5G rollout could create up to 3 million jobs and add $500 billion to GDP

21 August 2018 Consulting.us

The blistering speed and expanded coverage of the nascent 5G wireless network is currently in development across the world. A recent report projects that the next generation wireless network's development could create 3 million jobs in the US and add half a billion to GDP (over and above wireless’ current economic contribution). 5G will also be necessary for full implementation of the Internet of Things, which will connect everything from industrial robots to home dishwashers.

According to management and tech consultancy Accenture, the US wireless industry already generates $475 billion in GDP, supports 4.7 million jobs, and creates $1 trillion in economic output. The underway rollout of 5G networks – which will boost coverage and data speeds, all while supporting the increasing amount of sensor-enabled and wireless-connected Internet of Things devices – will further increase the economic importance of the industry.

Wireless industry contribution to the US economy

A new report from Accenture projects that wireless providers will invest about $275 billion in US infrastructure over the next few years, creating 3 million jobs and boosting GDP by an extra half billion dollars. IoT, which has the potential to revolutionize and improve numerous industries from manufacturing to energy to transportation, will depend on robust and quick 5G networks. Accenture projects that industrial IoT applications will add $14 trillion to global economic value by 2030.

As such, an expansive 5G network will form the bedrock of IoT enhancements, like predictive maintenance on factory machines or constantly-connected smart products (fridges, washing machines). The report expects 18 billion of 29 billion connected devices in 2022 to be IoT-related. Meanwhile, global users with 5G subscriptions are expected to number 500 million by 2022.

According to the report, overcoming hurdles in infrastructure regulations and spectrum availability are key to unlocking the full economic potential of 5G. The next generation system requires much denser infrastructure than 4G – with up to 300,000 small cells required over the next four years (equal to two times the number of macro towers built in the last 30 years).

By 2022, there will be 29B connected devices globally

Accenture says that authorities will need to streamline permitting and processes, as well as revamp fee structures in order for 5G to roll out in any reasonable timeframe. In the current process, it can take up to two years for small cell applications to clear, often involving lengthy pole-by-pole assessments. If 5G approval timelines could be reduced by a year, the report says $100 billion could be added to the US economy in the next three years.

The other hurdle to timely 5G network development (and, as such, IoT viability) is the availability of spectrum. Though 5G more efficiently uses spectrum than previous iterations, its development still requires the government to make more available in order to realize 5G’s full benefits. In the US, the FCC previously opened up bandwidth for 5G in the underutilized high-band spectrum, though obviously more expansive spectrum allocations will be required in the future.

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Global 5G rollout expected to reach one in seven by 2025

26 March 2019 Consulting.us

5G networks – which promise lightning-fast data connections – are set to spread across the developed world in the coming decade. Uptake will be relatively low to start, however with a similar deployment to the previous 4G network. By 2025, approximately one in seven users are projected to be on 5G.

Mobile phone penetration has reached saturation in most developed and even many developing markets, with the devices used for a broad array of different functions – leaping from their humble beginnings as mobile telephones to the current smartphone platform, which serves as many people's primary conduit for personal computing and photography. 

Internet access remains a key part of the wider appeal of mobile phones, with various forms of consumption and data access serving as key drivers for use. In recent years, data consumption on mobile devices has skyrocketed, as both smartphone reliance and data-heavy streaming have exploded. High-quality screens and services that deliver HD content to mobile platforms means data usage potential remains high but limited, in part by network capacity.

4G has been the standard of internet data communication for the past five years, replacing 3G and 2G before it. The technology is largely deployed in developed markets and leverages the various GHz spectrums. 5G technology leverages the 3-4 GHz and 28GHz bands, allowing data compression to top 300 megabits per second (Mbps), well above the 4G capacity of 50 Mbps. The technology also boasts considerably reduced latency between sender and receiver - the time it takes for the recipient to receive the sent message. 

An analysis from Deloitte recently explored the development and deployment of 5G technology across the global ecosystem. The study was part of the firm’s wider "Technology, Media, and Telecommunications Predictions 2019" report into trends in the telecommunications space.

Spectrum prices similar levels to 4g rollout

As it stands, around 72 global operators are experimenting with 5G technology. The firm expects approximately 25 operators to have rolled out services by the end of 2019, largely in major cities and other hotspots. In 2020, nearly 1% of new mobile phones will be 5G compatible, with full uptake of compatible phones expected from 2021. One downside is the likely higher cost and the initial relatively low coverage for the technology. Another concern – battery life – is projected to be in line with 4G phones.

The increased cost of 5G technology is in part due to the difference in technology for both the modem and the antenna when compared to 4G. The latter in particular is likely to impose higher costs, reflecting the need for a dual antenna system able to pick up higher 28 GHz frequencies as well as sub-6 GHz frequencies.

The firm said that in the interim between the mass deployment of 5G handsets and the rollout of the network, 5G portable modems may become as popular as their 4G counterparts, which bridged the gap in the initial 4G rollout, with hundreds of millions of the devices sold.

Some countries rely heavily on wireless only connections

While broadband internet penetration is high across the developed world, some leverage 4G networks for home internet use. Around a fifth of people in the US do so. That number is closer to 25% in Canada and Turkey. The UK and France, meanwhile, have much lower uses of mobile data for citizens' daily home and businesses uses.

According to Deloitte, 5G technology is likely to create a new avenue for fast home and business broadband in areas where wide-scale deployment of fiber optics is impractical. While 5G has its limitations, situating an antenna on a building connected to a wireless router provides a new channel for high-speed internet penetration.

One in seven mobile connections will be 5G by 2025

The consulting firm's report notes that the deployment and utilization rates for 5G are likely to follow a similar trend to the deployment and utilization of the 4G network. As such, total mobile adoption share by 2025 for 5G is likely to be around 14% (around 1.2 billion connections), with 3G and 2G losing share – particularly the latter, as 4G become globally ubiquitous.

The report also notes that there will be considerable differences in uptake by market, with the US likely to have approximately 50% of total mobile connections through 5G, with a similar share in Japan. Europe's 5G share is projected to reach 30%, while China's uptake will be a slightly lower 25%.

“Wide-scale adoption of 5G devices will take time, but we believe 2019 will be the starting point for sweeping change for the wireless industry," Craig Wigginton, Deloitte's global telecommunications sector leader, said. "5G can provide hundredfold increases in traffic capacity and network efficiency over 4G, and this has transformative potential on the future of connectivity worldwide.”

Related: Global telecom leaders expect 5G rollout to take until 2022