Making sense of 5G and Wi-Fi in the enterprise

By Jeff Lipton, VP of Strategy and Corporate Development
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At a high level, the major trend in the market is connecting “things” in an enterprise, industrial, and consumer settings, and deriving useful context and analytics from these things. This trend will drive the next phase of industry growth. The underlying technologies that enable this trend include 5G, Wi-Fi (especially 802.11ax, also known as Wi-Fi 6), edge computing, AI-based analytics, and new security frameworks. Customers will combine these elements to best serve specific use cases. No one approach or technology fits all requirements.

So, what is 5G, and how is it different from current 4G (LTE) cellular technology? LTE and prior cellular standards, such as 3G, mainly offered higher throughput, better coverage, and improved economics for carriers, compared to their preceding standards. 5G continues on this path of improving performance and economics, and also adds new capabilities, such as:

  • High connection density, or the ability to connect more devices per square mile. This capability is especially important as the number of connected devices grows exponentially.
  • Network slicing, which enables carriers to create customized virtual network overlays under one nationwide, physical network. With slicing, they can tune each of these virtual networks to serve business cases that require specific network characteristics. Enterprise networks have had this capability for decades, using a diverse set of techniques that includes VLANs, subnets, and VRFs.
  • Multi-access Edge Compute (MEC) to handle both service provider and enterprise computing workloads at the edge of mobile networks.
  • Architectural changes. For example, the 5G standard allows the “bonding” of Wi-Fi and 5G radio traffic between a mobile device and the 5G cellular core.
  • The ability to provide high bandwidth Fixed Wireless Access (FWA) connectivity services over high-frequency (millimeter-wave) spectrum for consumers and small businesses.

The reason carriers and their suppliers are so excited about 5G is because they view it as an enabler to enter new markets and create new revenue streams. These include consumer connectivity (using FWA) and device-centric use cases, such as industrial IoT applications. They also will use 5G to target enterprise connectivity. These new revenue streams would be timely, as carriers are trying to offset strong business headwinds, such as declining revenue per user in their core cellular businesses, a dwindling landline user base, and increasing competition from non-traditional service providers, such as Amazon and Google. These trends have resulted in rising corporate debt loads and poor stock performance. The carriers need to act.

We looked closely at 5G and compared it to Wi-Fi and other wireless access technologies to determine how each best serves our customers. 5G and Wi-Fi 6 represent different approaches to wireless connectivity. Yet both are based on several of the same technological building blocks (e.g., OFDM, MIMO, and higher-order modulation). 5G and Wi-Fi 6 improve upon the performance and economics of LTE and, respectively. Like all cellular technologies, 5G fits when the user requires macro coverage and mobility and can afford to pay the additional cost for these capabilities. Wi-Fi 6 has excellent in-building mobility but does not roam well at high speeds. Importantly, Wi-Fi 6 is at least on par with 5G in terms of throughput, latency, spectral efficiency, and connection density.

One of the most important differences between 5G and Wi-Fi is economics. To succeed in the enterprise, carriers would need to offer 5G service at a competitive cost to Wi-Fi. Consider that macro cellular technology does not adequately penetrate buildings to provide enterprise-grade service. To serve the enterprise market with 5G, some carriers are proposing that customers deploy (and pay for) DAS (Distributed Antenna Systems) or small cells to extend macro coverage indoors. DAS and small cell systems are substantially more expensive than Wi-Fi systems from both per-square-foot and lifecycle perspectives, largely because of the economic overhead associated with IP licensing and macro-level mobility (the ability to hand-off calls).

5G cellular networks and DAS systems operate over licensed spectrum, which is analogous to a private highway. Service providers paid billions of dollars for this spectrum, and this expense needs to be monetized and passed through to end users. Interestingly, because of the cost advantage associated with Wi-Fi, and now that Wi-Fi is an accepted radio front-end in the 5G standard that can be bonded to the cellular core, several carriers are considering deploying Wi-Fi networks as an economical, high-performance alternative to DAS systems and small cells.

The cost to implement 5G-based access in the enterprise doesn’t stop with the cost of the network itself. Cellular service requires all laptops, printers, AppleTVs, and other connected devices to contain 5G-compatible cellular modems. These modems cost tens of dollars per device wholesale, and typically more than $100 to an end user. Every device also needs to be included in a service contract. Since the vast majority of these devices do not contain cellular modems, they would need to be upgraded or outfitted with external dongles. Though carriers and their network equipment providers propose 5G DAS and small cell systems as an alternative to Wi-Fi, we doubt many enterprise customers will be willing to pay this additional cost and replace most of their equipment, for an unclear benefit.

Another important consideration for customers is network reliability. Both Wi-Fi 6 and 5G are extremely reliable when deployed correctly. Although 5G is deployed using licensed spectrum, which is less subject to interference than unlicensed spectrum, operating on licensed spectrum doesn’t always translate to higher levels of reliability. At Aruba, we’ve achieved extremely high levels of reliability and performance with our Wi-Fi systems in demanding environments, such as large, sophisticated manufacturing plants. Wi-Fi 6 improves reliability even further. Still, some customers may choose to segment a specific private network on either licensed spectrum, or a different band of unlicensed spectrum (for example, CBRS). This could make sense in certain industrial and energy industry use cases, but not for most customers.

There is a misperception among some people that cellular technologies are more secure than Wi-Fi. LTE is relatively secure, but not perfect. According to researchers at Purdue and the University of Iowa, LTE is vulnerable to a range of attacks, including data interception and device tracking. 5G improves upon LTE security with multiple authentication methods and better key management. At the same time, Wi-Fi security continues to advance. Of course, Wi-Fi implementations that do not follow best practices, such as those without even basic password protection, are not optimal. But those configured with proper access controls and passwords are highly secure. With new standards — specifically, WPA3 and Enhanced Open — Wi-Fi network security is even stronger. It’s also important to consider that enterprises have made enormous investments in security products, such as malware detection, SIEMs, and DLP compliance solutions. These products require network taps to function. With cellular networks, including 5G with network slicing, enterprises lose most visibility into traffic flows, and also the ability to correlate activity across the enterprise network. With macro LTE and 5G, from a security perspective, you get what you get.

The bottom line is that any Wi-Fi versus 5G narrative misses the point. Wi-Fi and cellular (5G) are both evolving to better serve end users, and both markets will grow to serve the macro trend of connecting and analyzing devices. Wi-Fi will continue to prove its value as a reliable, secure, and cost-effective wireless access technology for most enterprise applications, as it does today. And we believe the Wi-Fi market will expand with 5G, as carriers begin to use Wi-Fi as an economical in-building radio technology. 5G will serve applications requiring mobility and macro range, and for certain industrial use cases where customers prefer physical network segmentation.