Report: Potential economic benefits of 5G in emerging markets

A major new study commissioned by Ericsson from management consultancy Analysys Mason highlights the potential economic, consumer and environmental benefits of 5G connectivity in 15 emerging national markets. With regulatory and government support, all fifteen countries could benefit from 0.3 to 0.46 percent GDP growth through 2035, an estimated three to sevenfold cost-benefit ratio.

The report, Future value of furniture in emerging marketsexamines the impact of multiple 5G spectrum deployment options to facilitate enhanced wireless and mobile broadband (FWA) access in clusters of consumers, industry, logistics, rural areas and utilities, and embraces several business case options, including vertical markets.

The detailed methodology included using national government statistics and reports, insights into the Ericsson network, and innovative mapping techniques – based on population density distributions and existing national infrastructure such as road and rail networks and agriculture – to model cost-effective throughout the different distribution options.

The deployment options are based on the initial assumption of having the basic 5G deployment added to existing mobile radio network sites. Additional options explore the additional benefits of adding low-band 5G spectrum coverage beyond the baseline (providing wider geographic coverage at the lower end of 5G capabilities and suitable for agricultural or logistics deployments) or 5G spectrum coverage in medium band, offering less geographical coverage per site, but with higher capacity and speed, suitable for manufacturing, automation, industry and advanced services.

Expanded 5G mid-band coverage is identified as the key success factor, with the potential to deliver around 80% of the cost benefits. The benefits of Smart Industry and Smart Rural clusters account for 85% to 90% of the total economic benefits in each emerging market.

Agriculture is a significant sector in all 15 countries, accounting for up to 10% of GDP in some markets. The report estimates that increased rural 5G coverage could lead to up to 1.8% long-term GDP increase from agriculture. 5G will also promote sustainable farming methods, increase efficiency and reduce agricultural waste.

Study findings include:

  • The cost of deploying basic 5G is estimated to be between $3 and $8 billion per country. An additional investment of 20-35% is required to extend coverage.
  • Extending coverage beyond the baseline can generate significant GDP gains from industrial adoption, especially from extending mid-range coverage
  • Most countries expected to generate total economic benefits (GDP) three to seven times the incremental cost of extending coverage
  • Findings suggest 5G mobile broadband can generate $1 billion to $10 billion in consumer surplus per country, with extended coverage delivering 20-30% more consumer surplus
  • Social benefits enabled by 5G will be greatest from 5G-based FWA use cases, smart factories, cargo and logistics, agriculture and healthcare
  • 5G adoption can help reduce emissions by supporting digital transformation in agriculture, freight and logistics, smart factories and construction

The study highlights how governments, regulators and policy makers can support the 5G ecosystem to deliver the benefits.

These include treating 5G as a national infrastructure with a national 5G strategy and roadmap; implement 5G spectrum policies that facilitate faster and more widespread deployment, including trading spectrum tariffs for deployment targets that meet connectivity policy objectives; implement policies and procedures to facilitate infrastructure rollout and site updates; work with communication service providers to improve coverage in areas where commercially-led solutions are not viable; incentivize the use and prominence of 5G in industry and manufacturing; promote 5G in the public sector and promote the environmental benefits of 5G solutions.

“This Analysys Mason Future value of furniture in emerging markets provides a detailed breakdown, based on comprehensive research in realistic and achievable scenarios in each of the 15 countries, of the potential economic, social, environmental and national benefits of 5G in these markets,” says Andrew Lloyd, Head of Government and Policy Advocacy, Ericson “With the support of governments, regulators and policy makers, each of these 15 countries and their citizens will reap significant benefits from 5G connectivity. In addition to economic benefits, 5G can also reduce climate impact, increase social inclusion , well-being and addressing the digital divide in areas where the availability of fixed infrastructure is scarce”.

“The study highlights the benefits of having the right spectrum available for 5G deployment, both for geographical coverage, for which low bands are very suitable, and in the 3.5 GHz band, where most deployments High-capacity 5G in other markets is already underway,” adds Janette Stewart, Partner, Analysys Mason.

The countries covered by the report’s research are Bangladesh, Brazil, Chile, Colombia, Egypt, India, Indonesia, Malaysia, Mexico, Morocco, Nigeria, Pakistan, South Africa, Thailand, and Turkey.

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