back to article BT boss: Yeah, making a business case for 5G is hard

Chief exec of BT, Gavin Patterson, has admitted the British telco is struggling to make a business case for 5G investment, given the huge costs of getting the network off the ground. Speaking at the Huawei Global Mobile Broadband Forum in London, Patterson said: “I talk to other CEOs around the world... and we’ve all been …

  1. peterm3
    Headmaster

    Carrier?

    "Some sceptics have said that 5G is overhyped, and its uptake has been driven by carriers keen to flog more kit. "

    What does carrier mean in this sentence? I though carrier was American for Mobile Network Operator e.g Verizon, here ee?

    Do you mean telecoms equipment manufacturer, like Huawei?

    1. Major N

      Re: Carrier?

      I think a little of both - network vendors selling basestation kit and backhaul, consumer OEMs and networks using the jump in G-number as a way of propping up falling numbers of handsets and contracts being sold, as iteration means less and less difference between phones, and people hold onto their devices for longer and switch from expensive subsidized contracts to sim-only....

  2. Anonymous Coward
    Anonymous Coward

    queer

    how can we rinse out more cash from 4G? Just tell people 5G is hyped and you don't need it.

    this is why the state should run the agenda not public listed companies in hock to quarterly figures to the city.

    1. CJatCTi

      Re: queer

      You want your taxes wasted get the govemment doing it.

      5G is sexy & you don't want the UK left behind do you minister?

      Here sign here & show the UK is open for business.

      vs

      BT having to justify to it's share holders why they spent billions on a technology that wasn't needed rather than giving them lots of dividend.

      I don't know about getting 4G everywhere, I would be happy with 100% 3G coverage on any one network rather than having to have a dual SIM phone EE + Vodafone to hope for coverage

      1. katrinab Silver badge

        Re: queer

        One of the benefits of 4G over 3G is that you do get better coverage for the same number of base stations.

        I have a perfect 3G signal at home, and it is the same speed as my ADSL. Both are connected to the same street cabinet, and the mast is about 15 meters away from my bedroom window.

        1. Anonymous Coward
          Anonymous Coward

          Re: queer

          Neither ADSL or mobile masts are fed from street cabinets. ADSL kit is all based in telephone exchanges and the mobile network doesn’t run on broadband.

          1. Duncan Macdonald

            Re: queer - WRONG

            ADSL is often run from street cabinets where the distance (and/or cable quality) make running ADSL from exchanges impractical (FTTC - fibre to the cabinet with ADSL for the last hop is not uncommon).

            Depending on local conditions, connecting a mobile network mast by a fibre link in a nearby cabinet may be the most economic method. (As BT owns a lot of cabinets with fibre connections and also has a lot of mobile network masts, I would be surprised if they do not use this method on occasion.)

            1. Anonymous Coward
              Anonymous Coward

              Re: queer - WRONG

              I work on this stuff daily, I have never come across an ADSL connection to a Fibre cab, its always VDSL2+ (so called Superfast) and any attempt to connect an ADSL connection will always fail.

        2. The Nazz

          Re: queer

          Gas, electric or water meters? Smart or dumb?

  3. Martin Summers

    Forget 5G,right now it's just not needed. Spend the money on pure fibre to the premises networks and getting mobile coverage sorted. The industry is forever racing ahead of itself creating solutions for problems we don't have and neglecting the ones we do.

    1. Anonymous Coward
      Anonymous Coward

      This. * 10

      The Carriers and HW manufacturers have been getting all excited about 5G but forgetting two things:

      Backhaul is expensive and sites in which to place base stations equally expensive and rare.

      Solution: Crowd source both, using consumers!

      What's that? FTTH covers just 3% of the population(1)? Oh. Bugger.

      1: https://labs.thinkbroadband.com/local/uk

    2. Anonymous Coward
      Anonymous Coward

      1) Everyone said 3G was not needed and no-one could think of a use for it. The best use they came up with was video calling (a long time before facetime), which is what 3g phones were first sold with that as a USP.

      2)How about turn it around - forget FTTH, invest in 5G and great coverage with reasonable data plans and then you can run all homes off 5G wirelessly rather than needing individual wired connections and you can get the same speeds wherever you are in the country.

      There will be complaints about contention or over subscription but capacity can be managed and increased as needed (as long as a major incident doesn't happen in your sleepy village and the world's press descends on you).

      Heck, even share networks between the big providers so that they can work together to fill the country. The one who puts the mast in makes money in rent from the others. Before you know it the networks would be rushing to get their mast in first so they can get the rent.

      1. Anonymous Coward
        Anonymous Coward

        "2)How about turn it around - forget FTTH, invest in 5G and great coverage with reasonable data plans and then you can run all homes off 5G wirelessly rather than needing individual wired connections and you can get the same speeds wherever you are in the country."

        Why would I go from a rock solid wireline service *with no data cap* to a wishy washy wireless service with variable speeds/latency and caps?

        For 5G to live up to the hype and perform adequately as a wireless local loop with plenty of capacity, you need a lot of small cells - e.g. on lampposts or telegraph poles. The best way to backhaul those small cells is fibre. So you put up the cells and get the fibre into the ground.

        Congratulations, you've built fibre almost to the home and added tons of additional complexity for no real reason. Why not just do FTTH instead?

        BT aren't wrong about this one - 5G has a rather tenuous business case (going from IoT devices which need little bandwidth all the way to gigabits to individual handsets - why?). Far better to keep improving 4G coverage while the case for 5G builds (or falls flat).

        Between this and their desire to finally get on the FTTP bandwagon, I'm actually rather impressed

    3. Dave K

      Also this. Both 3G and 4G suffer from patchy coverage and slow speeds in busy areas. Instead of faster, faster, faster from a theoretical perspective, I'd much more settle for 3G or (ideally) 4G coverage that covers more rural areas and can cope with demand in cities better.

    4. Blotto Silver badge

      @martin,

      Forget 5G,right now it's just not needed. Spend the money on pure fibre to the premises networks and getting mobile coverage sorted. The industry is forever racing ahead of itself creating solutions for problems we don't have and neglecting the ones we do.

      so you want pure fibre everywhere so people can stick their own wireless kit on it?

      i really don't understand why some people are so fixated with 1 access medium of a technology they don't understand, to then install a cheap as chips wireless router on it to achieve speeds slower than the access technology can provide.

  4. Anonymous Coward
    Anonymous Coward

    OMG so obvious

    Have you ever seen such a blatant play for Government cash to drive forward their monopoly position, while the Gov declaration to put 5G top of the agenda is still ringing in our ears? Other telcos will have to dig into their own pockets to compete, where's there a free market when you really need one?

    The really scary thing is, they know they will get away with it and don't give a **** who knows it too. Where's there a just and open society when you really need one?

    1. FIA Silver badge

      Re: OMG so obvious

      Have you ever seen such a blatant play for Government cash to drive forward their monopoly position,

      In what way is EE a monopoly?

      while the Gov declaration to put 5G top of the agenda is still ringing in our ears? Other telcos will have to dig into their own pockets to compete, where's there a free market when you really need one?

      Did you read a different story? BT says 'Lets get the money back we've invested in 4G before worrying about 5G as the benefits are currently very few'. What's wrong with that? Would you prefer money (be it tax or revenue from subscribers) is wasted... to what end? I can only speak for myself but currently the 4G I get in my garden is faster than the wired internet I get in my house. I'd prefer BT spend their money fixing that issue before making my text messages arrive 2ms quicker.

      The really scary thing is, they know they will get away with it and don't give a **** who knows it too. Where's there a just and open society when you really need one?

      Who will? Get away with what??!? Are you annoyed you're not getting 5G or that your tax revenue isn't being spent on 5G?? What is it?

  5. Anonymous Coward
    Anonymous Coward

    re: Internet of Things takes off that new revenue streams are identified

    Two points on that.

    1) Not in this house it won't (IoT and all that cat poo)

    2) revenue streams - until we work out how to double or triple your cost per bit of data that we carry.

    2) above Is not confined to BT by any means. All carriers want to be able to charge you more per bit especially VM who are seemingly going out of their way to upsell the family next door to me.

    Yours,

    Grumpy Old man who does not want IoT in its current form anywhere near his home.

  6. JimboSmith Silver badge

    I have some sympathy with Three who watched BT get hold of EE and therefore create a massive market share. They were then told that they couldn't own O2 and gain a more competitive market share. I too don't understand the rush to 5G because I can't see the possible benefits to be gained at this time. I've never streamed a movie or music on my phone and I've never used anything that required any faster speeds than 4G (or possibly even 3G).

    Yes if IOT ends up being popular and everything (except in my house) is connected by the mobile network then it might be needed. However I thought IOT stuff was supposed to be using WiFi more than mobile networks. Just don't see the case for 5G at the moment especially as I've seen people still using 2G phones recently.

  7. Roland6 Silver badge

    Interesting admission by BT...

    So here we have a carrier who having conducted hands-on end-to-end testing of a 5G network, are still unable to identify a use for 5G that has any commercial value...

    It is clear the only reason the carriers want the spectrum auction to go ahead, isn't to enable them to roll out 5G but to provide more spectrum for 3 & 4G services. In this context it is hard to understand Ofcom's complaint, as until the carriers can identify a use and make business cases the new spectrum will be undervalued and thus Ofcom won't make as much from an auction....

  8. Hans Neeson-Bumpsadese Silver badge

    5G versus better existing services

    I don't like the idea of networks investing in 5G until they've got better coverage for other Gs.

    Like an earlier commenter said, I've never really found myself in a situation where I've been using 4G and really had a compelling argument that I should be able to get faster data rates.

    Coverage for 4G is definitely getting better - even in fairly rural areas. However, I've recently returned from a few days in central Scotland and there were times when I was in reasonably-sized population centres and struggled to get even GPRS - more web page requests timed out than actually completed...and forget about trying to upload anything anywhere.

    If the networks have money to invest, they should be improving availability of existing technologies. Finish one job before embarking on another.

    1. Baldrickk

      Re: 5G versus better existing services

      Like an earlier commenter said, I've never really found myself in a situation where I've been using 4G and really had a compelling argument that I should be able to get faster data rates.

      Same here. 4G speeds are plenty sufficient, and there have been times I've accidentally left my WiFi off (oops) and ended up streaming 1080p content without a hiccup. There is simply no consumer need to move on from 4G yet, but there is for filling in 4G notspots.

      As I understand it, the biggest benefit of 5G would be to support more customers in a given location. If they can't find "we need to be able to support all of our customers" as a business case, it's clear that doing it with 4G isn't currently a problem...

    2. anthonyhegedus Silver badge

      Re: 5G versus better existing services

      We don't need 2G and 3G - finish building out the 4G and start with 5G. It's impressive how 4G has built out in my area (Essex). For 10 years, there have been 3G 'not-spots' and then within a couple of years, 4G is available in far more places than 3G ever was. This could be because of the lower frequencies that 4G can use, as well as improvements in the technology used. Why not just get rid of the 2G networks, gradually phase out the 3G and reuse frequencies where possible?

      1. Hans Neeson-Bumpsadese Silver badge

        Re: 5G versus better existing services

        4G is available in far more places than 3G ever was

        That's because 4G needs to be available for the nationwide Emergency Services Network, and is being rolled out now.

      2. This post has been deleted by its author

      3. JimboSmith Silver badge

        Re: 5G versus better existing services

        We don't need 2G and 3G - finish building out the 4G and start with 5G.

        What are you going to do with the thousands possibly millions of people who have a 2G only or 3G (maximum) phones and don't want or can't afford to upgrade to 4G? What about the people who don't use 4G on their phone because it drains the battery too quickly? I know people who have only just got a 3G phone and only use it for SMS and calls. They don't need the ultra-fast internet or streaming etc.

        1. anthonyhegedus Silver badge

          Re: 5G versus better existing services

          4G doesn't seem to drain any battery I've ever used on a phone which has 4G any quicker than 3G or 2G. We can phase out 3G slowly, the tech is now 20 years old. Time to go. And as for 2G, anybody still using a 2G phone really ought to get it replaced. It's called progress and unfortunately it costs money. Nobody is saying buy a smart phone, just a phone that works with current standards. TVs cost more than basic phones and nobody had a problem when we abandoned analogue.

  9. Tom 7 Silver badge

    If they dont buy it up

    can they leave it open to the public. I'm sure we could make a useful alternative to ADSL and FTTP without all those accountants and advisers expecting a cut from inventing a business case.

  10. Horridbloke

    Ah yes, BT...

    ... the company that fifteen years ago didn't want to install half-megabit ADSL in many towns and villages because they couldn't see the point. Go to heck.

    1. Anonymous Coward
      Anonymous Coward

      Re: Ah yes, BT...

      The company that wanted to fibre up the UK until Maggie said go to heck...

  11. The Nazz

    Speaking of wasted tax ...

    Did anything good come of the £22bn that the Govt, the Rt Hon Gordon Brown (cough) etc took in an earlier (late 90's)? round of spectrum auctions?

    Maybe some was used to knowingly push deisel as a cleaner and less harmful fuel despite being fully aware otherwise.

    Maybe if speeds were lower, web pages took five seconds to load, then parents would have time to look both ways before launching themselves and their buggified infants into a busy road.

  12. Mike Tyler

    Perhaps it's this

    Perhaps if 5G is rolled out and the data is cheap enough, we can finally get rid of the wired connection, now that would upset BT. The question is can data be supplied at a price that will match the price of wired + line rental.

    Probably not, but no local loop monopoly would be really bad for BT, Openreach etc..

    1. Commswonk

      Re: Perhaps it's this

      Perhaps if 5G is rolled out and the data is cheap enough, we can finally get rid of the wired connection, now that would upset BT. The question is can data be supplied at a price that will match the price of wired + line rental.

      How cheap is "cheap enough"? Don't forget that as things stand the "user demand" can be split between radio and line based systems; get rid of line and the radio system has to be upscaled to meet all the demand. In simple terms that means an expanded radio system, as in every site having to be uprated in order to cope with the traffic. In this case "uprating" means more hardware (including backhaul) and even more spectrum; for what exactly? Just to poke BT in its corporate eye? The cost to users will always be set by what the market will tolerate, and by removing line transmission from the equation you enable the radio system operators to charge more, not less, because you have removed one layer of competition for reasons of "spite" more than anything else.

      By getting rid of wired connections you also force business users to piss about using radio connections for business purposes, and frankly that is stupid.

      My apparent "support" for BT is not because I inherently support BT (the buggers are about to force my monthly costs up) but because when trying to solve a problem (real or perceived) it is preferable to find a solution, not introduce an even bigger problem.

  13. Anonymous Coward
    Anonymous Coward

    Sort 4G out first...

    I agree with him around the business case...

    - The 4G networks (especially EE) need to be sorted out. Hate being stuck somewhere on 1 bar or when it says there is data (but really there isn't).

    - No-one is going to suddenly change their 4G based iPhone 8/X or Samsungs anytime soon.

    - ADSL and FTTC are poor in some places.

    - FTTP is a unicorn.

    The above things need fixing before starting a whole new 5G spectrum.

  14. MJI Silver badge

    So what is being kicked off?

    So they can have 5G

    Terrestrial TV lost some to 4G

  15. Mike Scott 1

    I live in an area of Scotland riddled with not spots for all the providers. This could be resolved virtually overnight by switching on automatic network roaming - Just as visitors from overseas experience. Too complicated, a disincentive to network rollout, unfair cry the telcos... Stuff them - They have had plenty time to complete the rollout of 3G (still don't get it at home) and 4G (still get one bar at work half a mile from a major airport, elsewhere a dream).

    Complete a decent level of service on 3 and 4G before starting 5. Because the first place 5G will start is the best 4G areas.

  16. Jason Hindle

    A fully national 5G network might be hard to justify

    But a less ambitious network that covers city centres, and other areas of high density usage, might work out better for the networks in terms of investment and return.

  17. Anonymous Coward
    Anonymous Coward

    5G is not needed for mobile

    Where it will see uptake is for fixed broadband to homes. Why spend tons of money stringing fiber in rural areas with low density, when you can site towers along existing fiber and serve many of those rural homes? It would be a lot chaeper to go back and backhill the areas the first set of towers (i.e. mostly where existing cell towers were) don't reach than it is to run fiber or even DSL grade copper to them.

    5G will benefit the people who don't have decent internet speed now because they have to get by on satellite or worse. I'm sure Samsung will make a big deal out of supporting 5G in the Note 10 in 2019 or whatever, but it won't make any difference in the real world. Heck, already "gigabit LTE" is hyped to death but provides zero real benefit over 600 Mbps LTE at half the speed.

  18. Anonymous Coward
    Anonymous Coward

    Who doesn’t want 5G?

    Truly fast, broad coverage internet to any device with the capacity to connect everything.

    You’re living in the 90s if you think that is a shit idea that should be held up by dividends to BT investors.

    1. Nick Ryan Silver badge

      Re: Who doesn’t want 5G?

      You seriously believe that 5G can deliver anything comparable to line speeds? Radio bandwidth is divided between the connected devices and the more connected devices there are the more bandwidth is used on the management of this bandwidth. So one device is OK, two devices is less than half speed, three devices is less than one third, and so on. This is before you get crossover radio locations and other interference sources which also greatly reduce usable bandwidth.

      This is before you hit the next problem, the speeds are very asynchronous in that while the high power transmitter can afford to up the power budget for a better data rate, your mobile device can't match this in any way and therefore even with 5G the device upload speeds are not great even if the maximum download speeds are fairly good. Quite contrary to nonsense sales pitches such as video calling - there's a reason these tend to only support WiFi.

      Not that the tech isn't clever, but while there is convenience to radio communications there are a lot of practical issues as well.

    2. Anonymous Coward
      Anonymous Coward

      Re: Who doesn’t want 5G?

      I suspect in several years time, if this becomes reality, people will be moaning about 5G data capacity and coverage. Whilst having a 5G network available all over the country which just works no matter what, is a lovely utopian idea, it doesn’t make financial sense. Having masses of equipment sitting around, doing nothing or very little most of the time other than ageing, providing capacity for this idea isn’t going to happen.

      I know very little about mobile networks, but I suspect if backhauls to 4G masts were improved, and the number of masts increased there would be little to no use for 5G, other than using its spectrum to provide for dense, inner city areas.

      Besides, I thought 4G could sustain 1gbps whilst stationary.....if this is ever achieved, I’ll use my monthly data allowance in 1 second!

  19. Anonymous Coward
    Anonymous Coward

    Just trying to work this out

    2G was Games and Girlies

    3G was Games, Girlies and Gambling

    4G was Games, Girlies, Gambling and Goals

    so remind me again, what does the 5th G stand for?

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