One of the most perplexing questions about the advent of 5G cellular is how to cost justify the requisite and massive capital investment for this extraordinarily, gigantic infrastructure that underpins these colossal networks. I have yet to envision a means to a return on investment for the carriers when you consider the size, scale, and scope of the infrastructure. I just do not get it – yet!
If I cannot fathom the CapEx expense, I struggle even more to comprehend the validity of the OpEx expenses. If you can get these 5G networks built, then how can you afford to live with them and maintain them?
The operating costs will be extreme. With costs for truck rolls increasing every year, sending a fully equipped service truck to troubleshoot and repair a failed radio node will be exorbitant.
New Sites and Reinforcing Existing Sites
Now, the large cell sites that number around 14,000 locations in Canada will be dual illuminating 4G and 5G, so they will need to be rebuilt to accommodate both systems and the towers and height assets will likely require structural reinforcement under the new and stricter S37 tower structural loading standards. If we assume that between 25,000 to 40,000 small cell sites will be installed in Canada to augment the large cell sites, then the installation and maintenance cost skyrocket upwards.
We need to connect all of these large and small cell sites together too. With the astronomical data rates predicted for 5G, and the need for essential flows of contiguous data, these inter-network connections will need to be substantial. The microwave feeders used for 4G will not offer the capacity that is expected so optical fibre is mandatory for these last mile and middle mile links. The backhaul connections will be optical fibre too.
A Federate Network
As federation is essential to the 5G designs, this means that servers will be placed all over the network fabric in strange and unlikely locations to facilitate edge computing. These servers will perform compute, storage, and analytics at the network’s edge so these computers will be collocated on utility poles, street lights, rooftops, and a myriad of other oddball locations where we have never seen servers before. Can they survive in these locations? How does a qualified computer technician get to them to repair them? Are we moving towards a swap-out model so the installer pulls out the defective unit and replaces it with a new unit so the computer technician can fix the failed unit on the bench?
Powering these Sites
Oh, by the way, we also must provide power to these large and small cells. Now, the large cell sites already have power and rarely they have standby and backup power systems. But, powering 40,000 small cell sites will be prohibitively expensive to do. Historically, utilities charged carriers a fixed rate for power of optical fibre transport on the poles and buried underground. However, this is about to change too. Utilities now want to meter these services and charge as per actual consumption of power. So, many, many tens of thousands of communicating smart meters will now be installed to the optical networks and the small cells. The large cell sites largely have these smart meters already. Will these smart meters be a source of RF radio interference? Time will tell.
Site Acquisition Costs
In most cases, the need to hang last, middle, and backhaul optical fibre and install small cell sites demands leases for connection costs. Seeking pole rights and rooftop rights will like get very expensive in light of the massively increasing demand for height assets for stringing glass and installing small cells. Will suitable power be available at these sites too? What level of effort is required to make these sites ready for operation?
Grounding and Lightning Protection
Throughout my career, I have learned from some of the best engineers around about grounding and lightning protection. This is a high art form and not a skill that is easily acquired today. So, even this somewhat black art of telecommunications strikes me as one that will seriously challenge the carriers and cost a fortune to facilitate. The use of optical fibre will help greatly but the code must be met for all installations and the costs will be significant.
Qualified Crews and Equipped Trucks
One of the most frightening aspects is the sourcing of crews and trucks to install all of these sites. Unions will undoubtedly want to control this aspect, and I am okay with that idea. The main problem is that most crews are veteran and older workers are not ideal for challenging installations. While they normally are more experienced and that attribute is critical for success, they are not as physical capable for the climbing and hard to reach installs. That physical aspect is a younger person’s game.
The gender bias in the technical installation business is so lopsided by today’s norms that the installation industry is living in the past and prehistoric in its lack of women installers, technicians, technologists, and engineers. A female installer is a very rare sighting these days. So, maybe the answer lies in finding a way to attract women to this industry. I see absolutely no logic to this imbalance.
A fully equipped bucket truck can cost $200,000 to $350,000 depending upon the vehicle costs and the requisite attachments to make the truck functional. Populating the truck with a necessary test equipment and spare parts in also an expensive proposition. Service and maintenance of this fleet is costly too.
The 5G installer will need a vast array of skills. These personnel do not exist today. So, do we have several people go to a job site or do we train super installers? What is the cost for this training and how long does it take?
Finding, training, supporting, and equipping qualified crews is likely the single biggest hurtle to 5G success and its greatest cost centre.
Since the 5G network is federated by design, then the mandatory security systems must also be federated to protect the systems and the users. So, the installers need to facilitate a comprehensive security solution to a known set of standards to protect the operators and the customers. How will this be done? Who will do it? How much will the securing of the 5G network add to the build and operating costs? Where do we find these skill sets and personnel?
Green and Health Safety
This year we all saw the biggest shift towards all things that are green and environmentally friendliness compared to the past 25 years combined. We are seeing marches in the streets, shifts in voting patterns, and a global awaking to save the planet. The 5G technology is often targeted for its RF radiation and risk to health as a major plank in the environmental arguments. The younger generations are leading this transformation in social awareness.
Software Defined Networks
Part of the answer that may help to make these 5G networks viable is the advent of software defined networks (SDN). Along with a central orchestration model, that permits configuration, monitoring, and repair remotely is mission critical to the viability of 5G networks. We will never get nor can we even afford to get, the right resources at the edge locations. But, why do we need to get them to the edge if we can work remotely and perform all of the repairs from a centralized office? That office does not even need to be in Canada. So, will jobs be sent offshore to India, China, or elsewhere? If we worried about the Chinese threat for the sale of hardware to build these 5G networks to begin with, perhaps the larger threat is the remote control service and support issue? By virtualizing the network functions and using generic pizza box style servers at the network’s edge, we can greatly reduce the infrastructure costs. But, at what risk?
I can go on and on, but I hope that you see my point by now. The endless list of build and operating issues is mind-boggling long to me. Each attribute costs a king’s ransom and demands workers that I fear do not exist today. And, this is why I cannot see the requisite ROI for carriers.
Whenever I get to the research point about the killer apps, they always cite video streaming as the one application to cost justify these 5G networks. But, is this really the right use for these networks? Will consumers actually pay the huge costs to stream YouTube or watch sports? Sure, the demographic models are radically different between the boomers, generation X, Y, and Z age cohorts, no argument, but I am also seeing a gigantic age immune swelling into a massive resistance of consumer fatigue to support the exorbitantly high costs for all of the monthly services costs. Consumers are starting to reduce monthly bills, cut OpEx costs, and maybe return towards a few CapEx models, or simply outright shed these media assets as not being necessary for a quality lifestyle today. This consumer fatigue can be the undoing for 5G if the CapEx and OpEx does not kill it first.
About the Author:
Michael Martin has more than 35 years of experience in systems design for broadband networks, optical fibre, wireless, and digital communications technologies.
He is a business and technology consultant. Over the past 15 years with IBM, he has worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He is a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX).
Martin currently serves on the Board of Directors for TeraGo Inc (TGO: TSX) and previously served on the Board of Directors for Avante Logixx Inc. (XX: TSX.V).
He has served as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology.
He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) [now OntarioTech University] and on the Board of Advisers of five different Colleges in Ontario. For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section.
He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has three undergraduate diplomas and five certifications in business, computer programming, internetworking, project management, media, photography, and communication technology. He has earned 15 badges in next generation MOOC continuous education in IoT, Cloud, AI and Cognitive systems, Blockchain, Agile, Big Data, Design Thinking, Security, and more.