Achieving the sub-1ms latency rate identified as a technical requirement for 5G necessitates a new way of thinking about how networks are structured, and will likely prove to be a significant undertaking in terms of technological development and investment in infrastructure.
Despite the inevitable advances in processor speeds and network latency between now and 2020, the speeds at which signals can travel through the air and light can travel along a fibre are governed by fundamental laws of physics. Subsequently services requiring a delay time of less than 1 millisecond must have all of their content served from a physical position very close to the user’s device. Industry estimates suggest that this distance may be less than 1 kilometre, which means that any service requiring such a low latency will have to be served using content located very close to the customer, possibly at the base of every cell, including the many small cells that are predicted to be fundamental to meeting densification requirements. This will likely require a substantial uplift in CAPEX spent on infrastructure for content distribution and servers.
Source: Understanding 5G