cfm


LightCounting’s next Market Forecast Report, to be published by the end of April, 2019, will include an updated Access Optics forecast (covering fronthaul and xhaul). Our annual Next Generation Access Optics report will be published in November 2019.

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