In dense urban areas, a mixed 3.5 GHz and mmWave set-up was considered more cost-efficient than using just one or the other...
Millimeter-wave (mmWave) bands can be cost-effective for numerous 5G use cases, particularly when deployed in combination with the mid-band spectrum, the Intelligence Unit of the GSMA suggested in a study released this week.
The study considered the total cost of ownership (TOC) for three important use cases in different regions, in each case comparing deployment of 3.5GHz-only against a mix of mmWave with 3.5 GHz.
“The total cost of ownership model we applied for each scenario included the costs of both capital and operational expenditure, the number of sites likely to be needed, the size of each area and the potential number of users,” Pau Casstels, head of economic analysis at the Global System for Mobile Communications Association told EE Times.
Asked whether the actual cost of acquiring the spectrum was included in the model, Casstels said it was not.
The comprehensive 50-page study was undertaken to ascertain exactly where it makes the most sense — from an economic rather than simply a technology viewpoint — to deploy networks using the ultra-fast but capacity-limited option for 5G.
“For many years now, we have heard from vendors and operators that mmWave is the next big thing, but in reality not much has happened. However, in the last 12 months, carriers have told us that the market is ready for this, and in many regions. Several vendors have also started offering the requisite special equipment to make this possible from a technical perspective.
“But what of the business case and the potential economic benefits?” said Casstels.
“Clearly, there are significant investment decisions involved” he added.
And of course regulators and governments have been eagerly studying the situation and the potential income from sale of the spectrum to make it all possible.
Some regions are proving to be quicker off the mark than others in releasing the frequencies involved. For instance, the US, South Korea, Japan Finland and Italy are ahead of the pack and, according to Casstels, Australia will soon join the party.
The US, for example, has initially released chunks of the 26 GHz and 28 GHz bands, and bandwidths ranging from 700 MHz to 3400 MHz.
Meanwhile, carriers globally have to find the right balance between offering all three of the relevant bands — low and mid-bands so as to be able to offer extensive coverage, and bandwidth rich bands for high capacity.
The GSMA opted to study the TCO for diverse deployment scenarios. Three focused on fixed wireless access (FWA), one mimicking an urban area in China, another in a hypothetical town in the US and a third in a typical enterprise office setting.
Two scenarios looked at deployment of outdoor sites in dense urban environments in China and Europe
The researchers used a model that considered the most important supply and demand factors. These were split into three categories: the spread and density of subscribers in a particular area; the inter-site distance that would be needed between cells; and an estimate of the number of users that would actively be downloading data using 5G networks at the same time.
All these scenarios were considered for deployment between now and 2025.
According to Casstels, the study and results have implications for all sectors in the industry.
“Perhaps our findings are most relevant for the operators — they need to be confident that mmWave is market ready and that it will be really viable and cost-efficient in the right circumstances. And if they do not believe there is any short-term gain, and hence do not make the right choices as regards the timing of deployment, they run the risk of being at a major disadvantage over the long term.”
As for the vendors, the main take-away from the study is that mmWave solutions can clearly achieve more scale. But the key here is the likely increase in traffic growth
“Unit costs will have to come down, and then vendors will see quicker growth, and demand will increase for more devices of all types. That will again reduce deployment costs. It is definitely a bit of a virtuous circle.”
When it comes to dense urban areas, a mixed 3.5 GHz and mmWave set-up was considered to be highly cost-efficient, delivering at least 100Mbps download speeds for 5G services when compared with 3.5GHz network only in both the regions studied. The results are said to be particularly sensitive to the intensity of traffic demand, and operator share in a given area, as well as the amount of spectrum assigned per operator in each band.
Similarly, in the 5G FWA scenarios, the cost of 3.5GHz + mmWave is seen to be lower than with 3.GHz only, as mmWave bands provide the important capacity for higher data consumption, while 3.5 GHz is used for coverage.
“Our sensitivity analysis shows that the cost savings could be greater in this case: 16% in urban China, 15% in suburban Europe and 27% in a rural US town for the baseline sensitivity case compared to a 3.5GHz only network,” says the report.
In the indoor office scenario, a mixed 3.5GHz and mmWave public network deployment — and where there is limited outdoor coverage — cost savings of up to 54% are feasible, the study suggests.
It should be noted that the GSMA only considered one side of the equation—though certainly the most important one. That is the cost of deployment.
The other major consideration concerns the revenues being generated.
But it is appropriate and welcome that the Association should offer an economic justification for deploying the important mmWave technology as 5G continues to take traction.