Published on the 20/07/2018 | Written by Pat Pilcher

Will 5G signal a death knell for UFB…

It’s a nightmare scenario for Chorus and the other network providers involved in the Government-funded UFB build. With the build due to be completed in 2020, Spark, Vodafone and 2degrees will by then have upgraded their mobile networks to deliver 5G with data at speeds ranging from 1-10 gbps, easily matching what Kiwis can get from UFB and all on one bill instead of two, not to mention the grief involved in dealing with a fibre installer.

Which raises the question of whether 5G’s ability to provide fibre-like speeds anywhere with 5G coverage will render UFB obsolete? Like all things networking, the reality is far less straightforward than you would think.

Mobile networks are already showing promise to bridge the rural-urban broadband divide.

The ‘G’ in 5G stands for ‘generation’, and every 5-10 years or so we get a new generation of mobile technologies. Now the world is awaiting 5G, which will increase the speed at which data gets sent and received from connected devices. The new generation service will also improve the responsiveness of mobile data. Real-time tasks such as multi-player gaming or video calls rely on a data moving fast enough, so that little lag or latency is noticeable. The significant reduction in latency promised by 5G could open up new applications such as driverless cars and even telesurgery.

Using higher radio frequencies than 3G or 4G enables information to move at faster speeds, but a downside is that the effective range of higher radio frequencies is limited, diminishing the coverage of 5G cell sites.

Getting around this involves using lots of smaller cell sites located closely together. Where 4G cell sites are often 1-5km apart, 5G cell sites will get situated just 250 metres from each other, taking the form of mini cell-sites mounted on lampposts.

With the UFB build now around 80 percent complete and its adoption growing, (according to MBIE uptake is 30.9 percent, up 13.5 percent on the previous year) 5G will have its work cut out if it is to replace UFB.

Another factor to figure in is economics. UFB is available with Gigabit speeds and unlimited data plans costing approximately $100-$110. While Spark and Vodafone offer unlimited mobile data plans for around $75-$80 a month, these come with strings attached. Users on unlimited plans are not allowed to use their mobile devices as Wi-Fi hotspots and speeds get throttled downwards once a specific amount of data gets consumed.

Could this change? Will 5G plans become more affordable and suitable for home networks? Building new mobile networks is a costly undertaking. Spark is said to have spent $500m building their 3G/4G network.The costs of a 5G network build are expected to be even higher. Where 3G cell sites could be re-purposed to deliver 4G, 5G requires lots of smaller brand new cell sites, located close together.

Placing hundreds, if not thousands of new cell sites on lampposts throughout New Zealand will be a costly undertaking for telcos. Obtaining consents from utilities and councils may be the most obvious cost, but connecting cell sites back to phone exchanges will be the single most significant cost.

While lampposts are connected to the electricity grid to power streetlights, next to none have the fast fibre connections needed for a 5G cell site to function. Running fibre to lamp posts will be exorbitantly expensive. Because of this, it is possible that telcos could seek to initially charge a premium for 5G mobile plans in a bid to recover network build costs. That means using a 5G mobile as you would a home PC or tablet connected to UFB may, over the short term, be price prohibitive.

That said, 5G is expected to spur competition which could keep prices down. Ex CEO of CallPlus, Malcolm Dick confirmed last year that he was planning to set up a wireless internet network using radio spectrum he had kept from the $250 million sale of CallPlus. The new venture is to be called Blue Reach Services and would wholesale wireless internet using ‘5G’ technology.

Mobile networks are already showing promise in rural New Zealand as a means of bridging the rural-urban broadband divide. Could 5G be the answer? Skinny already offers 4G fixed wireless access at prices loosely comparable to broadband plans on offer in urban New Zealand, but limited mobile coverage still hampers rural uptake.

Data from the Connect Tararua survey highlights this. In one rural community, 83 percent of survey respondents had zero cell phone coverage at home, and 26 percent had no internet.

While there is demand for faster broadband in rural New Zealand, a combination of technical and economic issues may make 5G a non-starter. As already covered, the technology requires lots of small cell sites. These need fast data connections back to a phone exchange. In rural New Zealand, neither of these requirements can easily get fulfilled. Combined with the low population densities of rural New Zealand, the economics of 5G are unlikely to stack up. Satellite and 4.5G mobile broadband are likely to remain the broadband options of choice for the foreseeable future in rural New Zealand, even if ventures such as Blue Reach might change this.

While 5G is unlikely to displace UFB, it will probably complement it. Mobile data costs may have come down over time, but they are unlikely to match the unlimited plans available with UFB. Performance-wise, 5G is also likely to struggle to match UFB whose capacity is easily upgradable beyond the maximum of 1Gbps already on offer.