5G: Is the Shine Coming Off Already?

Some are playing down expectations for the standard ahead of investments
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LONDON — At the recent 5G World Summit 2018 in London, European cell companies Swisscom and Three UK “...played down expectations of a 5G-related boost in customer spending or a capital expenditure increase by their own companies,” according to lightreading.com

Three UK CTO Bryn Jones said he saw no reason for much increase in capital expenditure as his company starts to build a 5G network. Heinz Herren, the Swisscom AG CTO, echoed those sentiments, saying that 5G investments could largely be managed within today's "capex envelope."

There may be capital increases associated with the use of more sophisticated antenna systems as well as investment in underlying fiber networks, according to Jones. "When you look at massive MIMO, those antennas are heavier and bigger and there is more spending in that area than we had in moving from 3G to 4G," he said in the same Light Reading article. Jones noted that there is also a much higher requirement for fiber backhaul.

"The Swiss market is flat and so it is really difficult to add 5G and sell it and personally I think we are having too many discussions around the business case," said Herren. "I think if your main business case is connectivity there is no question about doing 5G, but I don't think you will see additional ARPU [average revenue per user],” he said, again from the same article.

Last month, Italy’s communications regulator Agcom announced plans to hold an auction for spectrum suitable for 5G next-generation services this September. It’s expected that the sale of the spectrum will allow the Italian government to raise at least €2.5 billion ($2.9 billion), with half of that revenue expected to come in this year, reports rcewireless.com. The starting bid for the 700 MHz spectrum, split in to six slots, is approximately 2 billion euros.

However, Italian broadcaster Mediaset and media group Cairo Communication have filed an appeal with a regional court against Agcom’s proposed auction of 5G frequencies, according to the same article. The frequencies in the 700 MHz band are currently used by several TV groups including Mediaset, state broadcaster RAI and Cairo, which would all have to give up the frequencies.

Italian cellphone operators Telecom Italia, Vodafone Italia, Wind Tre and Fastweb were initially expected to take part in the 5G auction — however, they were also considering a boycott of the 5G auction process as they believed that the starting price set by the regulator for the spectrum in the 700 MHz band was too high, according to the same article. Operators also considered that “the current rules of the auction were too rigid for them to participate.”

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