Opensignal 2020 Predictions for USA and Canada

 

Predictions

  1. In the 2020 presidential election, users in Democrat states will have a better mobile experience than those in GOP states
  2. Spectrum constraints will make it difficult for the U.S. to maintain its 5G speed leadership
  3. 5G will be almost everywhere in the U.S. in 2020 
  4. Gamers will be key 5G adopters in 2020 because of low latency and fast speeds
  5. Diverging 5G deployment and marketing strategies risk leading to 5G consumer confusion
  6. U.S. operators will use “creative” spectrum strategies to boost their 5G deployments
  7. 5G will widen the U.S. digital divide by the mid 2020s
  8. New streaming services will force operators to rethink their mobile video strategies
  9. Canada’s success with 4G will make it possible to leapfrog early 5G countries with standalone 5G


 

In the 2020 presidential election, users in Democrat states will have a better mobile experience than those in GOP states

Opensignal forecasts red states in the upcoming 2020 election will be worse off than blue states unless voting intentions change markedly from the last contest in 2016. The average download speed experienced now in those states which voted Democrat three years ago is 18.7% faster than Republican states, or 25.1 Mbps versus 21.1 Mbps. Similarly, upload speeds are 16.8% faster in Democrat states than in Republican ones.  

Mobile networks power the economy and enable Americans to work remotely and on the move. Soon, 5G networks will be foundations for the industries of leading economies. There are significant sectional divides across the U.S. in the mobile experience that Americans enjoy, which parallel and help explain America’s political divisions.

 

Spectrum constraints will make it difficult for the U.S. to maintain its 5G speed leadership 

Unlike in most countries, U.S. carriers have available limited amounts of new mid-band spectrum in the 3.x GHz bands in which to deploy 5G services, at least for now.

What new spectrum that does exist is mostly in the high frequency millimeter wave (mmWave) band that offers extremely limited coverage primarily in dense urban environments. Opensignal users saw just 1% of 5G speed tests run with an active 5G connection recently, because of U.S. carriers’ current need to rely on mmWave bands. This is strikingly different from 5G leader South Korea where 20% of speed tests on 5G devices were using 5G NR. If users’ data consumption continues to rise and insufficient new spectrum is made available to add capacity, U.S. carriers will have a hard time improving the 5G experience for their subscribers. 

 

5G will be almost everywhere in the US in 2020

The use of low-bands like T-Mobile’s 600Mhz and AT&T’s 850Mhz will offer extremely wide 5G coverage — much broader reach than in countries using the more versatile 3.x Ghz mid-band spectrum that can offer great speeds with reasonable coverage. The downside is that 5G speeds on these bands will be only a little faster than the best of 4G.

This trend will accelerate once US carriers deploy dynamic spectrum sharing (DSS) where 4G and 5G users share the same band simultaneously. Because of the lack of the new mid-band 5G spectrum bands like those available across Europe, in South Korea, in Australia and in many other countries, U.S. carriers will re-use existing 4G bands for 5G throughout 2020. 

Today, 5G reach in the U.S. is focused on major cities, which emphasizes the strong U.S. rural-urban divide in all Americans’ mobile network experience. But U.S. carriers are looking at upcoming spectrum auctions to add new bands that would improve their reach as well as their capacity and boost 5G coverage in the country.  

 

Gamers will be key 5G adopters in 2020 because of low-latency and fast speeds

Opensignal’s recent analysis shows that 4G Latency Experience scores in the U.S. are nowhere near the sub-30 millisecond speeds needed for a relatively seamless gaming experience. U.S. operators are offering 5G services in some U.S. markets and although these networks have limited coverage and are primarily in cities, early 5G speed tests are encouraging.

The lightning-fast speeds and ultra-low latency of 5G networks that launch during 2020 as carriers refine their 5G launches will be appealing to gamers, especially players of multiplayer games like Fortnite or Call of Duty that find winning is hard on today’s cellular networks and instead resort to Wifi. But gamers that want the 5G speeds and low latency are going to want to make sure they are on 5G networks when they are gaming, otherwise their experience will be disappointing. 

 

Diverging 5G deployment and marketing strategies risk leading to 5G consumer confusion

Carriers’ 5G strategies will polarize between those operators that offer very wide 5G reach but slower mobile network experience and those services delivering on pockets of extremely fast high-capacity 5G like Verizon’s UWB, and T-Mobile and AT&T’s initial mmWave 5G services. The combination of the two approaches will create confusing messages about 5G’s real benefits and may hurt carriers’ marketing efforts to use 5G to acquire new customers.

It is in everyone’s interest — carriers and consumers — for the benefits of real 5G to be clearly and consistently communicated. Otherwise, consumers may hold off adopting 5G and not see the benefits, and carriers may end up not seeing the returns on their 5G investments that they expect.

 

U.S. operators will use “creative” spectrum strategies to boost their 5G deployments

With minimal new mid-band spectrum available to deploy 5G services for now, we expect U.S. operators to get creative with their existing spectrum holdings. 

One innovative technique we expect to see in 2020 is dynamic spectrum sharing (DSS), which is part of the 3GPP Release 15. DSS will allow operators to dynamically allocate some of their existing 4G spectrum to 5G and use existing radios (as long as they are 5G NR) to deliver 5G services with just a software upgrade. The effect is that carriers will not have to choose to dedicate part of a band for either 4G or 5G users, but instead DSS enables both new 5G and older 4G technologies to co-exist on the same spectrum. This avoids the challenges with many initial U.S. 5G launches, where carriers re-using existing spectrum bands had to take spectrum away from existing 4G users, to dedicate it for 5G.

Another popular strategy is refarming or repurposing of 3G spectrum. Opensignal has quantified that there are still significant numbers of 3G-only users in the U.S. that need to be upgraded to 4G so operators can use that spectrum to accelerate their 5G deployments.These strategies will temporarily ease the burden that some operators face when it comes to deploying 5G. But in the long term, carriers will still need more spectrum to meet users’ needs. 

 

5G will widen the U.S. digital divide by the mid 2020s

Opensignal predicts that by the mid 2020s, the divide between urban and rural users could become even greater if U.S. operators focus their high-capacity 5G buildout using mid and higher frequency 5G on large urban markets. Opensignal sees 5G users experiencing a greater range of speeds than those on older technologies, with very high maximum 5G speeds already. While 5G will be almost everywhere, the rural 5G experience will likely rely on low-band spectrum and offer speeds only slightly better than today’s 4G, yet urban areas will enjoy an ultra fast 5G experience boosted by the availability of mid-band spectrum. 

Verizon and AT&T have initially used mmWave spectrum for their 5G deployments. Transmissions in mmWave spectrum typically can’t travel more than a few thousand feet and don’t penetrate things like buildings or trees. That means operators have to install thousands of cell sites to provide coverage and therefore tend to concentrate their coverage in dense urban areas. In our recent analysis of 5G availability in the USA, Opensignal found that the U.S. has some of the highest 5G speeds but its users can connect to a 5G signal just 1% of the time. 

T-Mobile asserts that its acquisition of Sprint will effectively eliminate the digital divide in the U.S. It will take the company three years to cover 85% of rural Americans and six years to cover 90% of rural Americans (according to the FCC). As we found in our analysis of the urban and rural divide in 4G-LTE markets in the U.S., there is a sizable gap between the speeds and overall experiences of urban and rural users. In particular, we found that in nine states (especially Michigan and Minnesota), rural users experienced download speeds that were more than 10 Mbps slower than those of their counterparts in urban areas.  

 

New streaming services will force operators to rethink their mobile video strategies

U.S. consumers have a growing appetite for streaming video and wireless operators seem intent upon taking advantage of that growth. Verizon recently announced that it will provide a free year of Disney’s new streaming service Disney+ to its existing 4G and 5G unlimited data customers as well as its 5G residential wireless customers. Likewise, T-Mobile has been offering free Netflix to its customers on rate plans that include 5GB of data or more. And AT&T plans give its new HBO Max streaming service to its premium mobile users. In its recent earnings call with investors, Verizon said that the company believes this strategy to bundle free content with unlimited service plans will entice customers to make the leap to 5G. And T-Mobile has used its Uncarrier offerings such as free Netflix to promote customer loyalty and encourage more data usage. 

However, U.S. operators rank relatively poorly compared to the other major developed markets when it comes to providing a good video experience. Opensignal believes that because of this these new streaming services will force operators to take a closer look at their network optimization practices and their caching systems to ensure consumers have a great mobile video experience at high resolutions.

 

Canada’s success with 4G will make it possible to leapfrog early 5G countries with standalone 5G 

Canada’s future 5G deployments are currently hamstrung by two things: the superior speed of the country’s existing 4G networks and the lack of available spectrum in which to deploy 5G services. Opensignal analysis has found that Canadian mobile users already benefit  from fast 4G network speeds, lower latency and greater 4G Availability than many other countries. Canada is not under the same pressure as other countries to move to 5G because of Canadians’ excellent 4G mobile experience. 

But when Canadian carriers launch 5G, they should be able to leapfrog many countries that launched 5G early, like the U.S., and move straight to standalone 5G, which will be more efficient than non-standalone 5G because it has a totally new radio access network and core network and isn’t reliant upon legacy 4G technology.

The other reason for Canada’s 5G timing is because of spectrum challenges. Although Canada auctioned its 600 MHz spectrum earlier this year, netting $3.47 billion from nine Canadian operators, those channels must first be cleared before operators can begin to deploy their networks. In addition, Canadian operators are waiting for the government to auction 3.5GHz spectrum for 5G but that auction isn’t scheduled to occur until some time in 2020.