5G Connected Cities Services Set to Play Important Role in Economic growth
5G will generate trillions of dollars in direct, indirect contributions and productivity gains, according to a new study conducted by ABI Research and commissioned by InterDigital, Inc., a mobile technology research and development company. The study, which examined the growth opportunities for next-generation wireless technologies in urban environments, also revealed how 5G would underpin future vertical services and spur the proliferation of connected cities.
In the new study entitled, ‘5G urban deployment: debunking the capex myth and unlocking new growth’, ABI Research highlighted increased revenue opportunities through 2028 in three separate areas as a result of 5G:
- US$2.4 trillion in direct contributions: mostly driven by end-user subscriptions for connectivity services. This compares with US$1.1 trillion with 4G.
- US$866 billion in indirect contributions: these include increases in the supply chain from devices, infrastructure, applications, advertising and other products or services. This compares with US$500 billion in 2018 on 4G.
- US$3.2 trillion in productivity gains: these refer to better workforce efficiency due to the availability of connectivity throughout cities.
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The survey particularly highlights the role of connected cities in the US$17 trillion in economic growth 5G is expected to generate by 2035. According to the findings, mobile operators should take bold steps to deploy 5G mobile broadband connectivity more aggressively in cities over the coming years. The study also highlights how the introduction of 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.
Early commercial 5G deployments have already been announced, with examples across the globe in the United States, China, Japan, South Korea, and the United Kingdom, supported by infrastructure vendors that have started to ship 5G-capable network equipment. The first 5G-related use cases will be fueled by enhanced Mobile Broadband (eMBB), but advanced and use-case enabling 5G features, such as Ultra-Reliable Low-Latency Communications (URLLC) and Massive Machine Type Communications (MMTC) will start to appear as early as 2020. A number of technologies are contributing to this development, including private cellular, millimeter wave (mmWave), small cells, fixed wireless access, and telco cloud/edge.
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“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,” said Henry Tirri, CTO, at InterDigital. “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.”
Commenting on the findings, analyst Dimitris Mavrakis from ABI Research said: “We have reached a critical point today where our global economy is heavily reliant on our ability to deliver new technological services. 5G has the potential to completely change our every day lives, but only if mobile service providers can roll out 5G in a way that makes economical and logical sense – that is, to start with mobile broadband connectivity deployments in urban areas to create the right use cases that will justify investments in CAPEX and OPEX.”