Softbank Corp’s 5G wireless service in Japan is living up to the hype in at least one respect: The Internet speeds are blazingly fast even by the standards of one of the most-connected countries in the world.
The carrier’s month-old 5G network topped out at 1.1 gigabits per second for downloads and about 30 megabits for uploads in tests carried out by Bloomberg News in Tokyo.
Speeds of this kind, far surpassing typical wired broadband connections, have previously been possible only by pushing a fiber optic cable directly into a user’s home.
However, there are significant pieces still missing and preventing mass adoption. Coverage is severely limited, there is little in the way of appealing content to capitalize on all that extra bandwidth and mobile data plans have yet to be revised to account for the much-increased consumption that 5G portends.
Softbank and local rivals KDDI Corp and NTT Docomo Inc all launched their 5G offerings late last month in a handful of metropolitan areas around the country, while newcomer Rakuten Inc has targeted June for its launch.
The Japanese telecoms, and their counterparts in South Korea and China, have pressed ahead with deployment of next-generation networks despite global COVID-19 woes, but 5G services touting high speeds and low latency are still out of reach for the majority of people eager for bandwidth to stream movies and needing to telework as they shelter at home.
The coverage in Japan is still so thin that the three major carriers have all resorted to posting the addresses of the exact locations where early adopters can access 5G.
In Bloomberg’s own limited test of Softbank’s network, the best reception was inside its store in Tokyo’s Ginza shopping district, but the signal quickly dropped off to nothing about a block away.
While Softbank plans to expand the service to larger pockets of Tokyo and other big cities later this year, the company does not expect to reach 90 percent of the population until March 2022.
Part of the challenge is that 5G networks need to be denser than their predecessors. Their signals typically use higher-frequency spectrums — starting at 3.6 gigahertz in Japan — which allow for faster communication speeds at the expense of reach.
Building out a 5G network at such frequencies necessitates more networking infrastructure to achieve coverage.
That is more of an issue for sprawling places such as the US than densely populated Japan, Redex Holdings analyst Kirk Boodry said.
“The coverage is still going to be spotty for a while and since all of the operators upgraded to 5G at the same time, there is no advantage,” Boodry said. “The primary selling point is just speed.”
Even when it can be had, it is not yet clear what that much bandwidth is good for.
The handful of augmented and virtual-reality experiences preinstalled on Softbank’s 5G smartphones work just as well with a basic Wi-Fi connection. The content leans heavily on teenage idols, letting users view performances by pop bands such as AKB48 from multiple angles, or in 3D.
There is also an app for streaming basketball games of Japan’s domestic professional league, although all of the matches have been canceled because of the coronavirus outbreak.
Softbank is also launching a cloud gaming service in collaboration with Nvidia Corp.
The carrier is offering its 5G service as an add-on to existing plans for ￥1,000 (US$9.38) per month. Subscribers signing up by Aug. 31 are to get it for free for two years, but all usage is counted toward the customer’s data cap, which could mean burning through the 50 gigabyte monthly allowance in mere minutes.
The 5G operators are counting on the faster speeds to nudge users to pay more for bigger data plans, but history suggests otherwise.
Softbank’s average revenue per user — ￥4,440 in the first quarter — has grown less than 10 percent since the company introduced the iPhone 3G more than a decade ago and 5G is not likely to bring much revenue upside either, Boodry said.
“Carriers have basically been trading capacity for revenue,” he said. “Operators thought that with 3G, they could offer a lot of services and charge more, but there wasn’t all that much price elasticity.”
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