5G – Busting the Gimmicks!

Let’s face it! We have come a long way from a 3000-rupee Nokia phone getting us through comfortably for 10 years to a 30,000-rupee phone getting obsolete in just 10-months! With Original Equipment Manufacturers (‘OEM’s like Xiaomi, OnePlus, Samsung, etc.) launching phones almost every month and processors getting upgraded every 6 months, the pace of the smartphone market is incomprehensible.

Just a month before the worldwide pandemic begun, Qualcomm launched its next generation of flagship mobile processors – the Snapdragon 865 (‘SD 865’). This launch is a glaring example of crony capitalism in a market dominated by a communist country. Today, let’s find out how!

• Table of Contents

  First things first, let’s understand what is 5G all about

Nearly after a decade of the launch of 4G LTE, 5G is here and has seen some commercialization in 2020, mostly in the US. As a broader term, 5G, the next cellular communication technology is meant to revolutionize the upload and download speeds over 4G by almost 10x. Now you’d say, my Wi-Fi does exactly that. Why should I bother about 5G? So then, imagine yourself having passwords of all the Wi-Fi networks in the whole city working at speeds up to 1 GBPS! That’s 5G!

This technology, however, is not just meant for you to download PUBG in a minute. Broadly, 5G will be the foundation for upcoming technologies like VR, IoT, Autonomous driving, and other such stuff we cannot even imagine today!

• The technology

Achieving such speeds on scale this big isn’t as easy as setting up Wi-Fi hotspots everywhere. It’s a combination of technologies like Millimetre Wave (‘mmWave’), Small Cell, Massive MIMO, Beamforming and Full Duplex.

If we have a look at the radio frequency spectrum, most of our radio-enabled devices like smartphones, laptops, TV’s, radios (e.g. 93.5 Red FM works on 93.5 MHz; 1,000,000 MHz = 1 GHz), drones, etc. use the bandwidth below 6 GHz and so do the technologies like 4G and Wi-Fi. As more devices come online, more and more data gets transmitted through the same frequency band, eventually crowding the whole of the spectrum.

The primary technology of 5G, called the Millimetre Waves is designed to use higher frequency spectrum – 24 GHz to 300 GHz – for data transmission. However as per the general rule, higher the frequency of any wave, the lesser its range. These waves enable super-fast speeds, but get blocked by other obstacles like walls, trees, and even your hands. This problem is solved by other technologies like small cells and beamforming.

• Beware of what you’re offered in the name of 5G (Pun intended, AT&T!)

Technically, 5G spectrum bands can be classified into three categories –

1. Low-band spectrum (Sub-1GHz) –
   This low-band spectrum provides consumers a very wide coverage area with good building penetration, but peak data speeds top out at 100 Mbps. As a result, this spectrum, although not 5G in substance, is set to be reclaimed primarily for 5G in coming years on account of ongoing sunset activities in 3G.
2. Mid-band spectrum (Sub-6GHz) –
   This spectrum between 1GHz and 6GHz provides faster throughput and lower latency than the low-band spectrum. As Digital Trends notes, mid-band transmissions are less suitable for a good in-building penetration, but peak speeds can reach as high as 1 Gbps. However, in practice, this category offers a modest 20-25% speed increases over 4G only.
   With no technical definition for what is classified as 5G, telcos often tend to label anything as 5G, if they think it will help sales. The biggest abuser is AT&T, which one day just decided to label its entire 4G LTE network as “5Ge,” with no technical upgrades made.
3. High-band spectrum or ‘mmWave’ (24 GHz and upwards) –
   In substance, this is essentially ‘true’ 5G, which offers those dramatic speed increases. When telcos talk about how 5G will revolutionize the way you watch cat videos or whatever, they’re talking about mmWave.
   

Snapdragon 865 – A new era of mandatory 5G

• What Qualcomm has done?

Today, almost everyone carries a Qualcomm Snapdragon chip in their pockets! Unless, of course, if you’re an iPhone user. Every Snapdragon System-On-a-Chip (‘SOC’) till date has had a 2G/3G/4G modem built into the chip which gives the chip its cellular networking capabilities. As an example, the 4G LTE modem integrated into last year’s Snapdragon 855 is called the X24. However, this year, Qualcomm was so desperate to make 5G a thing, that it decided not to include a modem altogether in the main SOC and to sell a 5G modem separately – named the Snapdragon X55 – along with the Snapdragon 865. This X55 modem, in addition to regular 2G/3G/4G, supports both kinds of 5G, Sub-6Hz as well as mmWave bands.

Okay, Qualcomm did nothing wrong until now. But here comes the blunder – to ensure combined selling of both the chips, they have ensured that the SD 865 supports no other modem than X55. This essentially means two things – OEMs have to compulsorily buy two chips from Qualcomm – SD 865 + X55 and that every SD 865 powered phone is 5G capable, whether or not the telecom operator in your region supports 5G.

• 5G before SD 865

Like I said, every chip until now had an integrated modem built into it, which had no 5G support. This meant, to implement 5G into a phone, OEMs had to add an additional 5G supported modem, which, in most cases was last year’s Snapdragon X50. 

However, the biggest difference between then and now was flexibility. 5G phones were much simpler. If 4G Samsung wants to sell a 4G only version of Galaxy S10, it will cost you $999 and if someone wants to buy a 5G phone, he had to pay a premium of $300. That’s fair, because for 5G demand of barely 1% of the mass, why should the other 99% pay a higher price?

• What it means for Qualcomm?

Needless to say, for Qualcomm, this is an excellent decision financially, since they are probably going to make a ton of money on the “SD 865 + X55 combo”, since every phone manufacturer using the 865 chip has to mandatorily purchase the X55 modem separately from Qualcomm.

In fact, this launch doesn’t just ensure selling twice the number of chips for Qualcomm. Theoretically, the X55 modem supports both, Sub-6GHz as well as mmWave 5G, but actually implementing a mmwave 5G (or ‘true’ 5G, as I’d like to call) is a technical nightmare! The mmWave penetration is so poor, that just like trees and walls, it can’t get through your hands either. This means that if you hold your phone near its antennae, it can hamper the signal. 

Qualcomm’s solution to this problem – placing multiple mmWave antennas around the phone. After all, you’ll very rarely cover both sides and the top of your phone at once. And who will supply all these extra antennas? You guessed it right! Qualcomm.

To sum up, from a single chip per phone, Qualcomm’s now guaranteed with 1 chip + 1 radio modem + 3-4 mmWave antennas per 5G smartphone.

• What it means for the consumers?

A year ago, OnePlus CEO Pete Lau told The Verge that 5G would raise the price of phones by $200 to $300. And now, he did just that. Just a week back, he launched the OnePlus 8 Pro at a starting price of $899 as against 2019’s OnePlus 7 Pro, which was launched at $669. And brace yourselves, this $230 bump-up is just OnePlus – the brand known to offer the best price to spec ratio over the years.

However, increased price isn’t the only cost consumers need to pay here. We can let Qualcomm explain the disadvantages of a separate modem in its own words, if we go back to a 2012 press release, when the company launched a single-chip solution for 4G LTE, the Snapdragon S4. “Typically, the more chips that are involved in building a device, the more challenging it is to conserve battery life while maintaining performance,” Qualcomm wrote then. “Consolidation means good things for your battery.” 

In SD 865, now, with no onboard modem at all, even in 4G-only mode you’ll be using more power by needing to light up that 5G enabled X55 modem.

5G and Indian scenario

Don’t get me wrong here. I’m not trying to imply that 5G phones are all bad and Qualcomm is just taking advantage of its position or something. What I’m trying to convey here is that their timing is not right. In a world where 5G doesn’t even exist in most countries, and in an embryonic stage in a few countries, why rush every phone with 5G, just because you can. In fact, most SD 865 enabled phones purchased today will be rendered obsolete when 5G will actually arrive.

In this context, let’s have a look at 5G and the Indian scenario.

• Struggling Telcos & Spectrum auction

The Indian telecom industry hasn’t been the best space to do business. Since its privatisation in the late 90’s, it has seen it all, from one of the highest spectrum fees, frequent policy flip-flops, scams, penalties, and highest level of tax litigation.

More recently, disruption brought in by Jio in an already struggling market led to the collapse of two telecom giants, namely, R-Com and Aircel. To take on uber-cheap services offered by Jio, Vodafone announced its merger with Idea, but has reported losses every quarter since.

To further add fuel to the fire, recent AGR ruling by the Supreme Court has slapped payment of past AGR worth ₹82,300 Crores by Indian telcos. In response, Vodafone Idea has decided to cease operations, if some relief is not given to them. With only Jio and Airtel left, this may result into a duopoly in the market, not very good for users.

In this scenario, even if a 5G airwaves spectrum is held, who will be left to bid? With reserve prices of almost $70 Billion for 5G spectrum, Bharti Airtel has conveyed its unwillingness to participate in the auction, while Vodafone-Idea is struggling for its survival. This narrows down the list of prospective bidders to only one! Jio.

• The timeline

Back to my original point, the bad timing by Qualcomm, let’s have a look at expected timeline of arrival of 5G in India. The Department of Telecommunication (DoT) had pushed the original timeline of first round of auctions to August 2020 from late 2019 on account of – you-guessed-it-right – bad financial health of telcos. Now, COVID-19 lockdown has further postponed it to Oct-Dec Quarter of 2020.

However, DoT cannot delay the sale of spectrum to later than 2020 because some of the 4G spectrum licenses held by Airtel and Vodafone-Idea are set to expire in a few service areas in 2021.

All in all, this translates to earliest possible 5G rollout in India in late 2022, given the time needed to set up massive 5G infrastructure. In fact, as per a statement given by Rajan Mathews, the DG of Cellular Operators Association of India to the Economic Times, 5G rollout in India may be pushed by 5 years, from an operator’s perspective.

What Indian smartphone players have done so far – When you can’t change the girl, change the girl!

By now you have read this a thousand times – With SD 865 on board, OEMs cannot do much about 5G capabilities, regardless of the fact that they’re not needed until the next two years.

Prior to the lockdown, only two SD 865 powered smartphones have been launched so far. Realme X50 Pro and iQoo 3, both calling themselves – ‘India’s first 5G phone’. However, the interesting thing with the iQoo 3 is that it’s first Snapdragon 865-powered phone to come in both ‘4G-only’ and 5G models. In my opinion, they adopted an interesting marketing strategy here.

I’ll explain – ‘Rosesh, tum 5G phone bano…’ Just kidding :p

A deep dive into why 5G phones get so expensive reveals that apart from the extra modems and antennas, OEMs also need to certify a phone for particular 5G mmWave bands in the market they want to sell. 

While iQoo knows that 5G capabilities are useless in India right now, it has not eliminated the 5G variant; it has rather used it to stay true to ‘India’s first 5G phone’ tagline, which is a good catch phrase for entire iQoo 3 line-up and priced the 5G variant at ₹45,000 to skim the cream from someone crazy enough to buy a 5G phone. Simultaneously, for its 4G only variant of iQoo 3 line-up, it has saved on these certification costs, and passed on the benefit to end consumers in the form an aggressively priced SD 865 @ ₹37,000 (These are launch prices, before the April 2020 GST price hike).

Final thoughts – The way forward

In the wake of this 5G confusion, what is the way out for us now? Should I buy a 5G phone or not? What if my smartphone is due for an upgrade this year?

Assuming that most smartphones do not last for more than 2 years, my suggestion would be to not pay a premium for a feature that will be useful when the phone starts dying out. If you’re phone is due for an upgrade, bingo! Last year’s flagships with Snapdragon 855/855+ are up for grabs, at a reasonable price, and will last you most easily till the time 5G becomes a reality in India. I hope that happens soon.

As a silver lining on the cloud, it seems that Qualcomm has realised its mistake, and has launched Snapdragon 765 as its mid-range offering, with an integrated 5G modem (named Snapdragon X52). Although SD 765 supports only the Sub-6GHz 5G, it is sufficient for most users.

Going forward, I hope next year’s flagship processor makes a lot more sense like SD 765. Till then, stay at home, stay safe and away from SD 865.

Vatsal Doshi

A Chartered Accountant by profession, who didn’t let his passion for tech die!