A report released by ABI Research urges telecom operators to be more aggressive with their 5G deployment in cities to leverage the new potential economic value.
5G technology is expected to generate trillions of dollars through both direct and indirect contributions.
The study, titled ‘5G Urban Deployment: Debunking the CapEx myth and unlocking new growth’, found that 5G will generate growth in three areas between now and 2028.
They found that $2.4 trillion will be gained in direct contributions which will most likely be due to end-user subscriptions for connectivity services, $866 billion in indirect contributions such as through increases in the supply chain from infrastructure, advertising and devices, and finally, $3.2 trillion in productivity gains which will be generated from greater workforce efficiency due to increased connectivity within cities.
Vertical enterprise services are expected to mature by 2035 and ABI Research forecasts that 5G will generate $17 trillion in economic growth by then. However, at first these services will be evident in bigger cities but will then extend to non-urban areas.
“5G in urban areas can create a new wave of enterprise vertical use cases that will redefine consumer lifestyles and enterprise operations in cities. The dense population of urban areas will allow mobile operators to better monetize new 5G services without massive investment or a long ROI cycle,” the report read.
ABI Research also found that the first 5G-related use cases will be driven by enhanced Mobile Broadband (eMBB) but other advanced use-case-enabling 5G features like Ultra-Reliable Low-Latency Communications (URLLC) will begin to appear by 2020.
“We have reached a critical point today where our global economy is heavily reliant on our ability to deliver new technological services,” said Dimitris Mavrakis from ABI Research. “5G has the potential to completely change our everyday lives, but only if mobile service providers can roll out 5G in a way that makes economical and logical sense- that, to start with mobile broadband connectivity deployments in urban areas to create the right use cases that will justify investments in CapEx and OpEx.”
InterDigital’s (the company which commissioned the study) Chief Technology Officer, Henry Tirri, said “We expect 5G deployment to begin to place huge pressures on mobile operators over the next couple of years as they look to compete to capitalize on its revenue potential. Many are trying to understand how they will monetize this next generation of wireless technology, and most importantly, how they’ll deliver ROI from it. But while there may still be several questions and doubts surrounding 5G monetization, these findings clearly demonstrate the growth opportunities that 5G is set to bring about. While CapEx and OpEx investments will be high, it is evident that 5G technology will radically change our ability to deliver new and innovative consumer and enterprise services, and help dictate the trajectory of our future global economy.”