Findings from PwC's latest 5G Index show that fewer than 1% of mobile devices currently in use are 5G enabled.
The deployment of 5G networks has made a ton of news over the past few months as deployment in the US continues to roll out. But findings in PwC's latest biannual US 5G Index show that the real world applications and uses for the average person have been slow to keep up.
Looking forward for the next six months, PwC predicts that 60% of the US will have 5G coverage, but less than 2% of devices will be 5G enabled. Right now, fewer than 1% of mobile devices currently in use are 5G enabled. Despite the discrepancy, PwC Principal Dan Hays said by the end of year, more mainstream 5G-capable devices will be available for purchase.
"We've been tracking the progress on 5G since the initial networks were launched in the US about a year ago and we have seen the coverage for 5G grow significantly over the past six months. It's gone from a very small fraction of the US having 5G coverage to today, where roughly half of the country is covered with at least one 5G signal," Hays said.
"Even as the coverage has advanced, there are still relatively few devices that are capable of connecting to these more advanced networks and the sales of those devices are still very weak. Even though we have half the country where 5G is available, less than 1% of end-user devices are really capable of taking advantage of the 5G signal."
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The index says most of the benefits of 5G will be seen at first by enterprises, particularly those leveraging networks of IoT devices. According to PwC, the expansion of 5G will bring record speeds, robust capacity and the ability to "catalyze new service offerings, transform customer experiences and enhance enterprise operations."
But consumers have been slow to warm up to 5G, and PwC's research shows that most average users would only be willing to pay about $5 per month more for in-home services or another $4 each month for mobile.
"Many people feel like they already pay too much for their mobile services, and we're seeing that unless the industry makes a very clear and compelling case for 5G, they may be stuck making the investment in the network and not seeing a benefit in terms of revenue and profit," Hays said.
Trade war hampers 5G rollout
The rollout has been hampered by the trade war between China and the United States because most of the world relies on China for the kind of low-cost manufacturing needed to overhaul everything from infrastructure to technology to functions like marketing and sales, according to PwC.
"At its best, 5G should offer up to 10 times the speed of 4G networks. However, in these early days of 5G, there's a lot more variability. Some of the networks that use the very high frequency spectrum are achieving these kinds of very high speeds today. However, they tend to be available only in very limited areas and not really very good for truly mobile use. You kind of have to be sitting in one place to take advantage of them," Hays said.
"To work with a 5G network, your device has to have a compatible set of antennas and a compatible chipset. The chipset in particular has been one of the gating items for the availability of 5G smartphones in particular. Right now, there are several dozen devices that have been announced that will work with 5G networks. However, many of them don't work with every single operator, so they might just work with one and not all, and many of them are not yet commercially available," he added.
Most major cities are in the process of spreading 5G deployments and network operators say dense urban centers are the best places to roll it out because these areas tend to be heavily congested with 4G so they can use the additional capacity that 5G brings. Cities also usually have more people with advanced devices that will eventually be able to handle 5G networks.
The best example is Miami, which is hosting the Super Bowl this week. All four of the national mobile network operators have announced that they have turned on 5G coverage for the entire city of Miami, making it the first place in the United States where all of the operators are offering coverage.
It will take another three to five years before the entire country is covered with 5G, and the reality is that most users will not see a significantly improved experience, Hays added. But as the networks grow and more spectrum are introduced for enabling 5G, these numbers could change and provide the average person with faster internet speeds.
"Enterprises may well wind up the earliest adopters of 5G technology. The reason is that most enterprises are contained within specific locations. They're in an office building, manufacturing facility, they operate a hotel or a theme park or a restaurant or retail store. When you have specific locations, it's a lot easier to ensure that you have strong 5G coverage. We're also seeing many enterprises thinking about private 5G networks at their locations," Hays said.
Companies may create their own 5G networks
Some companies are looking to leapfrog other providers and create their own 5G networks, according to the PwC index. With more localized 5G networks, enterprises can bring new technology to their employees and customers.
"An enterprise application can be much more effective. We're seeing significant interest in enterprises who are starting to think through how they can harness the power of 5G for their customers, for their operations and for their employees," Hays said.
"We're thinking about 5G as a really strong enabler of new experiences. This could be having your factory workers be able to use AR glasses to see information on the quality and productivity of a production line in real time. Or a restaurant having a guest wear interactive 5G goggles to interact with the menu and see how the chefs prep different food. There are a whole lot of different experiences that could be enabled by the increased bandwidth and lower latency of 5G."
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