5G and its Economic Aspects

In this thesis, we study the economic aspects of the next generation of mobile networks, the fifth generation (5G). Mobile networking is an interesting topic, as telecommunication is an indispensable part of the infrastructure in our society, both today and in the future. 5G is needed as the existing 4G networks do not have enough capacity to handle the future amounts of mobile data traffic. It is important to understand the economic aspects of 5G, to ensure that the next generation of mobile networks will be economically sustainable. Although 5G still is a few years away from being commercially deployed, now is a good time to start addressing certain economic aspects. For instance, it is wise to begin the considerations of the cost aspect of the future networks early, while the enabling technologies are still under research and development, and before 5G is standardized. This is especially important for the mobile network operators, who provide the infrastructure. Similarly, the business potential of 5G is of interest for all actors that intend to generate revenues related to 5G. Some examples of these actors are service providers, content providers, companies selling telecommunication equipment (hardware), and again, the mobile network operators. The three overall objectives of this thesis are to explain how 5G is currently defined, identify the most important economic aspects of 5G, and formulate an optimization planning problem for a mobile network operator operating in the 5G context, by using portfolio theory. Our main intention is to provide an overview that can be used as a starting point for further studies of 5G economics. First, using existing literature about 5G as a starting point, we explore how 5G currently is defined, and how the recent literature address its economic and business related aspects. 5G is not standardized yet, but the literature shows that most actors and stakeholders agree on both the use cases and the actual requirements for 5G. We see that until now, most of the 5G literature is concerned with proposing technologies to be included in 5G, so that 5G can meet the requirements. Heterogeneous networks, device-to-device communication, software-defined networking, network function virtualization, cognitive radio, transmission over the millimeter frequency bands, advanced multiple-input multiple-output techniques and software-defined radios are examples of important technologies that are likely to characterize 5G. An important finding is that there has not been conducted much dedicated research on the economic aspects of 5G yet. However, there are a few articles dedicated to this field, which are studying the profitability of proposed new technologies: device-to-device communication and the 5G heterogeneous networks. Certain economic aspects are also mentioned in technology-oriented publications, such as the increasing expenses the mobile network operators face, and the need for these costs to be at a reasonable level in the future. Cloud concepts with software-based implementations and virtualization technologies are described as promising solutions for the cost issues, along with lowered cell costs