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£14.8bn of Economic Benefits from Full 5G as UK Cover Hits 30%

Tuesday, November 17th, 2020 (8:00 am) - Score 1,704
5g_uk_mobile_broadband

A new study from consulting and research firm Analysys Mason has estimated that the new generation of ultrafast 5G based (mobile broadband) networks, which are currently being deployed by Three UK, Vodafone, EE (BT) and O2, could deliver £14.8bn in economic growth to the UK between 2025-2040 (at a cost of c.£3bn).

The new report is based on a study conducted by Analysys Mason for Ericsson and Qualcomm (i.e. two companies with strong vested interests), which examined the costs and benefits of a “full 5G deployment” (i.e. standalone virtualised networks). The work focused on a series of possible use cases for 5G (e.g. machine-to-machine and ultra low-latency communications), beyond the initial enhanced mobile broadband (eMBB) services for consumers.

NOTE: The report doesn’t mention the UK’s Huawei ban, which is expected to delay completion of the 5G rollout by 2-3 years and add costs of up to £2bn.

At present the estimated 5G population coverage in the UK has been put at c.30% in Q3 2020, which places it near the average for European countries where 5G has already been launched (there aren’t many of those – the UK is among the technology’s early adopters). Sadly, we don’t get any figures for geographic coverage, which tends to be a bit more useful in the UK.

Figure 2.1 below shows the total 5G population coverage in different countries in Europe (pink line), overlaid on a classification of the population into three geotypes: urban, suburban and rural. The chart does not indicate the split of 5G coverage across these geotypes (e.g. there may be some 5G coverage of rural areas). Commercial operators generally rollout coverage in more densely populated areas first (i.e. urban areas).

Analysys-Mason-5g-coverage-q3-2020

Overall, the analyst’s modelling indicates that, as a total “open innovation platform“, 5G networks in the UK can deliver c.£15bn in benefits (i.e. £12.7 per person, per annum over 15 years) at a cost of c.£3bn, which equates to a cost-benefit ratio (CBR) of 5.2 benefit to cost.

Notably, over three quarters of the projected UK economic growth will be driven by just three sectors – manufacturing (£5.2bn), construction (£4.2bn) and agriculture (£2.2bn).

Analysys-Mason-5g-economic-benefits-for-uk

The study also examined use cases where public subsidy might be needed (e.g. rural areas), where they estimate that over £2.5bn of benefit can be delivered in the UK for less than £800m of funding. However, this is expected to see some overlap with the new £1bn Shared Rural Network (SRN), which is using £500m of public investment to help mobile infrastructure reach “total notspots” (areas of no mobile signal). The catch is that Analysys Mason don’t yet know how many new sites will be built, which makes it hard to estimate the final cost vs benefit.

As we always say, accurately assessing the positive economic impact of a faster mobile broadband technology, as well as other improvements like lower latency and greater reliability (example), remains incredibly difficult. Part of the problem here is that good 4G networks can often already do a lot of what 5G is hyped up to deliver, although this aspect is frequently ignored in favour of hype by those with a vested interest.

None of this is to say that 5G won’t deliver various big improvements, it absolutely will, but it’s still more of an evolutionary than revolutionary technology – one that is dependent upon being fed with enough spectrum and fibre optic data capacity. In fairness, we think Analysys Mason’s report is perhaps one of the more grounded studies to come out.

Leave a Comment
8 Responses
  1. Avatar Philip SIMPkins says:

    A few local councils have halted 5G rollout.

    Bedford has, citing and I quote “not to take any further action due to the potential legal implications of invoking an uncertain principle in the face of uncertain evidence”. And there was me thinking comms infrastructure was not allowed to be objected to by local councils as it’s a central government responsibility. I love being stuck in 1999 with no fibre and no 5G. I can’t believe some tinfoil hat pensioners can say “5G bad” and that’s it .. bam the council stops the rollout (by not granting permissions) with zero evidence presented by the nutters

    1. Avatar The Facts says:

      Bedford council passed an application on 21 July 2020.

      Address Bunyan Road Kempston Bedfordshire
      Proposal Installation of 5G (Fifth Generation) equipment comprising 20m Phase 8 Monopole C/W wrapround Cabinet at base and associated ancillary works
      Status Decided – Permitted
      Decision Siting and appearance permitted TELPN
      Decision Issued Date Fri 31 Jul 2020

    2. Avatar Philip SIMPkins says:

      ok i stand corrected then obviously, but that quote was directly from their meeting on the anti-5g nutters that was around about May I think.

  2. Avatar Mark Bing says:

    £14.8 billion….who made that up, total pie in the sky rubbish AGAIN!! Why not get the 3 or 4G working properly first? People are going to be incredibly disappointed just like we all were with 4G

  3. Avatar buggerlugz says:

    30% coverage for 5g nationally? really? I can’t imagine the figure is really that high for a second.

    1. Mark Jackson Mark Jackson says:

      Quite easy to deliver that via dense urban cities as they’re only looking at “population” coverage, which is very different from geographic reach where they’d still be in single digits. They’re also looking across all operators combined.

  4. Avatar Buggerlugz says:

    I’m still struggling Mark, especially when some 5g masts are being placed outside towns and cities in very sparsely populated areas currently.

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