After years of industry attention, 5G has reached a tipping point.
In 2020, the global market for 5G infrastructure – combining Radio Access Network (RAN), core network, backhaul and transport – was valued at $2.64 billion, with a projected CAGR of 49.8% between 2021 and 2028.
As households have relied on high-speed internet to stay connected throughout the pandemic, growing demand for broadband likely aided the rollout of next-generation cellular service.
Worldwide, 5G was predicted to make up almost 40% of communications service providers' total revenue from wireless infrastructure in 2021. It was the fastest-growing segment of the market, and the only one Gartner saw as a "significant opportunity" for growth as investment in previous generations of service declines.
Most carriers in the U.S., however, are still in the early stages of deploying 5G.
According to an estimate by Accenture, U.S. telecom operators will need to spend $275 billion to fully build out their networks – almost 100x the size of the global market for 5G infrastructure in 2020.
In return, however, this investment could create $420 billion in annual GDP.
5G: A Massive Infrastructure Investment – With Significant Returns for End Users
5G promises lower latency and higher bandwidth, allowing devices to use more data, more quickly. While consumers are anticipating faster smartphones, the network also offers a third key benefit: more devices can connect at each point in the network.
An ultra-fast, dense network opens up new possibilities for machine-to-machine communication, enabling large Internet of Things (IoT) networks that can act on information in near-real time.
By connecting a diverse range of assets, operators can manage them more efficiently. In a "smart city", for example, garbage cans can ping sanitation trucks to schedule pick-ups when they are full.
"[5G] is not just about the benefit someone sees on their phone – all these ancillary "˜things' are going to make their life easier because they're leveraging this network," says Sean Whalen, a Manager of Broadband Utility Sales at Graybar.
In fact, industry analysts expect that 5G will be the first generation of cellular technology mainly driven by enterprise use cases, with consumer use cases taking over a decade to generate ROI.
Although carriers are still figuring out how they will monetize service, they have already begun a massive investment in infrastructure to build out the network.
To reduce latency and improve bandwidth, 5G uses higher-frequency portions of the spectrum, which can only travel shorter distances. Instead of the macro cell towers of previous generations, 5G will rely on a greater number of "small cells" concentrated closer to users – up to 100x the number of antenna locations required by 4G.
"Carriers are going to leverage existing sites they have where they could add a new radio ... but the sheer quantity needed for 5G to be effective means they have to build many more new sites," Whalen says.
In his first job out of college, Whalen worked with contractors to deploy 3G; before coming to Graybar, he led a construction team managing a 4G build-out. Compared to previous generations, he says that the 5G rollout has been a "very different" process.
"There's a lot more infrastructure, and the footprint is much closer to the user."
Given the expense, carriers are targeting rollouts to areas with the highest concentrations of users. So far, Whalen's team has mostly worked on 5G projects in downtown cores of Tier 1 and Tier 2 cities.
"For 5G to work, [carriers] are going to focus on dense urban areas first. It's going to be a while before they get to rural areas, because they won't see the return on investment as quickly," he says.
To Build Out 5G, Contractors Take on Complex Installs
Once a carrier identifies a target city, it typically designs its network in nodes of 10-20 small cells – which can take weeks or months for a municipality to review. As nodes are approved, the carrier divides them between multiple contractors.
Building out a dense network in an urban environment requires hands-on coordination. Contractors must ensure they have active permits to dig at each site, as well as control traffic, work around city maintenance and repair crews and more – while minimizing disruption to the public right of way.
"There are more variables that might stop them from getting access to a site, and every time they have [crews] standing down they're incurring costs instead of making money – versus a rural tower, where they can arrive on site without distraction or outside interference, open up the shelter and start and stop working at their discretion," Whalen says.
Despite the complexity, contractors have to move quickly to stay profitable.
"The name of the game is volume with 5G densification. You have to churn through a lot more small cells in a given week, versus building out or upgrading a tower site," he says.
To build out previous generations of service, a crew of four might have spent up to a week on each tower site; now, a two-person crew may install a small cell a day. Instead of climbing a 200-foot tower, they are working on utility poles from a bucket truck.
"The sites are quicker turns ... and the skill set is a little different," Whalen says.
Building out 5G in rural areas will bring new challenges as contractors manage jobsites in remote locations with rugged terrain.
Graybar's Material and Logistics Support Streamlines 5G Deployments
To keep these fast-paced installs on time and on budget, contractors in the field need the right materials, at the right time.
"Material is what slows them down the most," Whalen says.
By getting involved from design to install, his team can help streamline the process for both carriers and contractors.
Although small cells use a standard set of equipment, regional carrier teams often prefer certain suppliers, and may design networks differently.
Graybar carries passive and active components from multiple leading manufacturers; when carriers bring in Whalen's team during the design phase, they can work with suppliers to find the equipment designed for the best fit and plan inventory availability in advance.
Once they've secured the right material at a competitive price, his team leverages Graybar's logistics capabilities to ensure it arrives on site at the right time.
They can kit the bill of materials for each job, shrink-wrapping it on pallets and labelling them with site names. Contractors can pick them up from their local warehouse on the way to the site, or Graybar can deliver a week's worth in advance. To ensure crews also have the consumable items they need, Whalen's team can restock the contractor's trucks and warehouses from a nearby Graybar branch as they run through material.
"Graybar's advantage is the amount of branches we have. None of the other wireless-focused distributors can compete with bringing the material as close to the project as Graybar can," Whalen says.
Backed by Graybar's national footprint and supplier relationships, Whalen can act as the point person for material and logistics on his customers' 5G projects.
Recently, he helped a carrier upgrade an event facility to provide consistent, high-speed cellular coverage during a major sporting event. When one supplier missed key deadlines, Whalen was able to quickly bring in an equivalent manufacturer to keep the project on schedule. During construction, the local Graybar warehouse held onto several million dollars of material and scheduled just-in-time deliveries to keep crews working without taking up space on the jobsite.
"[Sometimes] contractors just come to us for the electrical and grounding, because they think that's who Graybar is," Whalen says. "[But] contractors can also benefit from us getting involved [early] because we can supply the entirety of their bill of material, and then we can plan to have the right inventory when and where they need it. The carriers also can benefit because we can share new product solutions with them and hopefully save them money by having the right mix of products and standardization from key suppliers."