5G Chetan Sharma Consulting

2015
5G:
THE PAST, PRESENT AND FUTURE OF
THE MOBILE INDUSTRY EVOLUTION
CHETAN SHARMA
5G: THE PAST, PRESENT, AND FUTURE OF THE MOBILE INDUSTRY EVOLUTION
Table of Contents
Introduction .................................................................................................................................... 3
Historical Evolution of Network Technology ................................................................................. 5
The current state of 5G ................................................................................................................... 8
What will 5G look and feel like? ....................................................................................................10
Shifts in Ecosystem Control Points................................................................................................ 13
Wireline and Wireless are becoming the same network ............................................................... 16
Winners and Losers .......................................................................................................................18
Conclusions .................................................................................................................................... 21
Acknowledgements ....................................................................................................................... 22
About Mobile Future Forward ...................................................................................................... 22
Mobile Future Forward Publishing .............................................................................................. 23
Papers ..................................................................................................................................................... 23
Books ....................................................................................................................................................... 23
About Chetan Sharma Consulting ................................................................................................ 24
About the Author .......................................................................................................................... 24
Disclaimer
Chetan Sharma Consulting is one of the most trusted advisory firms in the global mobile
industry. This research document presents some in-depth analysis about the future of
the mobile industry. However, the author or the company assumes no liability
whatsoever.
This paper is part of the Mobile Future Forward Research Paper Series. For past papers
and books, please see http://www.mobilefutureforward.com
Any use or reprint of the material discussed in the paper without prior permission is
strictly prohibited.
2
Introduction | www.mobilefutureforward.com
Copyright 2015, All Rights Reserved. Use without permission is strictly prohibited.
Introduction
The deployment of LTE otherwise known as 4G is in full swing. Operators in US, Japan,
Korea, Finland, Australia, and others started deploying the new technology some years
ago and are nearing completion of their network build out. Others in Europe and Asia
are on an aggressive schedule to catch-up. We can expect that a majority of the
operators will have LTE up and running in the next couple of years. Operators have
sunsetted 2G. In some instances they even stopped investing in 3G and are putting all of
their investments in the 4G bucket. As mobile networks transition to all IP, operators
will be able to re-farm their spectrum assets for 4G deployments. Beyond LTE,
operators are looking at LTE-A to provide more efficiency and network bandwidth to
consumers.
In mature LTE markets like the US, Korea, and Japan, the talk has shifted to the next
generation technology evolution 5G. Even Europe, which still has a long way to go
before their 4G is built out have set their sights on 5G to recapture the mantle and the
pride of the GSM days. Korea and Japan led the world in 3G but lost the lead of 4G to
the US. They both are eager to be considered leaders in 5G. Japanese government has
set the ambitious goal of having 5G by the Tokyo Olympics in 2020. US regulators have
started to talk about 5G and the future spectrum needs as well.
Since the launch of 1G networks in late seventies and the eighties, we are now onto the
5th iteration of the network technology evolution. We have gone through a lot of
technology skirmishes1 but with 4G and likely with 5G, we are narrowing the differences
1
GSM vs. TDMA, CDMA vs. GSM, WCDMA vs. EV-DO, LTE vs. WiMax, etc.
between technology options giving significant technology scale advantages to the

ecosystem.
As network technologies have evolved, the application landscape has changed as well.
1G or AMPS was all about basic voice services. GSM and CDMA (2G) digitized mobile
and we saw basic messaging and data services introduced into the market. 3G (WCDMA,
EVDO) introduced the potential of data services to the ecosystem and the consumers.
The launch of iMode in Japan became the poster child of data services for much of the
3G evolution around the globe. Midway in the 3G growth, new players like Apple and
Google entered the ecosystem and laid the foundation of unprecedented data and
application growth. Business models and control points in the ecosystem changed
overnight. The insatiable data demand led to the acceleration of the 4G services in many
leading markets. For the first time, the network technology was data-led. We are clearly
moving towards an IP infrastructure where voice is just another app running on the data
network.
In fact, data is the primary revenue engine for the services providers and rest of the
ecosystem. In Japan, almost 80% of the revenue now comes from data services. In the
US, we are approaching 60%. Other nations are not far behind. Even the emerging
markets have caught up very fast and in some instances leap-frogging their western
counterparts in certain application and services segments.
All through last four generations, the fundamental business model of metering
remained the same. Barring some exceptions, there has been a direct correlation of
usage and revenues. Will 5G be any different?
Another significant standard that has evolved is Wi-Fi. The impact of Wi-Fi on the
mobile ecosystem cant be overstated. It has become so pervasive that we have ask the
question how long before nationwide Wi-Fi first networks start to make a run for the
wallet share in major markets. How will Wi-Fi fit in with 5G, will the two standards
merge?
Will 5G offer new business models or explore a different relationship between usage and
cost? Will consumers warm up to the idea of value-based pricing? Or Will access just
become a commodity layer like water and electricity and most of the value will reside in
the platform and application layers? Though we have started to see the shifts (as
discussed in detail in our 4th wave series of papers), how fast will future accelerate? Will
the ecosystem landscape be markedly different than what we have in place today?
We wont know the answer to some of these questions for a while but it is worth
exploring the lessons from the past and potential disruptions that 5G could bring to the
ecosystem that benefits the end customers. In the end, it might not be about the
technology at all but about the business models that shape the technology landscape.
This paper explores 5G through the lens of the past and explores the wireless world
beyond 2020.
4
Historical Evolution of Network Technology

Like most evolution cycles, they tend to have a few characteristics in common. For the
wireless network technology, the technology cycles typically last on an average of 20
years in any given country. Each generation brings its innovations and value
propositions that attracts new users and use-cases to the table. This helps in increasing
the net-revenue and broadens the ecosystem.
Figure 1. Mobile Network Technology Lifecycles (North America) 1G 5G2

On an average, the time-to-peak has been 12 years while the time from peak-to-sunset
has been 7 years. Obviously, there are shifts in different countries depending on
spectrum auctions; competitive dynamics, investment availability but they largely follow
the 20 year cycle. For each of these 20 year cycles, the R&D and standardization time
period of 7-8 years typically precedes the first major deployments of the network
technology. So overall, these are big cycles of 25-30 years from initial concepts to the
last subscription getting off the network technology.
In general, the time to peak (the point where the net revenues for the technology peak
and start dropping) is generally slower than the time from peak to sunset. This is
primarily because as the last generation is peaking, investments and roll-outs of the new
generation of technology starts thus taking away the share at a faster pace.
Source: Chetan Sharma Consulting, 2014
Historical Evolution of Network Technology | www.mobilefutureforward.com

If we look at the North American market over a period of 35 years, we observe that the
new generation brings in roughly three times the cumulative service revenue for the
industry. This happened from 1G to 2G and 2G to 3G. The 4G story is still evolving and
we are nowhere near completing the technology cycle but all indications are that the 4G
service revenue will be three times the 3G cycle revenue.
In fact, by some measures, we are behind the 5G curve but are likely to make up as there
are more companies in more countries focused on the competitive battles of ushering
the age of even faster broadband. The research work on 5G started in 20123 and has
started to kick into high-gear in 2014 as governments, organizations, and companies
started to set targets for launch. Japan is motivated to launch 5G by 2020 for Tokyo
Olympics.4 Huawei and MegaFon are teaming up to launch 5G by 2018 for the soccer
world cup.5 We are likely to see more announcements in 2015. ITU and regulators are
also getting organized to figure out the spectrum demands for 5G.6
Figure 2. North American Wireless Market Service Revenue by Generation

(1985 2020)7
http://www.metis2020.com
https://www.telegeography.com/products/commsupdate/articles/2014/08/19/mic-looks-to-commercialise-5gservices-by-2020-olympics/
5
http://www.mobileworldlive.com/huawei-russias-megafon-plan-5g-launch-2018-world-cup
6
http://recode.net/2014/10/27/the-race-to-5g-is-on/
7
4

The capital required to deploy a new network has consistently increased over the last
three decades. In the first 10 years, US operators spent roughly $24Billion collectively.
For the last 5 years, they have been exceeding that figure each year.8 As the number of
subscriptions grew, so did the demand on the network especially as smartphone
penetration started to increase at a good pace in 2007-8. The revenue/capex ratio has
also steadily increased until 2009. It has been on the decline ever since. Will 5G reduce
the deployment cost by a significant factor to have a steady revenue/capex ratio for the
operators? Margins on the data business have been under significant pressure as well
and have been declining in most markets for the past few years. Will 5G help stabilize
the margins?
As we have illustrated in our other papers,9 mobile is redefining the global GDP in more
ways than one. All leading companies realize that now. Governments know that in a
connected world, jobs and economic growth is at stake and the smarter and agile
regulators will do whatever they can to wrestle some of the edge that comes being a
leader.
Source: CTIA, Chetan Sharma Consulting, 2014

Connected Intelligence Era: The Golden Age of Mobile, 2014,
http://www.mobilefutureforward.com/Connected_Intelligence_Era_Chetan_Sharma_Consulting.pdf and Mobile
4th Wave: Evolution of the Next Trillion Dollars, 2013 http://chetansharma.com/4thwaveandthenexttrillion.htm
9

The current state of 5G

During the second half of 2014, the noise around what will 5G mean and who will
dominate started to rise beyond the research community. Europe hasnt done much
innovative work on a broad scale in mobile since the glory days of GSM which unified
Europe and set the standard for the world, the rewards of which we are still reaping
today. Japan started deploying 3G before anyone else and was envy of the world for
much of the last decade until iPhone and Android started to shape the ecosystem. Japan
completely missed the smartphone evolution and is still in catch-up mode. So, while
LTE came to Japan, the center of the mobile gravity had already moved to the US with
operators deploying LTE and software platforms becoming more important than any
other time in the history of the industry. At the end of 2014, US had over 50% of the
global LTE subscribers.10
This brings us to 2015. Europe and Japan are anxious to regain old glory. Korea has
always been keen on maintaining its top ICT player ranking.11 China which has had
some quixotic excursions to set its own standards has warmed up to the global
standards and is very keen on leaving its own stamp on 5G. Its two heavyweights
Huawei and ZTE will have a say in the standards (as would China Mobile). But it is the
up starts like Alibaba and Xiaomi who are more ambitious and aggressive in their
strategy. Will the collective inertia allow China to be a dominant 5G player?
Then of course, there is the US market clearly the current leader in almost every
dimension. Qualcomm sets the baseline for growth in mobile, a majority of LTE subs are
in the US, the mobile growth is led by the software renegades Google, Facebook,
Amazon, Microsoft, and Apple. There are transformative startups every couple of years
like Twitter, Airbnb, Uber, and others who are fundamentally changing industries. Will
US let this lead slip as we enter the next 20 years of the 5G cycle?
At this starting point, we just dont know what the global technology and economic
climate will be like in 5-10 years. However, a number of players, institutes, and
governments have started to lay the ground work for the next big network evolution
cycle. The distance between the emerging and developed markets continues to shrink
and nobody wants to be left behind.
Here is the list of some publicly announced 5G specific initiatives around the world:
5G Innovation Center, University of Surrey, UK12

5G Forum, Korea13
ARIB, Japan14
10
China will soon overtake US as its LTE deployments catch fire

http://www.itu.int/net/pressoffice/press_releases/2014/68.aspx
12
http://www.surrey.ac.uk/5gic
13
http://www.5gforum.org/eng/main/
14
http://www.arib.or.jp/english/
11
The current state of 5G | www.mobilefutureforward.com

5GPPP, EU15
METIS, EU16
5G Lab Germany17
NGMN18
ETSI19
4GAmericas20
Most of the US activities are confined to research institutes and corporate R&D
initiatives.
Governments and research institutes in Europe, Japan, and Korea are putting a lot of
emphasis on 5G as if the various countries are in the race to put man on the moon
being first and stay dominant in 5G is a critical policy goal for these countries. In the US,
the FCC has started the exploration of the allocation of frequencies for 5G.21
15
http://5g-ppp.eu/
https://www.metis2020.com/
17
http://5glab.de/
18
http://www.ngmn.org/ NGMNs 5G white paper https://www.ngmn.org/uploads/media/NGMN_5G_White_Paper_V1_0.pdf
19
http://www.etsi.org/
20
http://www.4gamericas.org
21
http://www.fcc.gov/article/doc-330009a2
16
The current state of 5G | www.mobilefutureforward.com

What will 5G look and feel like?

There is some emerging consensus around the broad strategic direction of 5G. In most
of the western markets, we are likely to have consumers consuming 200 400
GBs/month on mobile (including both cellular and Wi-Fi) by 2020. Some of the
potential 5G features will get incorporated in LTE-A+ which might be later termed as
4.5G22 or 4.75G essentially a precursor to the eventual launch of 5G. Unless the
governing bodies are clear in the performance criterion, it is almost a certainty that
operators will jump the gun and start calling some of the advanced LTE deployments
5G. Some vendors have already started to talk about 4.5G.23
Some of technology features being considered are:
Use of Millimeter Wave

Massive MIMO
Native support for IoT/M2M
Wi-Fi First Networks
Virtualized Network Functions and Software Defined Networking
Device and application-centric network architectures
o D2D (device to device)
o V2X (vehicle to everything)
o Broadcast networks
Privacy by design
Spectrum sharing and splicing
Seamless networking within licensed and unlicensed spectrum bands
Service creation time reduced by 99%
Some of the performance goals for 5G under discussion are:
Average - 300-500 Mbps and > 10 Gbps

< 1 ms latency
(Almost) 100% network coverage
1000 times reduction in power consumption
Very high reliability in all circumstances especially indoors (99.999%)
Deep indoor coverage (+20dB)
30x higher device density
10-100x connected devices
100x average data rate
Significantly higher security requirements
22
http://pr.huawei.com/en/news/hw-373886-4.5g.htm#.VIaGWTHF98E
http://www.samsung.com/uk/news/local/samsung-electronics-sets-5g-speed-record-at-7-5gbps-over-30-timesfaster-than-4g-lte
23
10
What will 5G look and feel like? | www.mobilefutureforward.com

A number of these requirements will be shaped by the standardization process and how
the industry builds the case for higher performance access networks that take into
account the diversity in applications, business cases, business models, end-points,
bandwidth and latency requirements, geographical differences in requirements. A
number of 5G scenarios will be accomplished by LTE-A and subsequent technology
features so a clear demarcation of where 4G ends and 5G begins will be a tricky
proposition.24
Another point that should be noted is that the Gbps speed in discussion is for GHz
frequency bands and for short distances. That means, we will have to build much denser
networks than we have today involving D2D, P2P, tighter integration of licensed and
unlicensed spectrum bands and as such new architectures and business models to carry
the bits.
It is also not entirely clear how the seamless handoff will take place between the
millimeter dense networks and lower frequency macro networks without any
performance degradation. There is also no consensus on the frequency bands that
should be allocated for 5G around the world. The harmonization process is a long
drawn-out convoluted process. Without narrowing the number of bands, the economies
of scale cant be reached to bolster the case for 5G.
Operators will have to justify the network investment based on the business case for 5G.
Clearly, the infrastructure costs per GB will decline by a significant factor as most of the
complexity management moves to software but it will still cost a fortune to acquire new
spectrum and deploy new technology across the various spectrum assets. The volume of
the traffic will keep growing and the margins per bit will keep declining. How will
operators make the case for more investment in these scenarios? Will 5G enable new
business models that were not possible before due to industry and technology structure?
There are more questions than there are answers but many of these questions will be
sorted out as the industry finds its way to define 5G.
There is also the question of how much bandwidth do we really need? Historically,
anything that is been offered up to the consumers gets gobbled up pretty past. The US
market is doing 2.2GB/sub/month as of 2014 with T-Mobile reporting at least double
the usage.25 Similarly, in Korea and Sweden, we have seen 7-10 GB/sub/month
consumption so it is not out of the realm of possibilities that we are looking at 20-30
GB/sub/month consumption rates in some of the markets by the turn of the decade and
this is just cellular data. Wi-Fi consumption will grow even faster.
But, can human eye discern speed after a certain point? Can we really tell the difference
on a smartphone between 30 Mbps and 70 Mbps when the data downloads pretty
rapidly and we might not notice the difference as the bandwidth availability increases.
24
We are almost certain that some vendors and operators will jump the gun and start calling an interim technology
5G
25
11

Will we consumer more HD or newer and higher resolutions of content that needs more
throughput? Hugh Bradlow, Chief Scientist of Telstra observed that the threshold at
which an average consumer is satisfied with the throughput is roughly proportional to
the square of the diagonal of the screen size. As devices and screen sizes changes, the
threshold adjusts upwards or downwards.26
One significant flaw in the standardization process is the lack of Internet and pure
digital players on the table. The standards are being designed the traditional ways by
vendors and by the operators. There is rich history and experience in traditional
ecosystem that we should leverage but we would be remiss if we dont involve the likes
of Facebook and Google in the standardization process for it is the applications that are
driving the networks and devices and not the other way around.
Applications such as autonomous driving, multi-user video conferencing, opera
livestreaming, multi-user gaming, telemedicine, distant learning, augmented reality,
and many other application and service scenarios will inevitably drive the need for
higher performance from the network. As the industry figures out its journey towards
5G, it might be the business models and the shifts in industry tension points that will
shape the next 15-20 years.
26
Source: Hugh Bradlow, Telstra
12

Shifts in Ecosystem Control Points

The first four generations have largely followed the same business model of metering.
The operator will typically invest in assets such spectrum, network build out,
operational capacity, etc. and then build the business based on the usage. In the early
days, it is more of a linear model with a tight correlation between the usage and cost of
the usage but as the market matured, the past revenue curves melded into the new ones.
Thats the reason voice and messaging are offered as unlimited package designed
around the data services.27,28
Figure 3. Lifetime Value share segmentation of a smartphone user 29

Many progressive operators like AT&T, NTT DoCoMo, KDDI, Verizon, Vodafone, and
Telefonica have been investing on the platform and the application layers and have
already built billion+ revenue streams.
27
For a more in-depth assessment of the revenue curves in the mobile industry and how they are shaping the
future of the industry, please see the 4th wave series papers http://www.chetansharma.com/4thwaveandthenexttrillion.htm
28
While there are unlimited bundles of data available, they are still controlled. Even the unlimited usage is
throttled after a certain level of data usage in some shape or form. Most of the operators have largely abandoned
the unlimited data wagon.
29
13
Shifts in Ecosystem Control Points | www.mobilefutureforward.com

If we look at the economic activity from a smartphone entering the ecosystem, the role
of applications and services is quite visible in both the developed and developing
markets. As shown in figure 4, the percentage of revenue flowing into new areas over the
lifetime of a smartphone is increasing. The areas of apps, commerce, advertising, and
cloud are adding very tangible revenue streams to the ecosystem.
Figure 4. Revenue share across different mobile technology generations30

The second most important question for the industry will be around the control points
and aggregation nodes. From 1G to 3G, the industry clearly rotated around the
operators. Almost all of the revenue in the industry flowed through the operators and
they controlled in excess of 75% of the industry revenue. However, primarily because of
the broadband capability of the networks, the emergence of powerful computing
platforms in iOS and Android, and very powerful computing devices, the picture in the
4G era is changing. We estimate that the overall control of the industry revenues by the
operators will shrink to 50% or lower. This doesnt mean that the operator revenues will
decline in aggregate, they will continue to increase 1-3% globally but the ecosystem is
growing much faster and as such the operator share will decline.
With 5G, it is very likely, that a highly distributed application and services ecosystem
will become the dominant industry source of revenue around which rest of the mobile
solar system will evolve. The tectonic shifts are likely to result in fewer mobile operators
in the 5G technology era. Most of the countries will have 2 or 3 major operators. Given
that so much mobile traffic is indoor, we will see the wireline and wireless operators
30
14

merge at a frantic pace in the next 5 years. Many will also become content owners,
banks, and might even operate car companies. On the flip side, we might see the rise of
non-traditional MVNOs wherein vertical industry players will bundle in IP access with
their services.
15

Wireline and Wireless are becoming the same network

Despite Wi-Fis overwhelming share of the mobile traffic, the cellular traffic is growing
50-100% in most markets. There will continue to be a tremendous appetite for more
cellular data but it is also clear that wireline will carry bulk of the mobile data traffic via
Wi-Fi. In 2014, in the US, Wi-Fi traffic was 3 times the cellular traffic and fixed data
consumption was 10 times the mobile data traffic (figure 5).
Figure 5. Relative data consumption for different access technologies (US)31

When Wi-Fi broke onto the wireless scene in the 90s, it was considered a niche
technology. Overtime, its role in the mobile ecosystem has risen to a significant one.
Operators went from hating to loving Wi-Fi. More recently, we have seen tighter
integration of Wi-Fi with cellular with integrated base stations, Wi-Fi calling, seamless
handoff, etc. Additionally, 70-80% of the mobile data consumption is taking place
indoors which poses the question not if but when a national service can be launched that
is Wi-Fi first and uses cellular as a complimentary network for outdoor needs. Different
flavors of this strategy are being tried out but they are all niche activities that dont
change the traditional business. We could see such Wi-Fi first initiatives enter the
market even before 5G becomes a reality. This could happen both in small and emerging
markets as well as big mature markets. The significant price delta such networks can
offer has a potential to dramatically alter the operator landscape but these Wi-Fi
networks have to be nationwide or at least cover the major metros to have a significant
impact on the market.
31
16
Wireline and Wireless are becoming the same network | www.mobilefutureforward.com

It is well established that video will constitute bulk of data traffic both on wireline and
wireless from here on. From a consumer point of view, the access technology will just
disappear in the background. They will care less what access medium is carrying the bits
of any particular content or traffic. There will be enough intelligence built into the
network framework that economics and performance requirements more than anything
else will dictate how bits are carried from point A to point B. This is the reason that it
will make more sense to merge the wireline and wireless assets in a given country. An
operator with assets in both categories will be better able to bundle services and content.
Figure 6. Broadband penetration and traffic for wireline and wireless

(US)32
In essence, wireline and wireless are not at war with each other. Rather the two are
merging to become a single IP transport layer for applications and services. Of course,
there are going to exceptions to this in countries where the wireline infrastructure is
going to be poor and it makes little sense in investing fresh capital into wireline when it
can be deployed in wireless with better ROI. For example, the wireline penetration in
Bhutan is less than 5% but the wireless penetration is over 75%. While it makes financial
sense to wire the population centers like Thimpu and Paro, it is better to connect the
200+ villages with wireless. Similarly, in many countries in Africa and Latin America, it
is prudent to have a wireless first strategy for improving the nations digital
infrastructure.
32
17
Wireline and Wireless are becoming the same network | www.mobilefutureforward.com

Winners and Losers

When the industry started back in the eighties, there were on an average 2-3x operators
in each country compared to today. In 1999, US had 10 operators and have now reduced
to 4 major operators. Through the sheer force of the market dynamics, most of the
markets have whittled down to 3 major operators.33 5G is likely to distribute (and
cement) operators role into utility, enablers, or digital lifestyle solution providers
segments.34
On the infrastructure side of the house, there were 14-15 vendors globally in the eighties
and nineties. We have now reduced down to 5-6 and there is likely to be further
consolidation in the near future. With much of 5G intelligence and operations moving to
software, the capex required to deploy 5G could shrink dramatically making the
tradition infrastructure product strategy incompatible with the new world. In fact,
infrastructure providers will be primarily software players who use commodity
hardware to the task at a fraction of the current cost. In 1990s, a macro base station
used to cost $125K in the western markets. By the time 4G came around, this number
dropped down to only $2.5K. We are likely looking at the 5G world, where the endpoints are sub-$100 with some centralized capability that helps load-balance the
intelligence and capabilities at various nodes. The infrastructure segment will also be
shaped by any compromises on the geopolitical front especially between China and the
US.
The handset space has seen its own share of turmoil. The decay of the incumbents
started with the 3G cycle and was mostly complete as the industry matured into the 4G
cycle. The powerhouses and decades old brands just vanished in a matter of a few years.
Nokia, Motorola, Blackberry, Sony are barely a carcass of their former self. Instead new
players have emerged like Apple, and Samsung. Even the mighty Samsung is facing
tough competitive pressure from the top and bottom.35
The low cost OEMs like Huawei and ZTE have moved up stream only to be replaced by
Xiaomi, Micromax, and Fly. The ASP will drop down to a point that only a few players
who can manage to operate at razor thin margins or have business models that shield
the shrinking margins. Apple is an exception to the trend because of its highly
verticalized and inimitable approach to the market. Will 5G change Apple? It is likely
Apple (and others) will change 5G rather than the other way around. Will Android
survive OEM commoditization? Will successful companies built on the iOS and Android
platforms such as Facebook, Uber, Twitter, Amazon, and others continue to derive value
from these aggregated nodes in the ecosystem?
33
http://chetansharma.com/mobilecompetition.htm
For more discussion, please refer the Fourth Wave Series papers available at
http://www.chetansharma.com/4thwaveandthenexttrillion.htm
35
http://chetansharma.com/usmarketupdateq32014.htm
34
18
Winners and Losers | www.mobilefutureforward.com

Computing itself has changed over the life of the wireless industry. From the early days
of the mainframe, 1G-to-early 3G coincided with the sheer dominance of the windows
platform. With iOS and Android capturing much of the computing ecosystem, Windows
is left to fight for relevance.
Figure 7. The evolution of the computing landscape

The single most important factor of all these trends is that wireless has become a
software and platform business and unless one has scale to attract and build a viable
ecosystem, any leverage and competitive advantage can disappear overnight.
5G will also be unique as the aggregate non-Phone devices will dominate phones for the
first time globally. We will have to figure out architectures, business models, and
policies to deal with the consumer demand and expectations. 5G will not only reshape
the wireless industry but industries around it, pretty much every vertical of
significance.36
The component suppliers will be do well in the ecosystem as the number of devices per
household will continue to increase and despite the turmoil in the OEM space, the
suppliers will do better as the competition is less compared to other layers of the
ecosystem. However, they will have to also fight the commoditization trend.
It is quite likely that 5G will follow the same tradition and new players will be born that
attach the ecosystem stack in new and innovative ways. The value is already shifting
from access to the platform and from the platform to the applications. In fact, in most
instances, the application layer will capture greater than 50% of the value. In some
instances, applications will command in excess of 90% of the ecosystem stack value.
36
For more discussion on this, please see Connected Intelligence Era paper at
http://www.chetansharma.com/connectedintelligenceera.htm
19

As is true with any technology cycle, there will be new and nimble players ready to take
wallet share away from the incumbents. 5G will see an explosion of applications and
services companies who seek to digitize and automate the task economy to the most
granular level.
20

Conclusions
The noise around 5G will only grow louder in 2015 but it is normal. All mobile network
technology evolutions have gone through the same cycle in the last 35 years and 5G will
be no different. However, the ecosystem and the control points in 2025 are likely to look
markedly different from the first three cycles. The brilliant engineering community will
no doubt respond with performance capabilities that will make 4G look like analog days.
As the industry is embarking on its 5G cycle, mobile itself might disappear from the
lexicon of the industry for it will be so pervasive, so embedded in everything we do that
it will become part of our digital consciousness. The connected intelligence era37 is
clearly upon us and 5G will play an important role in defining it.
Mobile will continue to transform every industry with thousands new startups changing
and contributing in their own ways. Tighten your seat belts and enjoy the ride. It will be
like no other in the history of mankind.
37
http://www.chetansharma.com/connectedintelligenceera.htm
21
Conclusions | www.mobilefutureforward.com
Acknowledgements
Author would like to acknowledge the assistance of Wim Sweldens, Hugh Bradlow, and
Sarla Sharma for providing their feedback.
About Mobile Future Forward

Mobile Future Forward is mobile industrys premier thought-leadership summit
that attracts some of the most influential minds in the mobile industry who are very
instrumental in shaping the industry, in innovation adoption, and in managing the
growth of revenues and profits. For the 2015 summit, the experts and visionaries from
around the globe will gather in Seattle on September 29th to explore the mobile industry
3-5 years forward, envision what the user experiences and use cases look like, discuss
and debate the challenges and opportunities in the journey to that vision. The focus will
be on understanding the opportunities and the challenges of the next technology wave.
More information at www.mobilefutureforward.com
22
Acknowledgements | www.mobilefutureforward.com
Mobile Future Forward Publishing

Mobile Future Forward Community produces some of the most thought-provoking
mobile industry papers and books.
Papers
Each year, Chetan Sharma Consulting researches and produces industry-defining papers that look at new
opportunities, industry challenges, and the shifts in consumer behavior.
Books
Mobile Future Forward publishes the book series that consists of essays from speakers and thoughtleaders in the mobile industry. The Mobile Future Forward Summit is all about creating new ideas,
discussion and debate of opportunities and challenges. The essays from CEOs and senior industry
executives are focused on new technologies, trends, and business twists and turns of the industry.
More information at www.mobilefutureforward.com
23
Mobile Future Forward Publishing | www.mobilefutureforward.com

About Chetan Sharma Consulting

Chetan Sharma Consulting is one of the most respected management consulting and
strategic advisory firms in the mobile industry. We are focused on evolving trends,
emerging challenges and opportunities, new business models and technology advances
that will take our mobile communications industry to the next level. Our expertise is in
developing innovation-driven product and IP strategy. Our clients range from small
startups with disruptive ideas to multinational conglomerates looking for an edge. We
help major brands formulate winning, profitable, and sustainable strategies.
Please visit us at www.chetansharma.com.
About the Author

Chetan Sharma is President of Chetan Sharma Consulting and is one of the leading strategists in
the mobile industry. Executives from wireless companies around the world seek his accurate
predictions, independent insights, and actionable recommendations. He has served as an
advisor to senior executive management of several Fortune 100 companies in the wireless space
and is probably the only industry strategist who has advised each of the top 6 global mobile data
operators. Chetan serves on the advisory boards of Ericsson, Telefonica, Kymeta and a number
of other startups. Some of his clients include NTT DoCoMo, Disney, KTF, China Mobile, Toyota,
Comcast, Motorola, FedEx, Sony, Samsung, Alcatel Lucent, KDDI, Virgin Mobile, Sprint Nextel,
Skype, AT&T Wireless, Reuters, Juniper, Qualcomm, Microsoft, Reliance Infocomm, SAP,
Merrill Lynch, American Express, and Hewlett-Packard.
Chetan is the author or co-author of a dozen best-selling books on wireless including Mobile
Advertising: Supercharge your brand in the exploding wireless market and Wireless
Broadband: Conflict and Convergence. He is also the editor of the Mobile Future Forward
Book Series. His books have been adopted in several corporate training programs and university
courses at NYU, Stanford, and Tokyo University. His research work is widely quoted in the
industry. Chetan is interviewed frequently by leading international media publications such as
Time magazine, New York Times, Wall Street Journal, Business Week, Japan Media Review,
Mobile Communications International, and TechCrunch, and has appeared on NPR, WBBN,
and CNBC as a wireless data technology expert. He is also the chief curator of the mobile
thought leadership executive forums Mobile Future Forward and Mobile Breakfast Series.
Chetan is an advisor to CEOs and CTOs of some of the leading wireless technology companies on
product strategy and Intellectual Property (IP) development, and serves on the advisory boards
of several companies. He is also a sought after IP strategist and expert witness in the wireless
industry and has worked on and testified in some of the most landmark cases in the industry
such as Qualcomm vs. Broadcom, Samsung vs. Ericsson, Sprint vs. Verizon, Openwave vs. 724
Solutions, and Upaid vs. Satyam. Chetan is a senior member of IEEE, IEEE Communications
Society, and IEEE Computers Society. He has Master of Science degree in Electrical Engineering
from Kansas State University and Bachelor of Science degree from the Indian Institute of
Technology, Roorkee.
24
About Chetan Sharma Consulting | www.mobilefutureforward.com


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2015

between technology options giving significant technology scale advantages to the

Historical Evolution of Network Technology

Figure 1. Mobile Network Technology Lifecycles (North America) 1G 5G2

Source: Chetan Sharma Consulting, 2014

Historical Evolution of Network Technology | www.mobilefutureforward.com

Figure 2. North American Wireless Market Service Revenue by Generation

Historical Evolution of Network Technology | www.mobilefutureforward.com

Source: CTIA, Chetan Sharma Consulting, 2014

Historical Evolution of Network Technology | www.mobilefutureforward.com

The current state of 5G

5G Innovation Center, University of Surrey, UK12

China will soon overtake US as its LTE deployments catch fire

The current state of 5G | www.mobilefutureforward.com

The current state of 5G | www.mobilefutureforward.com

What will 5G look and feel like?

Use of Millimeter Wave

Some of the performance goals for 5G under discussion are:

Average - 300-500 Mbps and > 10 Gbps

What will 5G look and feel like? | www.mobilefutureforward.com

What will 5G look and feel like? | www.mobilefutureforward.com

Source: Hugh Bradlow, Telstra

What will 5G look and feel like? | www.mobilefutureforward.com

Shifts in Ecosystem Control Points

Figure 3. Lifetime Value share segmentation of a smartphone user 29

Shifts in Ecosystem Control Points | www.mobilefutureforward.com

Figure 4. Revenue share across different mobile technology generations30

Source: Chetan Sharma Consulting, 2014

Shifts in Ecosystem Control Points | www.mobilefutureforward.com

Shifts in Ecosystem Control Points | www.mobilefutureforward.com

Wireline and Wireless are becoming the same network

Figure 5. Relative data consumption for different access technologies (US)31

Source: Chetan Sharma Consulting, 2014

Wireline and Wireless are becoming the same network | www.mobilefutureforward.com

Figure 6. Broadband penetration and traffic for wireline and wireless

Source: Chetan Sharma Consulting, 2014

Wireline and Wireless are becoming the same network | www.mobilefutureforward.com

Winners and Losers

Winners and Losers | www.mobilefutureforward.com

Figure 7. The evolution of the computing landscape

Winners and Losers | www.mobilefutureforward.com

Winners and Losers | www.mobilefutureforward.com

About Mobile Future Forward

Mobile Future Forward Publishing

More information at www.mobilefutureforward.com

Mobile Future Forward Publishing | www.mobilefutureforward.com

About Chetan Sharma Consulting

About the Author

About Chetan Sharma Consulting | www.mobilefutureforward.com

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