The cost of 5G in Europe

The benefits of the low latency, ultrafast 5G technology is expected to create roughly $12 trillion in global economic value by 2040 [1]. In order for this to happen, trillions of dollars will need to be invested into the rollout of 5G. The massive capital investment will need to include small cell and macro site densification, fiber backhaul, cloud-computing resources, core network upgrades, regulatory fees, additional spectrum costs, and the 5G enabled devices themselves.

In Europe, the benefits from 5G could reach over €113.1 billion per year by 2025 [2], spanning four key sectors: automotive, healthcare, transport, and energy. These sectors are the ones most likely to take advantage of 5G early on and fuel further innovation along with enabling 5G-powered businesses and solutions.

A study done for the European Commission estimated that €56 billion is required from the mobile network operators for the deployment of 5G in the EU. The investment into 5G will provide a boost to the economy as it’s likely to create up to 2.3 million jobs in Europe. The challenge associated with the high investment costs of 5G is that revenues from the MNOs to support it are currently flat.

MNOs must invest in 5G and are under tremendous pressure to bring 5G to market, faster and at lower costs than ever before. They face fierce competition and price erosion yet have enormous investment requirements for 5G, forcing them to look for alternative ways to reduce costs and roll out 5G. The way networks have been deployed and managed in the past won’t be sufficient for 5G deployments.

The growth of mobile connectivity and the advancement in wireless technology continues to drive innovation worldwide. The jump from 3G to 4G made Apple’s FaceTime possible, brought 4k video to our phones, and helped Uber gain usage and popularity. As we move from 4G to 5G, endless possibilities abound for businesses, entire industries, and municipalities worldwide. The infrastructure requirements for 5G are much denser than that of 4G and thousands of small cells will be needed over the next few years to support the new network [3]. The densification may have to support a million connections per square kilometre for applications like the Internet of Things. Existing 4G cell sites will also need to be upgraded and optimized for both 4G and 5G. 

The same innovation that is spurred on by 5G is required for the MNOs to effectively and cost-efficiently roll out 5G. A new model is required to successfully deploy and manage the sheer amount of 5G sites required over the next few years. Sites need to be deployed faster and cheaper than ever before.

MD7 has extensive experience within the telecommunications industry along with local knowledge within many communities around the world. MD7 has developed specialized software solutions tailored specifically for the wireless industry to help mobile network operators acquire, upgrade, and manage their network real estate to maximize the value of their assets.

[1] World Economic Forum
[2] European Commission
[3] European Commission

mayo 19, 2020
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