5G infrastructure will boost UK economy by £10bn a year, says O2

5G infrastructure will boost UK economy by £10bn a year, says O2

5G infrastructure is set to deliver economic benefits twice as fast as fibre broadband in the UK by 2026, contributing £10 billion annually to the economy, finds O2-commissioned study.

The ‘Tech-onomy: Measuring the impact of 5G on the nation’s economic growth’ report forecasts £7 billion of direct economic value through businesses using 5G, with an extra £3 billion a year through secondary supply chain indirectly boosting the UK’s productivity by an extra £3 billion a year.

“Mobile is the invisible infrastructure that can drive the economy of post-Brexit Britain. The future of 5G promises a much quicker return on investment than fibre broadband, and a range of unprecedented benefits: from telecare health applications to smarter cities to more seamless public services,” said Mark Evans, CEO of O2.

“At O2, we are obsessive about customer need and delivering a best in class customer experience. But for individuals, businesses and communities to use mobile connectivity to its full potential, we need to set the right conditions to ensure a competitive and fair mobile marketplace. We need a sophisticated spectrum auction that encourages the quickest and fairest deployment of mobile spectrum, with a regulatory environment that delivers a level playing field for businesses and supports a competitive market for customers.”

Fibre broadband rollout has already started, but it will take almost a decade to deliver the same economic benefits as 5G will deliver in approximately six years, after beginning its rollout in 2020.

The combined value of 4G and 5G connectivity will add £18.5 billion to the economy in less than a decade, compared to just £17.5 billion for broadband overall.

Ofcom will, later this year, launch its mobile spectrum auction to release new airwaves to meet growing demand for mobile connectivity. 190MHz of spectrum in the 2.3GHz and 3.4GHz bands will be auctioned – an increase of just under a third of the total mobile spectrum currently available.

Earlier this month in its “Update on 5G spectrum in the UK” report, Ofcom said one of its key objectives is to ensure "that spectrum is made available in the most appropriate and timely way to enable investments, innovation and competition in the development of 5G services to benefit consumers and businesses”.

The regulator has worked closely with other European authorities to identify 700MHz, 3.4-3.8GHz, and 24.25-27.5GHz as bands that will enable 5G. However, in its latest report, Ofcom said it remains committed to explore additional bands on top of those identified.

It its report, Ofcom said it expects to award licenses for the 700MHz band in 2018/19, while it expects to release results of a consultation into the 3.4-3.8GHz band later this year.

To aid competition, Ofcom has proposed that BT/EE – which currently holds the largest proportion of useable spectrum (45%) – cannot bid for immediately usable spectrum (the 2.3GHz band).

O2 has stated that these measures do not go far enough to foster a fully competitive market, and has also called for Vodafone, which holds the second largest proportion of spectrum (28%), to be restricted to no more than half of this frequency. O2 states that these measures will avoid strategic bidding that harms competition to the detriment of consumers, and has also called for a cap on overall spectrum ownership of 35%.

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