Five years after the fifth generation of cellular network technology (5G) began rolling out worldwide, the telecom industry faces a major strategic challenge. The first phase quickly expanded coverage by connecting 5G radios to existing 4G LTE networks, known as 5G Non-Standalone (NSA). However, moving to “true” 5G with a cloud-based Standalone (SA) core has faced serious obstacles.
5G was once expected to be a game-changer, but now many communications service providers (CSPs) see it as a costly upgrade with uncertain benefits. As time goes on, 5G SA risks becoming a “silent generation,” used more for behind-the-scenes improvements than for delivering the big changes that were promised.
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The biggest obstacle to rolling out 5G-SA widely is a simple lack of market demand, especially in the consumer market. In the past, each new mobile generation brought new uses: 3G made the mobile web possible, and 4G enabled video streaming. But in its first five years, 5G has struggled to offer a must-have application.
Most smartphone users do not notice key SA features, such as ultra-low latency or support for many connected devices. Research shows that people care more about reliability and value than about whether their phone uses SA or NSA.
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Because of this lack of interest, companies have pulled back from charging extra for 5G. In the U.K., British Telecom first offered 5G-SA as a premium service, available only on select high-end handsets, with monthly plans costing more than twice the average revenue per user (ARPU). But since few people signed up, they changed course and included SA features in standard plans at no extra cost.
In the U.S., AT&T finished rolling out 5G-SA nationwide in late 2025, but mobile service revenues grew by only 3.4%, which was just above inflation. This “value perception gap” shows that even when the technology is available, it does not lead to a big increase in consumer spending.
As CSPs consider the high costs of overhauling their core networks, a new factor has come up: the upcoming standardization of 6G. With 6G expected around 2030, its arrival is making companies hesitant to invest more in 5G. Many operators do not want to spend billions on 5G-SA systems that might have to be replaced to meet the new AI and sensing needs of 6G.
This has led to the “odd generation” theory, which suggests that 5G might be a transitional technology like 3G—important technically but less successful commercially than the next generation. Some operators are choosing to get the most out of their current 5G-NSA systems and plan to move straight to 6G-ready cores in the late 2020s.
“Capex is past the peak, but it is not falling off a cliff,” said Stefan Pongratz, VP of RAN and Telecom Capex research at Dell’Oro Group. “Still, there will be room to improve capital intensity ratios as operators are reallocating away from blanket coverage builds and toward capacity, quality, automation, and energy performance.”
In many countries, the rollout of 5G-SA is now shaped more by government policy than by market demand, leading to regional differences. China is a global outlier, having built
over 4.8 million base stations as part of its national industrial policy. The Chinese government sees 5G-SA as key national infrastructure for the “low-altitude economy” and smart manufacturing, prioritizing long-term digital growth over short-term profits for operators.
In contrast, Europe has become a “regulatory quagmire” where SA rollout is slowed by market fragmentation and the high costs of removing equipment from vendors like Huawei, as required by government rules.
Regional 5G-SA status and strategic drivers
As spending on traditional radio access networks (RAN) slows down, infrastructure vendors are changing their strategies to make the SA upgrade more appealing. Ericsson is
focusing on “Programmable Networks,” opening network APIs to developers to create new revenue streams.
Nokia is
focusing more on the enterprise market with its “Core Engineered Systems” built for cloud-native environments. Last year’s
investment from Nvidia focuses more on creating a true cloud and AI network, readying for 6G. At the same time, Samsung is promoting virtualized RAN (vRAN) as a flexible, 6G-ready alternative to traditional hardware.
Huawei, which is absent from several Western markets, is promoting a “5.5G” or 5G-Advanced story, presenting it as a new phase of industrial digitalization. This move to 5G-Advanced (3GPP Releases 18 and 19) introduces AI integration and enhanced support for extended reality (XR).
However, these features require a 5G-SA core, creating a “chicken and egg” problem. Operators want the advanced features but are hesitant to pay for the core network upgrades needed to support them.
The business case for 5G-SA depends heavily on network slicing, which enables operators to split a single physical network into virtual “slices” with guaranteed performance. While this is promising for B2B applications such as industrial robotics and emergency services, the consumer market is still constrained by regulations.
In Europe,
strict net neutrality rules make it hard to charge extra for faster “express lanes” for things like high-end gaming or video streaming. These rules set the expectation that a basic connection should work for all apps, making it tough for operators to turn 5G into something more than a standard feature. However, the rules have exceptions for critical services such as healthcare and utilities.
As a result, network slicing is mostly in use in small B2B pilot projects, which account for only a small share of total network traffic. Without a way to make money from the consumer slice, there is little financial reason to move to SA on a large scale right now.
The one clear commercial success of the 5G era has been Fixed Wireless Access (FWA),
especially in North America. However, FWA’s success actually supports the idea that “good enough” connectivity is more important to users than having the latest technology.
FWA has done well not because it outperforms fiber, but because it offers good enough performance at a better price, especially in sparse population areas, where deploying fiber is costly.
AT&T is offering FWA in a significant way via its 5G network. The company launched its 5G-powered
Internet Air FWA product in August 2023 and has seen significant customer growth since.
While FWA uses 5G network capacity, most users do not care whether it is SA or NSA as long as their streaming video works without buffering.
Right now, the global rollout of 5G-SA shows uneven progress and lower expectations. While there are real engineering benefits, such as better energy efficiency and higher connection density, they have not yet matched what most consumers want. Operators are making practical choices by delaying expensive upgrades and focusing on getting the most out of current assets and proven revenue sources, such as FWA.
Unless many strong enterprise users emerge soon, 5G-SA may stay in the background as the industry moves on to 6G, serving as a warning for future technology rollouts.
