What Holds Back the United States’ Dominance of 5G Technology?

The rapid growth in data traffic and the convergence of different types of service requirements are creating a new radio spectrum utilization environment. Unlike conventional ways to access radio resources, the candidate spectrum for 5G New Radio (NR) needs to originate to the layout of full frequency bands, which consists of low-band (sub 1 GHz), mid-band (1 to 7 GHz) and high-band (above 24 GHz). Among of these, certain mid-band spectrum—i.e., 3.4 to 4.2 GHz, which is also named C-band—is deemed the most popular frequency band for 5G deployment target on enhanced Mobile Broadband (eMBB) due to its capability of balancing capacity and coverage.

To speed up 5G rollouts, many countries have carried forward spectrum allocation, especially after the 3rd Generation Partnership Project (3GPP) Release 15 was frozen. Meanwhile, the Federal Communications Commission (FCC) of the U.S. government was also promoting Citizens Broadband Radio Service (CBRS) 150 MHz wide broadcast band, i.e., 3550 to 3700 MHz, for 5G use. Unlike other countries’ dedicated spectrum allocation strategy, CBRS in the U.S. market has been designated for sharing among three tiers of users: 1) Incumbent access users, including authorized federal users and the U.S. navy, which are currently operating in the band, 2) The priority licensees who need to acquire Priority Access Licenses (PALs) via competitive bidding, 3) Generally authorized access to allow potential users to use any potion of spectrum without license as long as they don’t interfere with the two above groups. On one hand, CBRS is important to improve spectrum efficiency and provide benefits covering various markets and applications. On the other hand, it is also observed that the FCC attempts to alleviate the shortage of C-Band frequencies available for civil communication services in the U.S. market.

Following the rule of CBRS, wide potential users have opportunities to get access to the spectrum, especially for acquiring performance guaranteed PALs, but single applicants can only acquire up to two consecutive PAL terms in any given license area. As a result, Tier-1 operators, which have nationwide network deployment capabilities, have to compete with other smaller ones to get access to the limited number of spectrums. Moreover, the current state of CBRS allocation is mostly for 4G, which means that the most developed technology, like 5G NR, has no access to C-Band in the U.S. market. Under such circumstances, Tier-1 operators, even with adequate financial support, will unlikely be able to acquire enough spectrum licences to meet the high demand of data traffic in their networks—e.g., due to COVID-19, many people rely on high-speed connectivity to work from home. To solve this issue, the operators, like Verizon, AT&T, and T-Mobile, have to borrow spectrum from smaller companies, like NorthStar, SNR, Dish, and Columbia Capital. This reflects current spectrum allocative and applicable inefficiencies in the U.S. telecom market. Apart from those, many popular spectrum resources are still controlled by the military or different sectors of the government and releasing the spectrum for commercial use is quite difficult with their concerns of national security and public safety.

In terms of 5G infrastructure development and deployment, since there is no homegrown alternative, the U.S. telecom market has to rely on foreign companies, like Ericsson, Huawei, Nokia, Samsung, and ZTE, for its nation-wide 5G mobile network deployment. Moreover, due to the Chinese vendor ban, operators in the U.S. market will be operating in a lesser competitive environment with only two or three infrastructure vendors, which results in higher deployment costs than other operators in other markets. Unlike previous network generations, 5G will be at the heart of the transformation of many industries and represent the backbone infrastructure of prosperity for the country. Compromising or mishandling the 5G network deployment by a minority of vendors could put the entire country at serious security risk. The promotion of OpenRAN stands as a potentially viable alternative to unlock a handful of the foreign vendor-dominated 5G infrastructure market. However, this newly emergent technology has not seen widespread market adoption due to technical challenges, lack of industry readiness, and not enough successful deployment use cases.

The trade war between China and the United States raises another concern. The ban on Chinese infrastructure vendors forced many small operators for rural network coverage in the United States to remove the former’s equipment and seek alternations. Although the U.S. government has granted approximately US$1 billion for this removal, the use of other vendors’ solutions may not be able to bring considerable financial benefit and/or required network performance for these small operators.

Having considered the above challenges, ABI Research expects the limitation of radio spectrum policy and lack of enriched multi-vendor ecosystem form the major barriers that hold back the United States’ dominance of 5G technology. To break the impasse, relevant authorities and network operators should consolidate their approaches to address these concerns:

• Flexible and Balanced Spectrum Strategies, Taking into Account Both Shared Spectrum Requirements and Mobile Operator Priorities to Exist in a Global Value Chain:
  • To remove fragmentation of radio access, the government or policymakers should identify the real needs for spectrum coordination and set up a more flexible regulatory framework for promoting dynamic spectrum utilization policy between spectrum holders and spectrum demanders. One good example is to support spectrum trading solution to help reconcile demand and supply. This approach could increase the market value for spectrum and benefit consumers with better network services. In addition, promoting more shared spectrum access among different Radio Access Technologies (RATs) or anticipants creates another option. For the former, a network operator can utilize advanced technology, such as dynamic spectrum sharing, to efficiently exploit its underutilized spectrum asset for new RAT use. For the later, the increased number of industrial players can get chances to build their networks to meet the growing demand for wireless access.

• Stimulate the Creation of a New Infrastructure Ecosystem Based on Open Networks:
  • Even if more flexible spectrum policies are introduced, the increased infrastructure investment to form a well-established vendor ecosystem is also crucial to accelerate the market growth. Like most operators promoted OpenRAN, the government and relevant authorities should help to establish funds to foster the development of novel technologies, especially for newly established companies. Apart from that, network operators, in collaboration with their partners, such as equipment suppliers, end-market system integrators, and consumer/enterprise customers, should also be more open and agile to deploy innovative approaches and create more field trials and/or commercial launch as much earlier as they can. This will help them accumulate experience and be well prepared for the advent of technological revolution.

Neither of these are short-term initiatives, but both are necessary to allow the U.S. market to follow cutting edge developments in the global domain and create expertise and, most importantly, Intellectual Property Rights (IPR) for 5G and subsequent generations.