5G is expected to contribute $2.1 trillion to global GDP growth by 2035; however, Europeans, Africans and Americans are less likely to benefit from this economic growth due to the poor state of fibre connectivity. Governments, regulators and operators in these regions need to do more to promote investment in fibre networks to realise the true economic benefits that 5G can offer them.
5G is promising to be the breakthrough technology of this decade. It is the next generation of mobile standards that promises to improve end-user experience by offering users gigabit speeds new applications and services and improved performance.
The 5G revolution is being driven by three main use cases:
- Enhanced Mobile Broadband (EMB), with the promise of 10Gbit/s connectivity
- Massive Internet of Things (MIoT), facilitating the development of smart buildings and smart cities
- Mission Critical Services (MCS), high-reliability, low-latency networks enabling applications such as autonomous vehicles, drones, and smart grids.
The telecoms industry is widely of the view that dense fibre connectivity is necessary to support the deployment of 5G networks and the traffic demands that will be placed upon them. Mobile operators will rely on the wide scale deployment of cell sites to create network densification in capacity-strained areas – where there is a high concentration of mobile users such as in urban areas – and the low latency rates required to enable gigabit speeds. Whilst a small cell approach to cell densification can provide additional network capacity and high speeds, it also serves to increase the traffic generated by mobile networks making the case for dense fibre transport networks. This contrasts with the copper and wireless connectivity technologies traditionally used in existing 3G and 4G macro networks.
5G is expected to spur global economic growth as a result of investments being made by firms in the 5G value chain and by enabling economic activity. One report estimates that the total contribution of 5G to real global GDP growth will be $2.1 trillion by 2035 – when 5G is expected to be widely deployed – adding 7% to the global GDP growth rate. Given 5G’s dependence on dense fibre connectivity, those nations with advanced fibre penetration will be better positioned to realise the economic benefits of 5G. Figure 1 shows that nations in the Middle East and Asia have advanced fibre penetration, compared to North America, Europe and Africa.
Figure 1 – Global fibre penetration ranking, Source: FTTH Council, February 2017
Taking a closer look at Europe, the UK, Belgium, Ireland and Greece have the lowest fibre penetration. Operators, governments and regulators in these countries must do more to promote investment in fibre networks to realise the economic benefits of 5G. In the UK for example the UK Government has promised to invest up to £1.1 billion into developing 5G and full fibre. The UK fund is dwarfed however when compared to Germany’s € 100 billion investment in fibre and 5G.
Small cells are a principal driver for greater investment in fibre connectivity and they can also play a significant role in the evolution of 5G networks. Dense small cell networks are being deployed by mobile operators as part of their overall strategy to improve 4G coverage and capacity in high footfall areas of city centres. The Wireless Infrastructure Group, for example, is launching Europe’s first shared, C-RAN small cell network deployment in Aberdeen underpinned by an investment in a full fibre network. The density of the small cells is likely to suit 5G particularly in city centres and where 5G is deployed in the higher capacity millimetre-wave frequency spectrum. Therefore, by deploying fibre connectivity to 4G small cell sites, mobile operators can future-proof the connectivity needed for future 5G networks.
For policy makers, these dense fibre networks have other advantages. If designed and built correctly, dense fibre networks can support political ambitions and government initiatives to improve digital connectivity, establishing themselves as digital economies and attracting inward investment creating jobs and economic growth. Policy makers should do more to encourage fixed and mobile operators to rollout small cell networks and to invest in dense fibre networks particularly in urban areas. By doing so, they will lay the foundations for 5G and future technologies and ensure that the associated economic benefits can be realised.
Tech companies and PPPs can also offer an alternative source of investment in fibre networks.