As Verizon launches it’s fifth-generation (5G) wireless service in a few small markets this week, it is a good question to ask whether 5G could ultimately provide internet connectivity to every device, including those that are now wired. If 5G can completely replace the need for wired internet, building owners could simply rely on the wireless carriers and bypass the cable companies or any wired solution.
Do we think that is going to happen? No. There are too many fundamental issues with wireless networks that will continue to make a wired solution preferable for tenant spaces. And that doesn’t mean cable, either. The Aditum Internet Management System provides high-quality, ultra-reliable internet connectivity that doesn’t require tenants to deal with a third party provider, all while providing a revenue stream for building owners and managers, and the Aditum partners that install the system. That’s a tough combination to beat.
However, the wireless carriers, Verizon, ATT, and Sprint/T-Mobile (they are planning to merge), would certainly like you bypass the cable companies and go all-in on their 5G. The carriers will be spending multiple billions of dollars each to upgrade from 4G/LTE networks to 5G, and recouping that investment is a high priority.
At the same time, the broader consumer market is ripe for a shift. Cable companies have notoriously poor service ratings from their customers. Consumers have been moving away from bundled offerings towards streaming on internet, depriving the cable companies of the high-margin revenue streams upon which the industry was built. Rural areas are too expensive to build-out with higher-speed networks, leaving vast areas of the country (albeit with a low population density) with slower speed internet. Structurally, cable company networks are networks of networks, which complicates everything and in no small part leads to the poor customer service reputations. And the cable companies have successfully neutralized Net Neutrality, the erstwhile requirement to treat all data equally. Their ability to throttle data in favor of more profitable traffic might be just a short-term win, however, as consumers will chafe at the restrictions, making them more receptive to competitive offerings.
Could 5G wireless overcome these cable company competitive disadvantages and win cable converts? Wireless carriers do have some advantages. First, even though wireless data plan costs are surprisingly high, wireless carriers haven’t seen their revenue strategy upended like the cable companies. All-inclusive, no-limit wireless plans were successfully limited in favor of the traditional a la carte base plan/overage approach. Wireless carriers also successfully ended the consumer addiction to device subsidies in favor of today’s device leasing schemes.
Wireless does have some of the same issues when it comes to building out their networks, however. Low population density geographies are more expensive to serve. The network frequencies can be an issue, too. Higher frequencies don’t travel as far or penetrate walls as well as lower frequencies. (Verizon’s 5G is a high-frequency product). Wireless and cable companies both share the contention-ratio issue, where a fixed network capacity is forced to serve too large a demand. Wireless also has issues around atmospheric interference; one example is what we used to call ‘green-leaf network attenuation’ when wireless coverage complaints would rise every spring and decline every fall.
But the most significant reason to suspect that wired internet won’t soon be supplanted by 5G wireless is perhaps the very prize that 5G seeks the most: the internet of things (IoT). IoT is projected to explode as soon as 5G is in place to support it. While each ‘thing’ should on average demand very little of wireless network capacity, the number of connected things is expected to grow exponentially, and likely in directions that are not yet fully understood. It is reasonable to expect 5G to be the optimal mobility solution, with fixed (wired) connectivity best for (large) objects at rest.
Back to the original question: could 5G be the internet solution for your tenants in lieu of wired internet? We don’t think so. Cable isn’t the answer, either. Your best bet is Aditum. The Aditum Internet Management System provides your tenants with internet service that is far better than cable service, avoids the wireless network congestion that will come with IoT, and provides building owners and managers with an additional revenue stream.
For more information about the future of internet connectivity and Aditum, please give us a call.