by: Tam Ging Wien
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NetLink NBN Trust (CJLU.SI) designs, builds, owns and operates the passive fibre network infrastructure that is the foundation of the Singapore Next Generation Nationwide Broadband Network ("Next Gen NBN"). The Next Gen NBN is an ultra-high-speed internet access delivered to residential homes and non-residential premises throughout mainland Singapore and its connected islands.
We had formerly written about NetLink Trust during its initial public offering back in Jul-2017:
For readers who would like to know the background of NetLink Trust, the reads above are highly recommended. We also recently wrote about NetLink Trust’s financials in our article entitled NetLink Trust – Early Signs of Unsustainable Dividends? which readers can refer to understand better about NetLink Trust’s Financials.
In this article, we will cover a different aspect of NetLink Trust – the upcoming nationwide and worldwide deployment of the 5th generation cellular network technology (“5G”) which is expected to see the first widespread usage in 2020. At this moment, 5G networks are being planned, designed, deployed and in commercial use in varying stages across the world and it appears that China is leading the pack.
With such a massive deployment of the next generation wireless and cellular communications technologies, what does it mean for NetLink Trust’s existing fibre network infrastructure? Will they continue to benefit from this trend and boost their revenue or is this the start of a slow decline?
But before we explore these questions and the impact of 5G networks on NetLink Trust, let us first understand in this article, what exactly in 5G.
The simplest answer is SPEED… 5G represents an upscale existing network technology and promises to bring home broadband speeds to mobile devices. But a full 5G deployment promises much much more than just speed. So, let us breakdown exactly what 5G is.
Before discussing 5G, we should first understand the technologies leading up to 5G:
4G was certainly a turning point in the telco industry as data packages became more important than voice and SMS packages.
5G is the 5th generation of cellular network technology and is the next step in the evolution of mobile networks. Beside the improvement in speed, it is also expected to enhance the coverage and responsiveness of the wireless networks. 5G technology promises 4 main improvements over existing 4G networks:
Let us understand the 4 improves above.
This is by far the easiest improvement to understand. According to the International Mobile Telecommunications-2020 (IMT-2020 Standard) requirements, 5G is expected to deliver peak data download rates up to 20 Gbps and upload rates of up to 10 Gbps. Comparatively, 4G and 3G peak data rates are only 1 Gbps and 200 kbps (0.002 Gbps) respectively. This give 5G approximately 20x higher theoretical download speeds. However in practice, due to the current real world limitations of 4G and 3G networks, users could experience up to 10x to 100x speed improvement for new 5G rollouts.
With speedier download speeds, user experience of smartphones and rich internet applications such as streaming HD video services and mobile games will be greatly improved.
5G achieves these higher download speeds by using higher frequency electromagnetic spectrums. According to communications theories, the higher the frequency of the carrier waves used, the greater the bandwidth. While the spectrum bands vary from country to country, 2G and 3G generally work in the 850MHz to 2100MHz spectrum. For 4G, the range of the spectrum bands increased to 600MHz, 700MHz, 1.7/2.1GHz, 2.3GHz, and 2.5GHz.
5G however operates on 2 may frequency bands – sub-6GHz and millimeter-wave lengths. 5G sub-6GHz frequencies operate in the range of 450 MHz to 6 GHz with the higher frequency having higher bandwidth. For millimeter-wave lengths spectrum frequencies span 24GHz to 52GHz ranges.
But unfortunately, there is no free lunch, the higher the frequency used, the higher the bandwidth but the higher the attenuation to the atmosphere – which is an engineering term for loss of energy. In other words, the higher the frequency used, the faster the wave energy dissipates into the surroundings and signal strength drops significantly faster resulting is shorter range. The use of higher frequency ranges necessitates the telco to install a greater number of antennas for the same area coverage.
Latency is the time it takes for data from your device to be uploaded and reach its target. It measures the time it takes for data to go from source to destination in milliseconds (ms). In other words, the latency is the fastest possible time information can flow between 2 devices.
The average latency for 4G is approximately 50ms to 100ms while for 5G that is expected to reduce from 1ms to 10ms giving anything from 5x to 100x the latency improvement.
Latency is the responsiveness of a device to information or data. The lower latency that 5G promises allows a new generation of applications that could not be possible with 4G. For example self-driving cars, drone deliveries, inter-device communications and long distance virtual medical surgeries that require extremely high responsiveness may stumble in a 4G implementation as sensors, information exchange and other critical data cannot be received in time for the device to react to the information.
Just image the chaos that would happen if self-driving cars were a norm on our roads and they regularly communicate with each other and with centralised traffic control systems. If “emergency break” information from one vehicle could not be communicated in time by the traffic control systems, sensors or between vehicles, other vehicles in the vicinity would not be able to respond in time to the new information causing accidents!
Lower latency gives rise to a more responsible real-time experience.
Previously not possible with 3G and 4G, network slicing is the ability to create a set of "virtual networks" on the same infrastructure, each with its own unique characteristics using a combination of latency and bandwidth. For example, a specific telco may allow self-driving cars or medical applications to connect to a virtual network that makes minimizing latency a priority while smartphones connect to a different virtual network that offers higher bandwidth optimised for high definition video streaming.
Various “tenants” could be allocated to different "virtual networks" without the need to erect unique and different infrastructure.
From the perspective of 5G implementations, there are 3 main types of use cases of these “virtual networks”:
The ability to perform network slicing would also allow ad-hoc allocation of resources to a specific purpose for a short time without affecting other parts of the network. For example during new-year’s eve celebrations, large crowds are expected to gather in only a very small area. Network slicing allows various operators to dedicate a larger portion of the network resources to the very small area so that network quality will be minimally impacted.
A telco could also take advantage of access network resources and tenant that out to other telcos, MVNOs or other 3rd parties that require the network resources for a limited amount of time. This could open up new business models for 5G infrastructure owners.
Flexible numerology is the ability for the same network to assign different amounts of bandwidths to different types of devices. For example, a smartphone may require larger amounts of bandwidths while a sensor would require smaller amounts of bandwidth. Effectively, the network is able to dynamically change the width of data channels for different frequency bands.
Besides that, 5G flexible numerology also allows the direction of the of the slot to be allocated, basically how much to allocate to the upload link, how much to allocated to the download link or a mixture of both.
While numerology is not exactly new, there are some differences between 4G and 5G. In the 4G networks, the numerology is fixed to 15 kHz spacing between subcarriers while in 5G the spacing is flexible which is far more optimised compared to fix spacing. Just imaging the data-light transfer of sensor data taking up 15kHz spacing would be highly inefficient in the overall spectrum. However, if the spacing can be reduced down to 1 part of 128, 1 part of 256 or event 1 part of 512, the network can be used more efficiently for other uses especially when more and more smart devices requiring low data consumption connect to the network.
Hopefully with this article, readers would have a much better idea of what entails the next generate 5G cellular network technology. 5G promises more than just speed, but also increase reliability, responsiveness and coverage. The introduction of 5G will bring with it new possibilities of applications from IoTs, interconnected devices and new mission critical applications.
In our next article, we will discuss 5G and its implication on Netlink Trust. So stay tuned to our weekly newsletter!
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