Millimeter-wave 5G: Sluggish but Optimistic

On October 20th, Stefan Pongratz, vice president of delloro, said that even though the pace has slowed down this quarter, the outlook for millimeter-wave 5G NR remains optimistic, and equipment manufacturers' millimeter-wave 5G revenue is expected to reach between 1 billion and 2 billion US dollars by 2025.

Firstly, US operators continue to invest in millimeter waves, although the recent focus is clearly on frequencies below 6 GHz. Verizon remains committed to increasing the number of its millimeter-wave base station installations from 17,000 in 2020 to 31,000 in 2021. Other major US carriers, including AT&T and T-Mobile, are planning to invest in millimeter waves where it makes sense.

More importantly, according to GSA statistics, nearly 200 operators are investing in, planning or exploring millimeter-wave technology. Although the adoption rate remains uneven, it is expected that by 2022, the total number of 5G NR millimeter-wave site installations in Japan and South Korea will approach approximately 100,000. Even though there are some downside risks and it is increasingly unlikely for South Korean operators to achieve the set short-term goals, the delay may be temporary.

With millimeter-wave spectrum licenses now available in Europe (Denmark, Finland, Germany, Greece, Norway, Italy, Russia, Slovenia, Sweden and the United Kingdom), operators are beginning to explore how to leverage this incremental bandwidth use case over a wide range.

Although outdoor activities currently dominate the 5G capital expenditure mix and indoor deployments are disappointing, a series of indicators suggest that the future growth prospects for indoor millimeter-wave systems are solidifying, with multiple suppliers, including Contela, Corning, Ericsson, Samsung, and Sercomm, offering/announcing indoor millimeter-wave small cell systems/radios. Most suppliers already support 400 MHz bandwidth, while Ericsson's AIR 1279 supports 800 MHz bandwidth. In addition, operators are also gradually beginning to deploy incremental sites indoors. For instance, AT&T plans to deploy 5G millimeter wave at seven airports in 2021.

Suppliers are striving to improve the millimeter-wave business case, which will be key to overcoming some of the technical and economic challenges associated with higher frequency bands. Millimeter-wave repeater professional enterprises (such as Movandi and Pivotal Commware) have demonstrated that, compared with using gNB alone, gNB enhanced by Repeaters can increase coverage and reduce the number of required gNB sites and overall costs.

In addition to the advancements in repeater technology, technology leaders are also seeking to simplify the installation process of millimeter-wave CPEs. Nokia recently announced that it will launch 360-degree high-gain millimeter-wave antenna technology in 2022, which will be very helpful in simplifying the installation of CPE.

One of the more remarkable aspects of millimeter-wave spectrum is its potential to promote innovation in various use cases. MBB is now dominant, but FWA and industrial applications are on the rise. From the perspective of signal interference, the limited range of the millimeter-wave spectrum is quite attractive to enterprises. Some governments have begun to reserve spectrum for the deployment of private networks. For instance, South Korea plans to reserve 600 MHz of millimeter-wave spectrum, hoping to bypass telecom operators to accelerate the wider adoption of millimeter waves. Japan has reserved 28.2GHz to 28.3GHz for local 5G and is considering allocating more private millimeter-wave spectrum.

Although 5G NR millimeter wave is maturing and advancements in uplink/downlink technologies are helping to improve the business case, the reality is that when comparing the share of accumulated millimeter-wave RAN investment in the US market to the total RAN investment, there are currently some mismatches. Before the equipment adoption rate rises, there will be some asymmetry initially in the coverage stage. But clearly, operators will carefully weigh their options - investing 2% to 5% of capital expenditure in technologies that address 0.5% to 1% of total traffic is not always ideal.