Pricing for 5G unclear, but cost per GB could drop: Deloitte expert

There are still many unknowns as wireless carriers move to 5G networks in the coming years, including questions about how much companies will charge for service, though prices have the potential to drop and carriers are unlikely to charge a premium, according to Deloitte Touche Tohmatsu Ltd.’s Duncan Stewart. The new technologies carriers will implement in the transition to 5G could take advantage of unlicensed spectrum and prices could fall, said Stewart, Deloitte’s director of technology, media and telecommunications research and co-author of the annual global report outlining the company’s predictions for the coming year, released Wednesday. “There is the potential that you could see the cost per bit drop significantly, and therefore we would see prices for data, instead of it being $60 for 2 GB, it could be $60 for 20 GB, $60 for 200GB… we just don’t know,” Steward said in a phone interview. “It really all depends on the cost of the equipment and how well everything works and consumer demand,” he said. “Theoretically, if you’re able to do this in unlicensed spectrum, that eliminates one of the very, very large costs of previous generations of wireless.” Stewart also said it doesn’t seem like carriers will use differential pricing for 5G service. “When LTE came out, very few carriers worldwide were able to charge a premium for it. It was something they offered, it was a competitive differentiator, it was a way of keeping or retaining clients, but it was not generally a ‘you can have 3G for $30 a month but LTE will be $50,’” he said. Another unknown is for which applications and services customers are actually going to end up using these new networks. The report predicted that “the availability of higher speeds will likely reveal uses we cannot currently imagine and needs people did not realize they had. There will likely be multiple ‘killer apps’ for 5G.” Stewart noted that “faster speeds create their own use cases.” “Nobody spends a lot of time and money building an application that requires 500 Mbps mobile if the network doesn’t exist. It’s only once the network is up and running that someone says, ‘hey, let’s design to that spec.’” He added, however, that factors like the low latency required for gaming, and 4K video could be drivers for the need for higher speeds. The launch of 5G will take place in stages, the report noted, with carriers upgrading to the LTE advanced and LTE-advanced pro protocols before full 5G. Stewart said the transition to LTE-advanced pro is likely to happen sometime this year or next year, with Canada’s biggest carriers already having upgraded to LTE advanced. Currently, various Canadian carriers are in the process of testing 5G. “We see it all as a continuum. It’s a stepping stone towards the next generation of technology,” he said. “It’s going to be almost exactly like the transition between 3G and 4G. These are the interim steps. It allows carriers to figure things out, customers to figure things out and pricing to settle down.” Another prediction in the report is that distributed denial-of-service (DDos) attacks will be larger in scale and more frequent, partly because of the growing number of insecure Internet of Things (IoT) devices. While any website is vulnerable, online streaming services are among entities that the report said should remain on alert. “Obviously, online streaming, because it’s so high-bandwidth, even small interruptions or small degradations of service levels have very significant impacts on the user experience,” Stewart said. “And we are going to see more of these attacks and more big attacks, so it’s just something we wanted to put on people’s radar.” The growing number of IoT devices means that someone can, for example, gain access to a device like a camera by using a username and password “that has sometimes been factory set and is incapable of being reset,” Stewart explained. “So I would gain access not merely to a video camera but to hundreds of thousands of video cameras simultaneously,” he said. An attacker can use software to “seize control of those devices and direct them to send their images, their files, to another website that is then my target for a DDOS attack.” The report also covered the TV sector, predicting that in the United States, television advertising will be flat in 2017 compared to 2016, and noted that “for an industry widely thought to be following the sharply negative trend of other traditional media, flat is the new up.” The report also said there may be a trend of ad dollars that had gone to digital in recent years moving back to TV, something that’s also been referenced recently by a media executive and analyst, though Deloitte noted in the report it’s still an unconfirmed trend. Stewart said the trends in the Canadian TV market are generally the same as in the U.S. “Whether you’re an advertiser north or south of the border, TV is not growing — it’s not growing double digits or anything like that. But it remains a completely important and legitimate way to reach large audiences in a cost-effective way,” he said. “It’s not about to experience a newspaper-level kind of annual decline.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Charelle Evelyn at cevelyn@thewirereport.ca

Pricing for 5G unclear, but cost per GB could drop: Deloitte expert

Broadcast | January 11, 2017

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Pricing for 5G unclear, but cost per GB could drop: Deloitte expert

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