Will 5G Have a Clear Win over Wi-Fi for Industrial Digital Transformations?

In April 2020, the Federal Communications Commission (FCC) announced that 1200 MHz 6GHz spectrum would be opened in the U.S. market for unlicensed use. This was great news for Wi-Fi-like applications, as it will expand more spectrum (and also capacity) for players whose telecom business is mainly focused on unlicensed bands. To further strengthen the position of technologies using unlicensed bands, the 3rd Generation Partnership Project (3GPP) also introduced the first global cellular standard that supports 5G New Radio (NR) for operation in Unlicensed bands (NR-U) with Release 16, which was frozen on July 3, 2020. Unlike the 4G LTE for operation in Unlicensed bands (LTE-U) or LTE Licensed Assisted Access (LAA), 5G NR-U enables both license-assisted communications and standalone use of unlicensed spectrum for 5G. Both activities could help the vast majority of Mobile Network Operators (MNOs) expand their network connectivity. Besides, they can also lower the threshold to embrace more vertical enterprises to smoothen their industrial digital transformations.

Allowing 5G operation in unlicensed spectrums with 5G NR-U means the same spectrum will inevitably need to be shared with Wi-Fi and many other radio access technologies. Therefore, guaranteeing non-interference will become an even more important aspect to consider. Among these technologies, Wi-Fi has occupied the pivotal position in these bands due to its broad coverage of applications. Going back to the days when LTE-U was deployed, there was a nonstop debate between the cellular and Wi-Fi communities in terms of coexistence and maintaining efficient spectrum utilization. The emergence of LAA and MulteFire put the tension around Wi-Fi at ease due to their well-organized interference controls, and the valuable experiences gained from the deployments of these technologies will be translated into 5G NR-U in the 3GPP Release 16. Given the green light for 5G to operate in unlicensed bands, will 5G have a clear win over Wi-Fi, especially for today’s industrial evolutions?

Before the arrival of 5G, cellular and Wi-Fi created different architectures and ownerships. Cellular was mainly designed for telecom mobility for outdoor scenarios, such as making phone calls when driving or walking along a road. Meanwhile, Wi-Fi was the dominating and preferred technology for data link connectivity in local area environments, such as home broadband, corporate offices, and public venues. Moving forward to the digital world, 5G and Wi-Fi both need to adapt to Internet Protocols (IPs) and support different data traffic for various implementation scenarios. From a technical perspective, 5G and Wi-Fi share the same wireless foundations—e.g., Orthogonal Frequency-Division Multiple Access (OFDMA), high-order Quadrature Amplitude Modulation (QAM), and multi-user Multiple Input, Multiple Output (MIMO) technology—to boost network throughputs. In terms of implementation use cases, 5G will still mainly anchor on licensed bands to provide more predictable and guaranteed services and Wi-Fi will be used to cover local area networking with the expanded capacity and reliability requirements.

The emergence of 5G technology operating in unlicensed and shared bands has created new opportunities and business models for many enterprises to meet their network needs. For example, with the realization of these types of spectrums, network deployment can now be done without relying on spectrums from MNOs. This approach can largely reduce the cost of network investments and lower the threshold for Small or Medium-sized Enterprises (SMEs) to enter the market. Moreover, running a wireless network on 5G-empowered unlicensed and shared bands, enterprise users can now enjoy the cellular-like performance with broad 3GPP-branded ecosystem supports. Most importantly, by enabling cellular network operations in unlicensed and shared bands, the enterprise users, especially in countries where licensed spectrums are still only available through operators, will have the potential to build up and manage their networks in-house with full control of data traffic flows. This will allow them to capture and analyze information in real -time and flexibly include additional services to create new revenue streams.

It seems that 5G combining with unlicensed and shared spectrum use will do the job for enterprises. So, what is the role of Wi-Fi? Actually, Wi-Fi deployments offer a number of clear advantages. The first is equipment cost since 5G needs specified chipsets to support its physical layer functionalities and the ecosystem of 5G devices has not been broadly expanded. As a result, deploying enterprises’ private networks with 5G will require higher Capital Expenditure (CAPEX) than Wi-Fi deployments do until the 5G device ecosystem matures. Apart from that, the understandability of the network for enterprises’ Information Technology (IT) departments forms another concern. Specifically, it is critical to allow an enterprise’s IT engineers to be able to expand policy management into their networks. However, most of the commercialized 5G networks are deployed and operated by MNOs or other Communications Service Providers (CSPs) due to their rich experiences in the domain, and such a situation will most likely be expanded to the unlicensed and shared spectrum bands. Thus, this could result in limited visibility for enterprises’ IT engineers of the network operations, as we mentioned before. For enterprises that treat data security and visibility as their priority, the deployment strategies with limited network controls are not acceptable.

Given that enterprise users desire to deploy a single network infrastructure that can address a multitude of different use cases with different requirements, ABI Research believes that 5G does have advantages. This is mainly because of the standardized network technologies supported by the strong 3GPP ecosystem. Furthermore, the nearly matured cloud-native network architecture can easily offer different types of value propositions to end users. However, to give it a full play, MNOs and/or other CSPs need to clearly understand the demands of the enterprises and be able to allow the IT engineers to participate and have visibility of network operations. The second option for helping enterprises build the network will be to embrace the hybrid architecture that allows 5G and Wi-Fi deployments to coexist and create a converged environment. In this case, by introducing the newly emerged services, such as OpenRoaming promoted by the Wireless Broadband Alliance (WAS), enterprise users will be able to leverage their network access to a seamless and secure platform without any interruption, thereby accelerating their digital transformations and fostering business innovations.