Our assessment: 5G will make a spurt in 2023 (Source: Gerd Altmann / Pixabay)

New year – new luck? While 5G is only just coming to the attention of many IT and industry decision-makers, 6G is already being discussed – although this technology is not expected to reach market maturity until 2030. We have therefore looked to the near future: What should happen this year, and what can we expect for the next two to five years?

The easiest way to answer the question is on the technical side: The most important manufacturers of modem chips and communication modules want to update their products to Release 16 in the first and second quarter of 2023. Test samples and small quantities have been available since last autumn, and in the coming months the quantities are now to be increased to meet market demand.

Release 16 at the start

The 5G R16 specifications had already been completed in mid-2020. Partly due to the delays in the corona pandemic, but partly also due to the complex technical requirements, the implementation in silicone took about two years – more than expected.

In particular, users in industry can rejoice: The URLLC (Ultra Reliable Low Latency Communication) use case is finally being implemented in hardware that enables lower latency times and high reliability in data traffic with increased priority. Even a bridge to Time Sensitive Networks (TSN) was implemented for the first time. Another point that benefits autonomous vehicles in intralogistics, for example, is the improved positioning using GNSS and procedures dependent on radio access technology (RAT).

Other advances include network slicing, i.e. the creation of parallel virtual networks that are secured against each other and can meet different requirements, even though they are based on the same hardware. Energy efficiency has also been improved, as has support for Multiple Input Multiple Output (MIMO). At the same time, a sidelink will be introduced that enables vehicle-to-everything communication (V2X), for example between several vehicles or between vehicles and smart traffic infrastructure. Details on these and other aspects of 5G R16 can be found in our in-depth article “Work in Progress”: How 5G is evolving.

Release 17 available from 2024

It was not until mid-2022 that the final status of Release 17 was reached (“Protocol Coding Freeze”, ASN.1). Corresponding modem chips could be presented at the end of this year, but industrial customers should not expect larger quantities before 2024. Lower hardware requirements, easier bundling of different frequency ranges, further improvements in energy efficiency, latency, positioning accuracy and bandwidth as well as additional functions to support private networks (campus networks) and edge functions are just some of the most important advances of the next release, which will benefit industrial users in particular. More information on Release 17 and the following Release 18, which is intended to introduce “5G Advanced”, can be found in the article 5G Release 17 and 18: 3GPP launches “5G Advanced”.

Where is the market going?

One of the most discussed topics is Open RAN – the possibility of mixing wireless technology from different manufacturers. This is associated with several advantages. This is intended to break the dominance of the major providers – Ericsson, Nokia and Huawei. On the one hand, this means avoiding a manufacturer lock-in and, on the other hand, being able to choose from a larger number of providers. Both should have a positive effect on price developments. In the case of Huawei, the possible replacement of certain components is added, as politicians want to exclude an influence of Chinese actors on the critical communication infrastructure of their own country. In addition, Open RAN should make it possible to combine the best technology in the various RAN segments.

The market analysts of the Dell’Oro Group updated their forecasts in a recent report at the end of January. Accordingly, Open RAN sales have accelerated faster than originally expected in recent years. For 2027, the share of investments in Open RAN is expected to grow to 15 to 20 percent, according to the new figures. In North America in particular, market observers expect a significant increase. At the same time, Dell’Oro points to supply and installation risks that could prevent the commissioning of the equipment – and thus the revenue expectations of telecommunications providers – from keeping pace with investments.

Overall, however, important stages in the expansion of public 5G networks in the largest markets have already been achieved, according to the forecast by financial analysts. They rely on announcements by AT&T, Verizon and others that investment in 5G could now be slowly scaled back. Instead, they want to strengthen their fibre-optic capacities. Headlines that the 5G market could cool off this year are therefore primarily related to investment activity in the major industrialized countries.

An essential aspect of 5G is its use in IoT applications, because the Internet of Things (IoT) benefits particularly from fast, high-bandwidth wireless communication connections. According to Juniper Research, the number of 5G IoT connections will grow to 17 million this year. In the following three years, they multiply to 116 million. In particular, smart city and healthcare applications are leading the way. For these segments, market experts at Juniper Research predict growth of 1,100 percent by 2026.

What does politics do?

It is still unclear how Chinese providers will be able to participate in the development of 5G in this and the following years. On the one hand, media report on a planned tightening of the US government in dealing with Huawei. Following China’s more confrontational course, the export licenses granted to Huawei so far – some of them generous – could be completely denied in the future. This would call into question how long Huawei can maintain its existing supply and service obligations.

On the other hand, ZTE reports that it has successfully completed the NESAS certification (Network Equipment Security Assurance Scheme) of the Federal Office for IT Security (BSI) in Germany. Accordingly, its 5G NR products are the first ever to be officially certified as fully compliant with German security requirements. Immediately, of course, the question arises: Will Huawei products also receive such certification? And will the US intervene in any form in such a case?

And while public and private 5G networks are still being built diligently, the development of 6G is already making great strides. All major industrial nations are pumping subsidies into the development of the next generation of mobile communications. Because everyone hopes that with 6G the cards will be completely reshuffled and they can overcome the failures of the past.

Many open questions

Numerous other aspects can influence the development of 5G and 6G in the medium term. Examples include:

  • Intel sees itself as a leading supplier of accelerator processors for vRAN and O-Ran (virtualized RAN / Open RAN). But even in this market, ARM architectures threaten the position of the chip giant. Various players in the Open RAN market are very satisfied with the development of highly specialized, efficient processors. It is still unclear when the results will reach market maturity.
  • 5G use cases increasingly include the spectrum in the millimeter wave range, which starts at about 26 GHz and enables much larger bandwidths due to many unused frequencies. But these are bought with a much smaller signal range. The extent to which 5G mmWave proves to be practical beyond indoor spaces and the application as a “fixed wireless access” (FWA) is not yet clear.
  • As part of a vRAN or Open RAN approach, Microsoft, Google and Amazon offer their public clouds as a home for the 5G network core and other services. They advertise that standardized, scalable infrastructures could simplify and accelerate the construction and expansion of networks. So far, however, the concept has not had any significant success either among the major mobile operators or in the area of campus network operators. Because that would mean entrusting central data streams to the US IT companies.
  • The buzzword of the “single-vendor RAN” is making the rounds more and more frequently. This means that the components of different manufacturers are not put together, which is currently still often associated with complex compatibility tests. If only one supplier is used, who supplies Open RAN capable components, you can now start cheaper and faster, but still use the advantages of the open standard in the later when upgrade or retrofit.

After all, one point of the 5G development seems to be finally clarified: Latest by February 24th in 2024, US mobile operators will be allowed to use their frequencies in the C-band without restriction in the vicinity of airports. Until then, the affected airlines must convert their aircraft with suitable altitude sensors. For the approximately 1,000 aircraft, the US aviation authority FAA estimates costs of around 26 million dollars. That 5G leads to plane crashes, is therefore not to be feared.

Our assessment

The editorial team of fuenf-G.de speaks to many market players, for example in our format “Five questions to…”, at press events and various events. Our impression is that a change is taking place: 5G technology as such is no longer the relevant point. But now the solutions are coming more to the fore. So it’s less about specifications and performance data, but more about practical questions: How can 5G help me with pressing problems? What new opportunities does 5G open up for my business model?

This can be seen, for example, in the current trade fair calendar. The events with “5G” in the name are becoming fewer, instead exhibitors and solutions can be found at events that, for example, focus on IoT. There are also references to the new generation of mobile communications providers who do not have 5G-capable products in their portfolio themselves – but who rely on 5G data communication in their use cases.

The expansion of public networks is also making great strides, where not only is coverage growing across the board, but a technology upgrade to more 5G stand-alone networks is already being carried out. Another positive development can also be seen on the part of user technology. As early as the second quarter, the availability of 5G modems and 5G routers that support Release 16 is expected to increase significantly. The manufacturers and distributors have announced that communication modules will be up to 30 percent cheaper than the previous generation.

So there will soon be enough hardware, public 5G networks in most regions, profitability is improving and more knowledge about possible applications is available – ideal conditions for entering campus networks, smart logistics, digital healthcare and many other IoT topics.

In our view, 2023 is the year in which 5G will take a significant step forward. For companies, there is really little reason not to deal with this technology. On the contrary, data exchange and data analysis are becoming increasingly important in many industries. Those who fail to examine the possibilities of wireless, mobile data communication to optimize their workflows and the further development of their own business model are giving important opportunities for the future!

We will therefore continue to provide you with exciting use cases, information on new products and the assessments of relevant market players to support you in using this important technology. And we also look forward to your input – on new projects and services, on our own experiences or on possible cooperations and partnerships!