Despite the hype surrounding 5G, we hardly ever see any applications using the technology today. Are telecom operators too cautious about investing today? Or is 5G not necessary yet?

Take the time machine to the nationwide rollout of 3G in 2004. Proximus launched its 3G offering in six major cities on May 13, a first in Belgium at the time. If you plug a compatible 3G card into your laptop, you’ll theoretically get up to 384kbps of bandwidth.

The hardware to make your laptop 3G-capable then cost 371 euros without VAT. Data packages are available from 2 euros for 1 MB. The most expensive formula had a data limit of 100MB and cost 50 euros per month. Proximus paid 150 million euros for the 3G license in 2001.

Aside from ‘rocking’ the phone, mobile internet wasn’t really a thing back then. It wasn’t until the introduction of the Apple iPhone that the ball started rolling and mobile internet has become commonplace.

Slow 5G expansion

In our conversation with Mariam Sorond, CTO Service Provider and Edge at VMware, she points to the pioneering role that telecom providers were at the time. “The most important application back then was text messaging, and yet vendors pushed ahead to make the technology fit for the future.” After national 3G networks became a reality around the world, the devices followed and opened up a world of possibilities.”

Almost 20 years later, after the adoption of 4G, we took the step to 5G. In Belgium, the network spectrum auction was delayed by several years, but since the middle of last year the spectrum has been officially auctioned among five telecommunications operators.

They still make a lot of money with the current 4G network. Why would they renew this expensive network?

Mariam Sorond, CTO Service Provider and Edge at VMware

Here and there you can already receive 5G in the big cities. The big difference from the past is that 4G is already more than fast enough for many people. Why switch? “You also have to put yourself in the shoes of the telecommunications provider,” says Sorond. “They still make a lot of money with the current 4G network. Why would they renew this expensive network, which was a significant investment at the time?”

The iPhone moment

While the iPhone has accelerated the push towards 3G and the smartphone world that has evolved towards 4G, there is no immediate need for a step up. You can see that in the news today. 5G used to be placed behind every smartphone model to show compatibility, now that’s gone. Also, advertising to operators is much less focused on 5G, while this used to be the case for 4G.

“I don’t really understand the telecom operators either. For years, they’ve wanted a piece of the corporate market pie. With 5G, they can finally do that, but I don’t hear that many companies are considering a move from Wi-Fi to 5G,” says Sorond.

She speaks from an international perspective, with a focus on the United States. In Belgium, almost every fifth company would be interested in a private 5G network. We have distinguished ourselves as a leader in Europe despite our false start due to the political unrest surrounding the 5G auction.

B2B potential in Belgium

Belgium’s sprint is largely thanks to two new national operators, Citymesh (along with Digi) and NRB. They are solely focused on the business market and need to build a whole new network. They will greatly benefit from 5G being rolled out to everyone as soon as possible.

“Compare it with Dish in the US. you are one green meadow operators and were allowed to start with a blank sheet of paper. Without a technical inheritance, you can inherit brown field Drivers sprint off the wheel,” says Sorond. In your opinion, there is a great danger there. Nowadays, operators face the chicken and egg problem.

“Future prospects like AR, the metaverse, remote operations, self-driving cars — they all need that thicker data pipeline first to stand a chance.” Additionally, telecom operators today still all too often view their network as a dumb conduit. Everyone earns money on this connection, while the providers have crumbs left over.”

European regulations

In the latter case, Sorond is pleased that Europe is playing a pioneering role. “It doesn’t make sense that Google makes billions from advertising but providers get nothing in return.” She is very curious about how legislation can ensure providers regain partial control over their network. Today, Europe is still in the research phase.

In theory, more money should mean more investment, which benefits us all. The European lobby of telecom operators (ETNO) advocates fair remuneration. In May 2022, it was estimated that the big players like Amazon, Google, Apple, Microsoft, Meta and Netflix together accounted for 57 percent of global internet traffic.

Technology companies that incur higher costs can then pass these on to the customer. But they can also downgrade their services, for example by reducing the bitrate of streaming videos. That would hurt the quality and customer experience. In South Korea, additional taxes would affect the quality and security of end-user services, the European Internet Exchange Association (Euro-IX) said in a letter.

5G with two speeds

Regardless of which position Europe takes, it will have little impact on the big issue that the 5G hype has died down today. If we consider the Gartner hype cycle, we are now at “low point of disillusionment”. This is followed by the “rise in relief” to finally reach the productivity plateau.

Today we mainly see a 5G with two speeds. On the one hand, there are the companies that have an enormous number of use cases, some of which are already being actively developed today. Seeing innovation leads to innovation, which means that we will become important very quickly in the 5G business field. Citymesh and NRB are already alert to (further) develop this market.

There is very little motivation for consumers to embrace 5G today, and there will be little in the future. The killer app is not that far yet, because the iPhone was the trigger for the explosion of the mobile Internet. That is not the case with 5G. The fact that telecom providers are reluctant to roll out the technology nationwide doesn’t help. What that spark might be, only time will tell.