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5G: The chance to lead for a decade

Deloitte Report

The shift to 5G

The world’s economy is at another pivotal moment as artificial intelligence, the Internet of Things (IoT), and augmented reality are transitioning from buzz words to the basis for long-term national economic potential. The catalyst for this economic growth is wireless connectivity enabled by 5G— a new standard for wireless telecommunications. 5G is not simply an extension of 4G, nor is it merely a faster wireless capability.

5G makes possible the connection and interaction of billions of devices of almost any kind and collection of data from those devices. Indeed, 5G connectivity promises to lead consumers, industries, and governments to new frontiers of productivity and innovation. However, an examination of how the United States compares internationally on investments critical to 5G surfaces a disturbing trend. Other countries are outspending the United States in both relative and absolute terms. In these countries, the execution is faster and more capital efficient than it is in the United States.

Since 2015, China outspent the United States by approximately $24 billion in wireless communications infrastructure and built 350,000 new sites,1 while the United States built fewer than 30,000.2 Looking forward, China’s five-year economic plan specifies $400 billion in 5G-related investment.3 Consequently, China and other countries may be creating a 5G tsunami, making it near impossible to catch up.

Being first to LTE afforded the United States macroeconomic benefits as it became a test bed for innovative mobile, social, and streaming applications.4 Being first to 5G can have even greater and more sustained benefits to our national economy given the network effects associated with adding billions of devices to the 5G network, enabling machine-to-machine interactions and utilizing data from such interactions. In this paper, we examine how the United States compares to other countries, revealing dramatic examples where it is losing ground in the race to be first to 5G.

We also consider a range of actions and policies that may help overcome deployment challenges and enable rapid and extensive 5G deployment, including a light-touch policy framework that urges carriers and their ecosystem partners to negotiate solutions without government intervention and encourages carriers to operate at greater scale and economic efficiency.

Link to complete report: Deloitte 

 

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