A few years ago, 5G was the darling of densely populated urban centres, promising to transform the way we live, work, and play through its high capacity, multi-gigabit and ultra-low latency capability – and this was to be achieved through the deployment of dense small cell networks.
Fast forward to today, and we have not quite seen the urban transformation that was promised by 5G. The reason for this is simple – it is down to network economics. Simply put, there is not enough demand or the use cases to justify the cost of deploying dense 5G networks in urban areas, yet.
Intelligens Consulting has spoken to many technology providers, mobile operators, and neutral host providers over the last few months and they all agree.
5G is like Cinderella’s Glass Slipper
The catch with 5G is that it is like Cinderella’s glass slipper; we are constantly looking for ‘use cases’ to fit the technology retrospectively. Despite over £150 million being committed by the UK Government to 5G testbed projects, we still have not found a use case for the technology that has both mass-market benefits and which is commercially sustainable without public subsidy.
Instead, and quite rightly so, mobile operators have therefore been incremental upgrading their 4G macro networks to offer limited 5G services which is cheaper than investing in standalone dense 5G small cell networks.
Add to the mix Covid-19, which has resulted in rural and suburban home workers that need broadband connectivity that is on par with cities. According to Ofcom, rural premises are ten times less likely than urban premises to get decent broadband.
In the meantime, and against all the odds, rural 5G use cases are starting to emerge. With all that in mind, it makes sense to ask if 5G is the silver bullet to connect rural areas. There is a number of reasons to suggest why.
Network economics associated with 5G FWA are more favourable than fibre
First, Fixed Wireless Access (FWA) operators are already providing high-speed broadband connectivity to areas poorly served by fibre or 4G. According to Ofcom, it can cost anywhere between GBP 2,000 to GBP 2,500 to serve a rural property with a dedicated fibre connection.
Based on figures obtained by Intelligens Consulting from one FWA provider, the network economics are significantly more favourable when compared to fibre to the premise making FWA more favourable for deployment in rural areas.
5G-enabled FWA can reduce costs further. It works by replacing the expensive fibre backhaul with a 5G wireless connection which connects to a device located within end-user premises. In turn, end-users are offered WiFi connectivity around the home or business premises.
Intelligens Consulting estimates that commercially led deployment of fixed gigabit connectivity is expected to reach around 76% of all UK premises.3 5G FWA could successfully connect those premises in the final 24% where it is not commercially feasible to deploy fibre.
5G FWA a steppingstone to broader 5G deployments in rural areas
Another benefit of this approach is that 5G FWA networks can be used as a stepping stone to broader 5G deployments across rural areas. The clearance of and soon to be auctioned 700 MHz spectrum will also help with this. The 700 MHz spectrum band is ideal for carrying cellular signals over long distances, ideal for increasing 5G coverage across rural areas.
In the future, 5G will eventually be able to use much higher spectrum bands (millimetre wave bands like 26 GHz and above) giving access to greater spectrum. This additional spectrum means that there will be more capacity for data traffic and greater download speeds as demonstrated by recent trials undertaken by Ericsson, Qualcomm and US Cellular.
FWA is faster to deploy than fibre in rural areas
A further benefit of FWA is that it will be faster to deploy and connect end-users than traditional fibre deployment methods as it avoids lengthy civils works to lay the fibre network, with service activation taking days rather than months.
The use of neutral host networks will also allow mobile operators to benefit from a reduced total cost of ownership as neutral host providers finance the build of passive (and in some cases active) mobile network components.
One area where neutral host providers can play a role is in the deployment of small cells. Typically, the preserve of urban densification, small cells may be considered in rural population clusters, e.g. towns, villages, and hamlets.
Deploying a small cell in a rural area would be cheaper than deploying a cell tower by a significant margin making it a more commercially feasible approach.5 Deploying small cells would also face less local planning objections compared to siting ‘tall’ new towers.
There is a clear role for 5G to address the digital divide in rural areas
In conclusion, there is a noticeably clear role for 5G to address the digital divide in rural areas and it should be a consideration in the overall digital infrastructure mix. End user demand is high favouring early deployment, and demand is likely to remain strong for the foreseeable providing a stable commercial case for deployment.
Intelligens Consulting Ltd is a boutique telecoms advisor providing investors, operators, and policymakers with technical, strategic, and commercial advice, with a global client base. Its Founding Director, Iqbal Singh Bedi is described as part of an elite group of people that has offered professional advice to the UK’s Prime Minister and Scotland’s First Minister. Intelligens Consulting’s research has also been used to inform the House of Lords on 5G policy.