Not Every Building Needs 5G Right Now, But You Should Still Plan For It
The technology uses higher-frequency radio waves than existing cellular networks, allowing for faster download speeds and more connected devices. But realistically, the U.S. is a few years away from a full commercial rollout of 5G technology, and existing 4G wireless networks are still able to meet the needs of most users.
RF Connect Executive Vice President Jeff Hipchen said a lot of the commotion around the immediate need for 5G technology is marketing hype.
“The reality of it is, there's still a lot of legs left with 4G and what it can do,” Hipchen said during a Bisnow webinar June 18.
Hipchen noted that on average, the turnover in new cellphone handsets is between 12% and 20% a year, meaning that it could take between three and five years before there are a significant number of people using 5G-enabled devices.
Anixter Vice President of Sales, Wireless and Service Providers Sam Gilson said some building owners and tenants are spending money on 5G-enabled wireless systems, even though many of them have no need for it right now. Those systems may not be fully useful until 5G is actually a requirement from an application perspective in office buildings.
“It's not necessary, I don't think, to spend the money to have 5G throughout a building today, but the system absolutely needs to be able to support that [transition] very easily and cost-effectively … relative to your return,” Gilson said.
A project can take anywhere from two to four years from design through to delivery, Hillwood Urban Senior Vice President Walt Zartman said. As a result, developers are frequently working with today’s technology but must try to anticipate what could come next.
In the past, only a small part of a building’s floor plan might have been dedicated to technology, but things have changed. Now, technology is core to the planning of a new development, especially when weighing costs and results.
“As far as planning, evaluation of cost, it's becoming so much more important, and you've really got to pay attention to what you're doing in the building and make sure you're ultimately serving your clientele,” Zartman said.
To prepare for future technology upgrades, developers need to consider including more power conduits to support those systems, and also think about the separation and redundancy aspects of new systems, Zartman said.
“There's a lot of wired components that make wireless work,” he said. “The infrastructure's key. Again, it's that unknown — we may be working with 5G today or some type of system that changes by the time we deliver the building, and we need the flexibility to react.”
Hipchen said ultimately, there will always be a demand for increased capacity. To that end, developers and building owners should prepare their IT infrastructure by including optic fiber, which is necessary to enable 5G technology.
“Having that flexibility, portability, both now and in the foreseeable future, because it's clear that we really don't know what the future is, but we can try to be as best as possible prepared for it,” Hipchen said.
Gilson said including wireless infrastructure in the construction budget is significantly less expensive than going back in later to open up ceilings and walls.
“Going back after the fact to redo and make dramatic changes to a structured cabling system is extraordinarily expensive, so the wireless really does drive a lot of ROI [return on investment], though it is very difficult to calculate it precisely,” Gilson said.
Traditionally, the funding to pay for the installation of wireless infrastructure comes directly out of the building owner or enterprise’s capital budgets and can act as a serious roadblock.
“Not everybody can necessarily take that out of the capital budget right away,” Gilson said.
With the cost in mind, there has been a recent shift where some organizations are offering building owners and tenants a capital lease to install the technology. Instead of those funds coming out of a capital budget, the cost is stretched out over a lease period and becomes part of the operational budget.
“What's even newer than that is, there's a handful, certainly not the whole community, but a handful of wireless third-party operators that are starting to offer wireless and infrastructure as a service,” Gilson said. “So from the building owner's perspective, it looks like the same thing. It's managed service that has the financial aspects of capital.”
In some cases, building owners may be able to persuade mobile network carriers to pay for technology upgrades, either in part or in full, but that is becoming less likely than it was a few years ago.
“If you can, that's great, but I think it's important to go into meeting your requirements with the assumption that the carriers are not going to pay,” Gilson said.