The Internet of Things (IoT) will not be a viable source of revenue for telecommunications companies, according to Andrew Entwistle, partner at independent research firm New Street Research, who also argued that 5G and IoT are not intrinsically connected, that 5G is not a replacement for 4G, that 5G will be the death of the current cellular industry, and that spectrum licensing and management will need to be overhauled.

During a 5G seminar hosted by the Australian Communications and Media Authority (ACMA) and the International Institute of Communications (IIC) on Tuesday night, Entwistle said that while the IoT will bring in revenue for vendors, it won't do the same for telcos.

"I'm perfectly prepared to accept that the Internet of Things is extraordinarily interesting to equipment makers and vendors, to systems integrators, to policy makers, and to people concerned with the social role of communications services in our lives, but there is an awful lot of noise about the Internet of Things that doesn't actually translate into, to put it strongly, a whole hell of beans for the telecoms operator who's looking to sell services to achieve revenue per customer or revenue per device," Entwistle said.

Using the example of a 5G hospital with tens of thousands of connected devices, Entwistle said that the vendors themselves will charge a monetary amount per device, while telcos will simply provide the same service as always -- an internet connection for the premises.

"The telecoms operator will not see a single penny from any one of those devices; they sell a 5Gbps fibre into the data room of the hospital today, and in 10 years' time they'll probably still be selling a 5Gbps connection, or 10Gbps fibre at half the price of today's 5Gbps fibre," he claimed.

"I can't see any business case for a telecoms operator."

Telcos are unprepared for this reality, he said, with many assuming that they will multiply their revenue streams along with the thousands of extra connected devices.

"An operator said: 'We will have 1,000 times as many devices and we only need 1,000th of the ARPU [average revenue per user] in order to build a business as big as our existing business'. That's not a business plan, that's just multiplying two numbers together and making a brave assumption," he argued.

"I wasn't impressed by their IoT strategy on that basis. I'm not saying no operator will do it. There are plenty of operators who will have local opportunities, and I think particularly in emerging markets where there is a better track record in the 3G and 4G side of things already.

"What I don't believe is an operator who has struggled to monetise Internet of Things in a 4G environment will find it any easier to do in a 5G environment."

On that note, Entwistle also stripped away the connection between 5G and the IoT that telcos and vendors have been pushing, saying the umbrella for inclusiveness under 5G is becoming too broad.

"We think the linkage between 5G and the Internet of Things is often more lobbying and positioning driven than actually tactically driven; there are plenty of things happening in Internet of Things in the 4G world and the proprietary world, which have their own momentum and their own way forward. We don't see exactly why 5G reaches into these areas in any particularly striking way," Entwistle said.

For instance, he said, automated cars are often linked with 5G, but the two are not bound together by any sort of roadmap or exclusive technological means.

"If you read a lot of policy papers on this, it's as though they're in lockstep and there's a mutual dependence, you can't have one without the other," he said.

"I completely disagree with that. I can see why it's convenient to put them together, but I think from the perspective that we look at it, it's a distortion and a distraction."

In a similar vein, Entwistle said 5G will not be a replacement for 4G; rather, they will coexist for at least a decade.

"5G is it's not really a G. It's not a replacement for 4G," he argued.

"You have to think of most of the [5G spectrum] bands as essentially outdoor-to-outdoor or indoor-to-indoor, but 4G is still going to have to be the way in which we deliver outdoor-to-indoor services. And on that basis, 5G is additive and slots in alongside 4G.

"There's a perfectly good roadmap ahead of 4G in terms of further improvement, and 5G is being designed to interwork very tightly with 4G, and I'd also add Wi-Fi into that mix as well. So we'll essentially add 5G to the toolkit rather than it being a substitute for 4G in I would say any conceivable timeframe."

The high-frequency bands that will be used for 5G will bring technical challenges as well as processing and licensing challenges, especially in relation to range, building penetration, the extent to which beam forming can be used in a real-world setting, network densification, and frequency width and reuse, he said.

"These high-frequency bands, they bring an enormous opportunity as well as a technical challenge, and the opportunity is the width of the channel. [In] the 4G world we live in today, we have 5, 10, 20MHz channels, but in the 5G world, we're talking about hundreds of megahertz and, in some people's vision, up to 2GHz channels," he said.

"The throughput you can get clearly from a channel that wide, and the processing challenge of dealing with it, is clearly enormous."

Frequency will have to be reused due to the high-frequency spectrum's inability to broadcast over a wide area or through buildings, resulting in the need for beam forming.

Entwistle also labelled the network densification issue as being "pretty severe" in Australia: "It is necessary to have a dense network for 5G, and you need to have a roadmap as to how you're going to get that," he said.

The changes that will have to be made to spectrum licensing for supporting 5G networks will be the death knell for the cellular industry as we know it, Entwistle added.

"We're running with maybe 700 megahertz of spectrum in a lot of cellular markets today around the world [for 4G]; we're talking about tens of gigahertz of spectrum over the next five to 10 years being prepared and conditioned and brought to market for 5G services. That doesn't happen using the existing licensing model," he said.

"There's a whole range of new licensing models up to and including essentially unlicensed use, but we see shared access as being the central case for that, and that's pretty disruptive for the existing cellular model."

Telcos won't be able to use their current monetisation model based on the amount of data being used, because the usage will be determined by devices all around customers -- and the data needed to connect to those will be significantly higher.

"In the 5G world, you'll have no idea what your phone has been connected to, the decisions on your phone connection over the month will have been made by the phone and the network, and the opportunity to either overcharge somebody because of those decisions or to upsell them to a bigger data bundle because you think they ought to be paying more -- that opportunity really fades, and you could argue that's fading in the 4G world, but 5G really is a nail in the coffin," he said.

"In a little burst of usage at 1Gbps, you could blow your entire bundle in eight seconds, and probably flatten your battery as well. So we really go as far here as to say that in the 5G era, we don't envisage the current cellular business model surviving."