The delay in adopting 5G is just the latest of several factors holding companies reluctant to deploy next-generation cellular service in their operations, analysts and industry leaders say.
On Monday, AT&T Inc.
and Verizon Communications Inc.
agreed to postpone their 5G rollout to Jan. 19 to give the Federal Aviation Administration more time to assess whether the new wireless signals are interfering with flight control systems.
But even beyond the two-week delay, there is no shortage of reasons why companies are cautious about 5G. The cost and complexity of introducing new infrastructure, as well as lower demand, are holding some back, analysts say.
“Getting your 5G infrastructure right is clearly important,” said John Roese, global chief technology officer at Dell Technologies Inc. and a former executive at Futurewei, the research and development division of Huawei Technologies Co.
The fifth generation wireless service will bring faster connections to cellphone users and give businesses the ability to connect far greater numbers of sensors and other devices to faster networks in all industries, from manufacturing and logistics to retail and agriculture, analysts say. According to analysts, 5G systems also make it easier and faster for companies to configure cellular services themselves.
“It is key to smart factories, smart cities, healthcare transformation, and better access to technology for all communities,” said Roese.
Every major update to cellular networks is a time-consuming process, said Bill Menezes, a director at Gartner Inc supporting those airwaves, “he said. In addition, apps that could generate demand and drive the adoption of 5G are still in a relatively early stage of development.
Still, disputes between authorities could lead to greater uncertainty over spectrum usage rights, which could slow down investment in 5G across the board, said Joe Kane, director of broadband and spectrum policy at the Information Technology and Innovation Foundation, a Washington, DC think tank.
“There are likely a lot of industrial Internet of Things networks waiting to access C-band that will have to wait a little longer now,” Kane said, referring to the frequency range that AT&T and Verizon are counting on to increase their networks.
The first applications ready to take advantage of 5G’s capabilities – faster speeds, lower latency, and more dynamic capacity allocation – are likely to be deployed on the enterprise side in areas such as factory automation and facility management, said James Ratcliffe, an analyst at Wall Street research firm Evercore ISI .
But so far, the provision of 5G networks has preceded application delivery. “I can’t name any companies that have big launches that will be delayed,” he said.
Deutsche Post DHL Group sees many potential supply chain benefits from next-generation wireless technology, a spokesman said – but added that the company has no “big splashes” of 5G projects in the pipeline. DHL plans to use 5G for robotics, scanners and tracking technology, along with smaller rollouts in individual warehouses, distribution centers and campuses, he said.
One application for 5G, said Jefferson Wang, Global 5G and Networks Lead at Accenture PLC, could be video analysis in a production facility where, for example, a machine would not turn on if the employees weren’t wearing protective equipment. The broadband capability and low latency of 5G could “make a decision in a split second to protect a worker from harm,” he said.
“Very few companies are using 5G today, and no one has yet identified business-critical applications,” said Craig Moffett, senior managing director at media and telecommunications research firm MoffettNathanson, a division of SVB Financial Group.
“The delay can’t mean much,” he said.
—Angus Loten contributed to this article.
Write to Suman Bhattacharyya at [email protected]
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