On October 3, I had the privilege of participating in a thought-provoking panel at DTX London 2024. The discussion revolved around one of the most pressing questions in the telecommunications industry: 5G versus Wi-Fi: Which technology will drive the future of connectivity?
As a 5G/mobility analyst at IDC in Europe, I was invited to join Paul Ridge, Director Consultant at 4C Strategies, and Dan Jones, Technologist at Hamina Wireless, to explore the opportunities, challenges, and future landscape of these two critical technologies.
The European Telecom Market: Facing Stagnation and Seeking New Growth
Before diving into the core debate, it’s essential to acknowledge the broader telecom market dynamics. The European telecom sector faces an array of challenges, including stagnating revenues, intensified competition from both traditional telcos and OTT players, and strict regulatory pressures.
Working closely with our telco colleagues around the world, IDC covers these issues across a range of research programs. As shown in IDC’s European 5G program (European 5G and Internet of Things Monetization and Adoption Strategies), price wars have squeezed margins, leaving telcos struggling to raise prices while shouldering the costs of 5G and fiber rollouts.
Telecom operators are pivoting toward service diversification, investing heavily in digital services, and shifting their strategies to seek new revenue streams beyond connectivity. This is where the conversation around 5G and Wi-Fi becomes especially significant.
5G: A Game-Changer for Telecoms
5G, particularly standalone (SA) networks, offers a lifeline for operators seeking to overcome revenue stagnation and expand into new business models. During the panel, I emphasized five key aspects of 5G SA that make it a cornerstone of future connectivity.
- Clean-Slate Architecture: 5G SA doesn’t rely on legacy technologies. This enables optimized network design, enhanced innovation, and greater flexibility.
- Cloud-Native Core: With a cloud-native foundation, operators can scale services dynamically, implement tailored network slices, and respond in real time to evolving user needs.
- Mobile Private Networks (MPNs): These enable businesses to deploy their own secure, private 5G networks that offer enhanced security, control, and reliability. MPNs also enable enterprises to run mission-critical applications independently from public networks.
- Network Slicing: This enables the creation of virtual, customized networks that cater to specific application requirements, such as ultra-reliable connectivity for autonomous vehicles or low-latency service for Smart Cities.
- Support for Key Traffic Types: The flexibility of 5G SA accommodates enhanced mobile broadband (eMBB), massive machine-type communications (mMTC), and ultra-reliable low-latency communication (URLLC), optimizing the network for a wide variety of use cases.
5G’s potential is immense — but its deployment in Europe has been slower than anticipated. To date, just 18 operators have launched 5G SA networks in Western Europe, and only a handful have commercialized network slicing capabilities.
Wi-Fi: The Complementary Force
5G offers compelling advantages, but Wi-Fi continues to be a dominant force, especially in residential and enterprise environments. The ubiquity of Wi-Fi, its ease of deployment, and lower cost make it an attractive option for fixed-location connectivity. However, Wi-Fi has limitations in mobility, security, and reliability — which is where 5G shines.
During the panel, we discussed how Wi-Fi remains ideal for specific customer requirements, such as indoor environments or smaller businesses with less demanding connectivity requirements. However, when mobility, low latency, and security are paramount, 5G emerges as the superior choice.
When 5G Outshines Wi-Fi
The results of IDC’s European 5G/IoT Survey 2024 highlighted that organizations are increasingly demanding mobile connectivity that extends beyond fixed locations. Nearly 70% of respondents said yes when asked, “Does your organization need mobile connectivity that extends beyond a fixed campus or location for anything other than personal devices?”
Businesses are looking for mobile solutions that enable them to monitor supply chains, manage remote operations, and ensure connectivity in dynamic environments.
Security remains a top concern, with 33% of survey respondents identifying enhanced security for data transmission and communication as their primary challenge. This has led to an increasing preference for keeping data in-house: Almost 49% of businesses cited trust and security concerns as a key reason for this choice.
This is where 5G MPNs come into play, offering businesses the security and control they need to manage sensitive data while generating new revenue streams through advanced digital services. According to IDC’s forecasts, the European MPN managed services market is expected to expand to a value of $818 million in 2028, with the MPN professional services market (including integration and consulting) projected to reach $615 million the same year.
In industries where deploying MPNs may not be feasible — such as public transportation or emergency services — 5G SA network slicing offers a flexible, secure alternative. With 5G network slicing, operators can create customized virtual networks, guaranteeing service-level agreements (SLAs) and ensuring reliable service for applications like connected ambulances or public transport vehicles. More than one-third (36%) of respondents in IDC’s European Telco Survey 2024 identified network slicing as a key driver of implementing 5G SA.
The reasons why businesses might choose 5G over Wi-Fi in certain campus or short-range scenarios include:
- Security and End-to-End Control: 5G operates on licensed spectrum, offering higher levels of security compared to Wi-Fi, which uses unlicensed spectrum and is more vulnerable to interference and attacks. 5G networks enable operators to control and secure every part of the network from end to end, making it ideal for industries in which data protection is crucial.
- Mobility: When mobility is important — such as in scenarios involving moving machines or vehicles — 5G excels due to its ability to maintain seamless connections during handovers between cells. Wi-Fi struggles with handover scenarios, leading to potential service drops when devices move across different access points. This makes 5G the better option for uninterrupted service in mobile environments.
- Reliability in Aggressive Radio Environments: In radio-aggressive environments like factories, with machines and boxes creating interference, 5G’s micro-diversity and advanced signal handling capabilities make it more reliable than Wi-Fi. 5G’s ability to handle dark zones (areas with poor signal coverage) through reconfiguration also ensures consistent performance. Wi-Fi, however, may struggle in these areas.
- Ability to Offer SLAs: 5G allows network operators to guarantee SLAs, providing commitments on performance, uptime, and latency. Wi-Fi cannot consistently offer these assurances. This is especially important in industrial applications requiring high reliability and low latency. 5G can provide predictable and measurable outcomes.
- Control Over Different Parts of the Network: In 5G networks, operators have full control over network slices, traffic, and reconfigurations. This is essential in environments like manufacturing, where specific areas may need different levels of service or control. Customization at this level is difficult to achieve with Wi-Fi.
Blending 5G and Wi-Fi: The Future of Connectivity
Ultimately, the future of networking lies in the integration of 5G and Wi-Fi technologies. Each serves a distinct role in addressing the varying demands of consumers and businesses. Smartphones, for example, effortlessly switch between Wi-Fi and 5G depending on network quality, and this hybrid approach will likely become the norm across multiple industries.
Looking ahead, the combination of 5G’s robustness and Wi-Fi’s accessibility will enable a more flexible, efficient, and connected future. Telecom operators will continue leveraging both technologies to build the next generation of networks that deliver high-speed, secure, and reliable connectivity for all.
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