5G networks: Bridging the infrastructure gap
Changing how we connect and communicate
5G connectivity opens the door to new applications, sources of business, and cost reductions – with significant benefits for industries including logistics, transportation, health, and education. As the fifth-generation mobile network, 5G is designed to bring everyone and everything closer together[1] by processing high volumes of data with minimal delay,[2] enabling millions of devices to connect and interact.
In line with the ninth UN Sustainable Development Goal - to build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation - 5G enables new data collection and exploitation techniques including Big Data, Augmented Reality, and Deep Learning, for significant socio-economic benefit.
One of the many uses of 5G is for good quality internet for households or micro businesses. Connection methods include:
- A mobile wireless broadband connection using the 5G spectrum, largely leveraging existing infrastructure
- A fixed broadband connection, preferably fiber based (for higher speed) and deployed at the residence of the end user
- Fixed Wireless Access (FWA) – a combination of mobile and fixed connections.
Currently, mobile connections have better coverage by population in many countries. Mobile connections also require less infrastructure investment, however fixed broadband connections offer faster speeds and higher quality connections. As a combination, FWA provides ultra-fast connectivity without the need to deploy a fiber based fixed connection to the end user’s location.
Infrastructure limitations
Universal coverage for 5G requires closing the large telecommunications infrastructure gap in areas where even previous standards have not been reached. Although the investment required for mobile networks is not low, it is significantly lower than the investment required for fixed broadband networks.
The availability of telecommunications networks providing 4G (the predecessor to 5G) varies between countries, with disparity for fixed broadband being far greater than mobile. Based on International Telecommunication Union (ITU) 2021 data,[3] fixed broadband networks with 4G were available to no more than 7% of households in Africa but were available to over 94% of European households. Whereas for mobile networks with 4G, availability stands at 98% across Europe and 49% in Africa.
Over the past four years, 5G has been introduced in most countries, however there are big differences in deployment and usage. ITU data shows that in 2021, Asia Pacific had 16% population coverage with 5G, while the Americas had 36% and Europe had 52%.
Costs increase, but not dramatically
The good news is that 5G can be expanded to a significant extent using infrastructure deployed for previous standards, resulting in lower investment requirements.
Most of the antennas and location permits used for 3G and 4G connections are also used for 5G. The main requirements for widespread universal 5G connectivity are more antennas and micro-cells, on top of existing sites. The Global System for Mobile Communications (GSM) Association estimates that that by 2025, the number of sites will increase from the existing 20-30 to 50 per operator. This requires significant investment, which can be reduced by using existing 4G antennas and base stations.
Private sector innovations
To accelerate the deployment of 5G, operators and regulatory institutions are developing innovative solutions to reduce their costs, especially for civil infrastructure (estimated at up to 70% of the deployment cost).
Operators in Latin America, North America, Asia, and Europe are developing voluntary network sharing agreements for infrastructure deployment costs in new coverage regions, such as rural areas. Bilateral contracts allow for peering agreements by which one operator deploys in one region and provides access to its physical infrastructure to others, in return for reciprocal access elsewhere. Such projects may obtain public financing, given that some open network provisions are met.
Interest from global technology leaders in large physical infrastructure deployment is high, as business growth relies on coverage and connection quality. Google and others are developing submarine and long-distance trunk lines for large traffic transport and are investing in digital infrastructure assets including cloud and hosting services, and content delivery networks.
For mobile networks, neutral operators that only manage the wholesale part of the business are investing in infrastructure development, and in some countries manage or own over 50% of sites and antennas. ‘Wholesale only’ models take different ownership forms, such as public or public-private, and enable cost sharing among all operators wanting to use the physical assets.
Government support
The availability of 5G spectrum (the basic road through which data flows) is an important driver for development, innovation, and business growth, and government support is needed to meet growing demand.
Regulation that promotes the sharing of certain parts of deployment among different agents, such as civil works (including masts, or in-building provisions) can reduce resource duplication and entry barriers. Governments can also facilitate the installation of antennas in public buildings or reduce the overall administrative costs of putting antennas on private property.
Also, regulating the free use of any spectrum band by agents with usage rights and allowing certain bands to be refarmed can facilitate technological neutrality.
Regulators can reduce the costs of acquiring spectrum, e.g. by distinguishing spectrum in low density areas from others or designing auctions to incentivise quick deployment and usage. In some countries, such as Mexico, a neutral private-public operator has been granted a large portion of the spectrum and rents its capacity to retail telecommunications providers.
Given the huge potential for 5G to create value from a public resource, some countries have dedicated part of their licensed spectrum to new agents, private firms, industrial areas, or non-traditional operators.
There are several lessons to extract from recent experience in network deployment by private agents. Collaboration models are possible, and public intervention can support deployment costs and coordination. There is no ‘one size fits all’ model, but given the specificities at country level, there are many opportunities to improve connectivity availability and increase the value that 5G brings.
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