Will 2020 be the year of the 5G enterprise? Unlikely.

Deloitte predicts that 2020 will see the emergence of 5G for enterprises – but only for very specific verticals based in a city where 5G is available. Which means most enterprises will have to wait longer.

Photo by Jack Sloop.

You’ve no doubt been swamped with plenty of hype over 5G and its game-changing properties that will enable everything from self-driving cars to hologram phone calls – or at least will supercharge your smartphone’s download speeds. According to the same hype machine, 5G will also be a game-changer for your enterprise in the form of a private network. And Deloitte says it will do just that starting this year.

Deloitte’s TMT division recently released its top tech predictions for 2020, and one of them is this: “more than 100 companies worldwide will begin testing private 5G deployments by the end of 2020, collectively investing a few hundred million dollars in labor and equipment.”

To an extent this is already happening – car manufacturers like Audi are looking at private 5G for its Industry 4.0 manufacturing plants. Hong Kong’s SmarTone recently showcased 5G enterprise apps co-developed with entrepreneurs for construction site safety, site inspection, connected ambulances and robot baristas, among others.

But Deloitte expects private 5G to really get going in 2020 – partly because we’ll be seeing more 5G service launches in general this year, but mainly because this is the year that we get a new 5G standard called Release 16, which is scheduled to be finalized in June 2020.

Confused? Here’s the deal:

5G is being standardized in phases by the 3GPP and the ITU. The networks that have commercially launched to date are based on 3GPP Release 15 (completed in 2018), which essentially is an upgrade for LTE radios. Release 16 aims to deliver most of the crucial features 5G needs to support industrial IoT apps for verticals: fiber-level speeds, latency down to 1 millisecond, 99.999% reliability, massive density to support millions of IoT devices, time sensitive networking, network slicing and the ability to use unlicensed spectrum.

For industrial apps, another key feature of Release 16 is CoMP (coordinated multi-point) technology that mitigates the interference issues usually encountered when deploying wireless technologies in environments with lots of metal in them.

So once Release 16 comes out, says Deloitte, the enterprise 5G market will really kick into gear.

Do you really need 5G?

What does this mean for your business?

Not a lot, unless your business involves industrial environments like manufacturing plants, logistics centers and ports – these are the sectors where Deloitte expects private 5G to flourish first. That’s chiefly because 5G is designed for such businesses – which is to say, it’s designed to solve the kinds of problems manufacturing plants, logistics centers and ports have. Release 16 is essentially designed to completely replace wired Ethernet LANs, but it’s also designed to support massive demand for IoT, which requires a wireless solution, and mission-critical apps that need real-time capabilities and prioritized bandwidth.

That’s not to say the average enterprise can’t use 5G – the question is whether they really need it. Put another way, if your WLAN is working just fine, is it worth the expense of switching over to 5G? Maybe not, considering that (1) 5G will (at least initially) be more expensive and (2) the new Wi-Fi 6 standard promises peak speeds of 9.6 Gbps and 4x the density of the previous generation. 5G is only really worth investing in if it helps you do things that Wi-Fi, fiber, Ethernet and LTE can’t do. For now, most enterprises don’t fit that description.

It’s worth adding that 5G and Wi-Fi 6 aren’t mutually exclusive – in the longer term, most enterprises are expected to use a mix of both alongside fiber and other connectivity options. The key concern is how well these technologies work together.

The answer may lie in several ongoing initiatives. For example, the Wireless Broadband Alliance and the Next Generation Mobile Networks (NGMN) Alliance have teamed up to make the case for converging 5G and Wi-Fi. Meanwhile, in Europe a consortium called the 5G-Clarity project aims to integrate 5G, Wi-Fi and even LiFi. But the results (if any) will take time to make it to your office.

If you do want a private 5G network, the good news is you don’t necessarily have to install it yourself (which would mean hiring people who understand cellular networking). Deloitte says that only the largest companies will go the DIY route, while SMEs will have the option of leasing the gear and outsourcing network management to a mobile operator, a systems integrator or the equipment vendor.

The catch is that mobile operators don’t have a lot of expertise in selling services to enterprises beyond basic connectivity or smartphone plans. And while most operators have their eye on the enterprise segment for 5G, the initial focus remains on consumers. That’s understandable, given that it’s the market they know best and Release 15 isn’t optimized for enterprise, but it raises the question of how prepared your local operator is to play the role of SI and work out what problems you have that 5G can help solve.

Where the 5G is (or isn’t)

All of this is assuming 5G is commercially available in your market to begin with. As of this posting, you’re in luck if you’re reading this from South Korea, China, the Philippines, Australia or New Zealand – and you happen to have an office in the handful of cities where 5G has been launched in those markets. (If you’re not sure, consult this interactive 5G map from speed test site Ookla.) If not, well, end of discussion.

To be sure, there are more 5G launches scheduled around Asia later this year in markets like Hong Kong, Japan, Malaysia, Singapore, Taiwan and Vietnam. But again, coverage will be limited, and everything depends on the operator’s ability to understand your business needs, what version of 5G they’re offering, and whether it’s worth the cost (or whether the promised efficiency and productivity gains offset the upfront cost).

Bottom line: private 5G may be coming in 2020, but not for everyone – at least not yet. To be clear, 5G will be far more widespread in the next few years, so now is a good time to kick the tires, explore the options and ask operators very pointed questions. Just don’t fall for the hype.