Telcos are barely done rolling out 5G networks — and they’re already talking about ‘5.5G’
You probably remember mobile operators raving about the promise of 5G several years ago. Now, they’re getting excited about a new upgrade: 5G Advanced.
Angel Garcia | Bloomberg | Getty Images
BARCELONA, Spain — Telecom operators haven’t yet finished rolling out 5G wireless mobile networks. And yet bosses of major carriers are already talking about building something called “5.5G,” or “5G Advanced.”
There was a lot of chatter about 5.5G at the Mobile World Congress tech trade show in Barcelona, Spain.
MWC brought together thousands of people in the mobile industry, including from leading telecom companies like Deutsche Telekom, Orange, Telefonica, BT, and Vodafone.
At the show, executives from some of these companies that they were working toward rolling out a new generation of mobile internet.
That would enable even more advanced applications than the data-intensive apps we’ve all come to use today, such as Facebook, Instagram, YouTube, Netflix, and TikTok.
These apps are already well served by the current mobile internet, but in the future 5.5G is expected to power more advanced applications.
That includes mixed reality headsets, which are getting more and more powerful with tech giants like Apple launching its Apple Vision Pro and Meta upgrading with its Meta Quest Pro headset last year.
But it also means some of the things that 5G promised us years ago, such as self-driving cars, unpiloted air taxis, and smart manufacturing enabled via the so-called internet of things (IoT), will start to become a reality, too.
What is 5G?
5G is the next generation of mobile internet after 4G, which promises superfast data speeds and better coverage.
You probably remember mobile network operators raving about the promise of 5G several years ago. Carriers in China, South Korea, the United States, and Europe, properly got underway with launches of 5G networks in 2019.
Now, nearly five years on, penetration of 5G among consumers remains low.
The number of consumers with a 5G connection is increasing. But it’s still well below “mainstream” levels.
5G has been the fastest mobile generation rollout to date, surpassing 1 billion connections by the end of 2022, rising to 1.6 billion connections at the end of 2023 and 5.5 billion by 2030.
5G connections are expected to represent more than half (51%) of mobile connections by 2029, though, and that is forecast to then rise 56% by 2030. Those numbers are up to date as of January 2024, GSMAi said.
5G has been positioned by the telecoms industry not just as a consumer product for faster download speeds, but as a network that could underpin new technologies like driverless cars or unpiloted air taxis.
That’s because it has lower latency than 4G. That means the time it takes for devices to talk to each other is significantly reduced, a feature important in scenarios where data needs to be delivered quickly.
However, after hundreds of billions of dollars of investment into 5G networks, carriers have struggled to see the return. Analysts say that the real potential to monetize 5G might be on the horizon.
What’s ‘5.5G,’ and why are telcos talking about it?
5G Advanced, or the name for the next stage of 5G, is the next evolution of mobile networks.
Telecommunications networks require standards. These are globally accepted technical rules that define how a technology works and its interoperability around the world — interoperability is the ability for two or more systems to work together.
These standards take several years to come up with and finalize and involve several players from companies to academics and industry bodies.
The standards-setting body 3GPP, which contributed to 5G, uses a system of parallel “releases” to provide developers with a platform to implement new features at a given point and then allow more functionality to come in further releases.
In the 3GPP releases system, 5G is considered release 17. That means 5.5G is dubbed “release 18” by the industry.
Release 19 is what will effectively be 6G, another major network upgrade. Work is also underway on 6G standards, but it’s still in the early stages.
“Main priorities for developing 5G Advanced standards are to increase commercial relevance of 5G by expanding vertical markets, resolve deployment issues, and continue technology evolution to build a bridge towards 6G,” Milind Kulkarni, vice president and head of InterDigital’s wireless labs, told CNBC.
“Research in standards have introduced, improved, and finalized several new enterprise-specific features for 5G Advanced, including network slicing, the integration of private and public networks, enhanced positioning, and even applications specific to each enterprise vertical.”
Howard Watson, the chief technology officer of British telco giant BT, said that 5.5G will promise faster uplink speeds, meaning you’ll be able to stream video, post things online, and play multiplayer games, much faster than before.
“My children’s generation, or even dare I say it, my grandchild’s generation … that generation, they share a lot. And clearly, sharing requires quite a lot of upstream,” Watson told CNBC on the sidelines of MWC. “There will probably be a doubling of upstream capacities coming in release 18.”
Further benefits to 5G Advanced over current 5G, telco execs say, is that it will make the networks themselves more “intelligent” through the application of AI and machine learning, while also boosting performance and reducing overall power consumption.
Mats Granryd, director general of the GSMA, told CNBC he hopes the industry can continue focusing on staying in a 5G environment for years to come, as there’s still plenty of work to be done on monetization.
“I hope that we can stay in 5G territory for long, because normally in the 4G environment, you and I were the consumers. And it’s quite quick for us to just say, change a SIM card,” Granryd told CNBC’s Karen Tso. “In 5G, 5G is a technology standard that is predominantly towards business to business. And it takes a longer time for businesses to convert and use new technology.”
“This normal of 10 years between standards, I wonder if that’s going to be enough,” Granryd added. “We hope that we can stay in a 5G environment. 5G advanced — 5G standalone, that’s absolutely fine. But push out the time and make sure that we have enough mileage to capitalize and monetize and show the world that 5G is a fantastic technology.”
With 5G Advanced, telecoms firms could start to make more money from their 5G rollouts by charging higher prices. And, with a key focus of 5G being enterprise applications, that could be a much more significant money maker for network operators than consumers.
Telcos haven’t yet revealed how much more a 5G Advanced data plan will cost compared with 5G. But analysts expect they’ll look to make money from 5G Advanced by getting clever about subscriptions and using AI and other technologies to operate their networks more efficiently.
With a key focus of 5G being enterprise applications, that could be a much more significant money maker for network operators than consumers.
The telco industry has been awash with talk about so-called “private 5G” networks, nonpublic mobile networks that are installed on-premise at companies’ work sites for example, in a smart factory, or remote surgery operation.
When will 5G Advanced be here?
Chinese telecommunications equipment supplier Huawei expects 2024 to be the year that commercial deployments of 5G Advanced officially begin. For Huawei, 5.5G is a network that will be capable of 10 Gbps downlink speeds — and in case you’re wondering, yes, that is very fast.
Huawei revealed eight 5.5G “innovation practices” last week which it says will help operators build 5.5G networks across all frequency bands. The company is working with carriers in the Middle East, Europe, Asia Pacific, and Latin America to deploy 5.5G.
It’s going to take some convincing for consumers to go from 5G to 5G Advanced, given the little noticeable improvement they’ve seen from their phones upgrading to 5G in the past five years. But Philip Song, Huawei’s chief marketing officer of the carrier business group, said that it’s important telcos convey the use cases of 5G Advanced to consumers well.
“The most important thing for us is how can we support the customers,” he said at a press briefing last Tuesday, in response to a CNBC question. The “biggest success” for 5.5G will only arrive if carriers “acknowledge solutions” and bring that across to customers sufficiently.
In some markets, operators are still working on deploying 4G, Song said — but he doesn’t think that matters because different parts of the world “are at different stages.”
Watson told CNBC that he thinks 5G Advanced will arrive on the EE network later this year. That’s because the 3GPP standard release 18, or 5.5G, is already open for experimentation and telcos have been working on trials. It is expected to conclude by June 2024, by which time the protocols that enable 5.5G should be stable.
“Release 18 we will start to roll out this year,” Watson told CNBC. “We also plan to launch 5G standalone this year as well.”
5G standalone is different from 5G Advanced. Sometimes referred to as “true” 5G, it refers to the development of a 5G network that uses technology independent of 4G and comes with the promise of realizing 5G’s full potential.
5G Advanced, on the other hand, is a complete evolution of the network.
There’s no definitive date for when 5G Advanced will start to be rolled out, though. And telcos are on the clock to get it up and running.
“I hope that we will be at the bandwidth, the latency, the capability needs to be sufficient,” Mats Granryd, director general of the GSMA, told CNBC’s Karen Tso at MWC last week.
“That’s what we’re struggling with to see in Europe. In five years, we’re going to have a quadrupling of data usage. And I am really concerned about what’s going to happen at that stage.”
“Will we have cut-offs? Will we have congestions?” he added. “Will we have a much much worse situation, a much worse landscape? By having that worse landscape, the competitiveness of Europe will go down.”
— CNBC’s Arjun Kharpal contributed to this report
Technology
OpenAI dissolves team focused on long-term AI risks, less than one year after announcing it
Boaz Weinstein, founder and chief investment officer of Saba Capital Management, during the Bloomberg Invest event in New York, US, on Wednesday, June 7, 2023.
Jeenah Moon | Bloomberg | Getty Images
Boaz Weinstein, the hedge fund investor on the winning side of JPMorgan Chase’s $6.2 billion, “London Whale” trading loss in 2011, is now taking on index fund giant BlackRock.
On Friday, Weinstein‘s Saba Capital detailed in a presentation seen by CNBC its plans to push for change at 10 closed-end BlackRock funds that trade at a significant discount to the value of their underlying assets compared to their peers. Saba says the underperformance is a direct result of BlackRock’s management.
The hedge fund wants board control at three BlackRock funds and a minority slate at seven others. It also seeks to oust BlackRock as the manager of six of those ten funds.
“In the last three years, nine of the ten funds that we’re even talking about have lost money for investors,” Weinstein said on CNBC’s “Squawk Box” earlier this week.
At the heart of Saba’s “Hey BlackRock” campaign is an argument around governance. Saba says in its presentation that BlackRock runs those closed-end funds the “exact opposite” way it expects companies to run themselves.
BlackRock “is talking out of both sides of its mouth” by doing this, Saba says. That’s cost retail investors $1.4 billion in discounts, by Saba’s math, on top of the management fees it charges.
BlackRock, Saba says in the deck, “considers itself a leader in governance, but is crushing shareholder rights.” At certain BlackRock funds, for example, if an investor doesn’t submit their vote in a shareholder meeting, their shares will automatically go to support BlackRock. Saba is suing to change that.
A BlackRock spokesperson called that assertion “very misleading” and said those funds “simply require that most shareholders vote affirmatively in favor.”
The index fund manager’s rebuttal, “Defend Your Fund,” describes Saba as an activist hedge fund seeking to “enrich itself.”
The problem and the solution
Closed-end funds have a finite number of shares. Investors who want to sell their positions have to find an interested buyer, which means they may not be able to sell at a price that reflects the value of a fund’s holdings.
In open-ended funds, by contrast, an investor can redeem its shares with the manager in exchange for cash. That’s how many index funds are structured, like those that track the S&P 500.
Saba says it has a solution. BlackRock should buy back shares from investors at the price they’re worth, not where they currently trade.
“Investors who want to come out come out, and those who want to stay will stay for a hundred years, if they want,” Weinstein told CNBC earlier this week.
Weinstein, who founded Saba in 2009, made a fortune two years later, when he noticed that a relatively obscure credit derivatives index was behaving abnormally. Saba began buying up the underlying derivatives that, unbeknownst to him, were being sold by JPMorgan’s Bruno Iksil. For a time, Saba took tremendous losses on the position, until Iksil’s bet turned sour on him, costing JPMorgan billions and netting Saba huge profits.
Saba said in its investor deck that the changes at BlackRock could take the form of a tender offer or a restructuring. The presentation noted that BlackRock previously cast its shares in support of a tender at another closed-end fund where an activist was pushing for similar change.
At the worst-performing funds relative to their peer group, Saba is seeking shareholder approval to fire the manager. In total, BlackRock wants new management at six funds, including the BlackRock California Municipal Income Trust (BFZ), the BlackRock Innovation and Growth Term Trust (BIGZ) and the BlackRock Health Sciences Term Trust (BMEZ).
“BlackRock is failing as a manager by delivering subpar performance compared to relevant benchmarks and worst-in-class corporate governance,” the deck says.
If Saba were to win shareholder approval to fire BlackRock as manager at the six funds, the newly constituted boards would then run a review process over at least six months. Saba says that in addition to offering liquidity to investors, its board nominees would push for reduced fees and for other unspecified governance fixes.
A BlackRock spokesperson told CNBC that the firm has historically taken steps to improve returns at closed-end funds when necessary.
“BlackRock’s closed-end funds welcome constructive engagement with thoughtful shareholders who act in good faith with the shared goal of enhancing long-term value for all,” the spokesperson said.
Weinstein said Saba has run similar campaigns at roughly 60 closed-end funds in the past decade but has only taken over a fund’s management twice. The hedge fund sued BlackRock last year to remove that so-called “vote-stripping provision” at certain funds and filed another lawsuit earlier this year.
BlackRock has pitched shareholders via mailings and advertisements. “Your dependable, income-paying investment,” BlackRock has told investors, is under threat from Saba.
Saba plans to host a webinar for shareholders on Monday but says BlackRock has refused to provide the shareholder list for several of the funds. The BlackRock spokesperson said that it has “always acted in accordance with all applicable laws” when providing shareholder information, and that it “never blocked Saba’s access to shareholders.”
“What we want is for shareholders, which we are the largest of but not in any way the majority, to make that $1.4 billion, which can be done at the press of a button,” Weinstein told CNBC earlier this week.
WATCH: CNBC’s full interview with Saba Capital’s Boaz Weinstein
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Environment12 months agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports1 month agoStory injured on diving stop, exits Red Sox game
-
Sports7 months agoGame 1 of WS least-watched in recorded history
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment1 year agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Environment1 year agoTesla advances Powerwall pilot project with German electric company