5G speeds are great, but they come at a cost
The 5G revolution may have plenty of virtues outside its speed advantages, like the ability to maintain many more connections on one tower or base station than your typical 4G dispenser, and way less latency than its predecessor the 4G LTE standard, but it’s power-intensive.
We estimate that telcos spend on average 5-6% of their operating expense (opex) — excluding depreciation and amortization (D&A) — on energy costs, usually reported as “utilities”. With the shift to 5G mobile access networks, there will be upwards pressure on this ratio.
A typical 5G base station consumes up to twice or more the power of a 4G base station. The disparity can grow at higher frequencies, due to a need for more antennas and a denser layer of small cells. Edge compute facilities needed to support local processing and new Internet of things (IoT) services add to overall network power usage. The bottom line is that, in an increasingly 5G world, telcos will face significant growth in their energy bills. To address this issue, telcos will need to take actions at the organizational, architectural, and site levels.
With the New T-Moile looming on the horizon, and its cross-pollinated spectrum holdings, the shift to 5G will be speeding up even in these trying coronavirus times. As carriers and their MVNOs face increased fixed and operating cost pressures with the move to the new wireless standard, those costs may very well be passed on to the consumers as we face the gradual switch to 5G connectivity.