The End of Gs

The evolution of cellular communications has been chronicled by the development and deployment of successive generations (“G”s) of wireless technologies. The transition to a new wireless technology is a very costly and often regulatory intensive process, and so there is a natural opposition to such transitions by incumbent operators who generally wish to amortize their investments in their current networks over as long a period as possible. This paper will demonstrate that technical innovation was only a secondary factor in the impetus that eventually moved the incumbent operators to deploy a new generation of technology. The paper will describe the unique combination of regulation, standards, and competitive environment that led to each generational shift; beginning with European industrial policy towards an ever closer Union resulting in GSM (2G); US technology neutrality policy, ITU War I and the competitive threat from Qualcomm’s CDMA (3G); and finally the competitive threat and ITU War II from Intel’s OFDMA (4G). The paper will show that as a result of the victory in the market of the European version of OFDMA (LTE) the European standards community of 3GPP and ETSI, and the ITU have established hegemony for cellular technology standards. This dramatically raised an already high barrier to entry for a new competing technology to be anointed as the next generation (5G). This scenario will be contrasted to the unlicensed, wireless LAN (WiFi) market, where although the IEEE has established similar hegemony, the much lower capital investment, and much more diverse ecosystem, results in a lower barrier to entry for new generations of wireless LAN technologies (802.11a,b,g,n,ac,ad, etc.). Most importantly, because of this the paper posits that no competitive force will be able to emerge to force the incumbent operators to shift to a new cellular technology. And therefore absent strong arm industrial policy (unlikely except for one potential country) there may not be an official 5G for decades, resulting in intramural competition between operators on other factors