Mobile operators are quick to list the potential benefits of 5G networks: streaming video, smart manufacturing, and self-driving cars are among the use cases mentioned most often. These are all end-user benefits, but for the network operators, the primary benefit of 5G is likely to be a lower cost structure.
“The cost aspects of it are key,” said Ericsson CTO Erik Ekudden. “As we move into the new bands here we are offering higher capacity. Wider bandwidth itself provides a cost benefit.” Ekudden added that radio efficiencies are complemented by automation in the management of network traffic.
Ericsson projects that with 5G, an operator’s cost to deliver a gigabyte of data will be one tenth the cost to deliver a gigabyte on a 4G network. The company’s cost models compare today’s LTE networks to evolved networks that will use both LTE and 5G.
“A site fully evolved with 4G and 5G capacity will deliver mobile data 10 times more cost efficiently
than a basic 4G site does today,” Ericsson explained in a published report. “On a network level, this
efficiency gain will be needed to manage the significant increase in mobile data traffic, considering a limited capex budget.”
5G may help operators keep up with data demand, but it is also expected to be a revenue generator for some. Analyst Joe Madden of Mobile Experts has noted that the content assets Verizon and AT&T are acquiring will be very valuable on networks that can stream a high definition video feature film for a fraction of what it costs operators to deliver mobile video now.