As America digs out from the worst pandemic in recent history, it is faced with the monumental task of addressing the economic challenge raised by the 2020 statewide lockdowns. With the May jobs report showing 14.7% record unemployment, a staggering effort to overcome the greatest economic damage since WWII will be required. Indeed, McKinsey projects it may take up to three years for the American economy to recover, with a drop in real GDP growth of -3.9% from 2019 to Q4 2020.
The fifth generation of wireless cellular technology, “5G”, may help with this historic task. Let us look at some of the facts.
Having a wireless broadband connection continues to be critical for America’s resiliency and has kept Americans connected digitally when physically distancing during the pandemic. Many businesses have been able to remain open with employees working from home over their broadband connections. The social distancing guidelines that Americans are experiencing will continue, since there will be a blend of social-physical distancing as states begin to open up with new social distancing guidelines. An April 2020 MIT survey of 25,000 American workers discovered 34% are working from home, which is up from 7%, according to the World Economic Forum.
Operator networks have held up well, even as work-from-home data usage reaches new highs. AT&T reports a 22% increase in its core network traffic and a 30% increase in wireless voice minutes. The new combined T-Mobile/Sprint saw mobile hotspot usage spike 60%, while tethering was up 57% for T-Mobile and 70% for Sprint. With assistance from DISH and the newly opened 600 MHz “low-band” spectrum for 5G, T-Mobile’s network had download speeds double, according to OpenSignal.
But as the U.S. begins its recovery, 5G will become even more critical. According to a 2019 report from the Analysis Group, 5G can lead to an additional USD $274 billion to America’s GDP and USD $150 billion in network infrastructure investment. Perhaps more importantly, it will lead to 1.3 million new jobs – but with a major caveat: the study only forecasts this positive economic impact due to the re-allocating of 400 MHz of licensed mid-band spectrum for 5G networks.
These investments are especially significant because 5G creates a much needed multiplier effect in the wake of COVID-19, by providing connectivity and mobility across numerous other “Industry 4.0” technologies, including artificial intelligence (AI), Internet of Things (IoT), cloud and edge computing, robotics, and unmanned and autonomous aerial vehicles (UAV’s). For instance, the global 5G IoT market size will grow from USD $0.7 billion in 2020 to USD $6.3 billion by 2025, according to MarketsandMarkets. In cloud computing, the global cloud radio access network (C-RAN) market alone is expected to reach USD $43.35 billion by 2027, expanding at a CAGR of 22.7%, according to Grandview Research. To recover economically, the U.S. will need the enhanced productivity and technology innovation that 5G can bring.
5G is broadly applicable across numerous industry verticals. Manufacturing is the fastest growing 5G market between 2020 – 2028 with a CAGR of 134.54%, according to Market Info Group, through the impact of connected smart factories and autonomous manufacturing robots. For the energy sector, 5G-enabled sensors will revolutionize utilities with smart meters, remote equipment monitoring and digital data management. The smart grid market alone is expected to grow from USD $23.8 billion in 2018 to USD $61.3 billion by 2023, according to MarketsandMarkets. America will need these 5G-enabled efficiencies to recover.
A 5G network serving a wide variety of services and applications will use a combination of low, mid, and high-band spectrum, but having adequate mid-band spectrum is an important piece to the functioning of 5G networks. Networks will require low, mid and high band spectrum to fulfill the full promise of 5G. In the U.S. wireless operators are using existing low band spectrum for coverage and newly acquired high band mmWave spectrum for capacity. With high band mmWave frequencies broad swaths of spectrum allow for large capacity and high-speed data throughput– but with the trade-off of a smaller footprint. Mid-band spectrum provides the sweet spot combination of capacity and coverage for modern 5G networks that the rest of the world is coalescing behind. The international standards forum 3GPP identified the spectrum range 3.3-4.2 GHz as the core 5G band for countries around the world. But the U.S. has yet to auction any exclusive use licensed spectrum in that global mid-band range for 5G.
Source: 5G Americas
While the United States has been a leader in high-band “millimeter wave” spectrum availability, it is lagging other nations in mid-band. Other nations around the world are supporting the development of mid-band enabled 5G networks. As FCC Commissioner O’Rielly wrote to President Trump in April, “For America to be a global leader and win the race to 5G technologies, which we must do for both economic and national security reasons, we must actively identify and make available a key ingredient necessary for 5G networks and systems: mid-band spectrum. Yet, the pipeline is nearly empty, and our wireless providers lack sufficient mid-band spectrum to meet the exponential growth enabled by 5G networks and expected by users.”
Source: CTIA March 2020
Indeed, the growing global consensus on mid-band spectrum is spurring planning for the creation of mid-band enabled 5G networks around the world. In Latin America, many countries are considering mid-band spectrum for 5G. Mexico has already identified and allocated 150 MHz of mid-band spectrum. Also, Brazil has tentatively identified 490 MHz of mid-band spectrum for a future auction according to Jose Otero, Vice President of Caribbean and Latin America of 5G Americas. According to a March 2020 report by Analysys Mason, China, Italy, Japan, South Korea, and Spain have already allocated between 280 and 800 MHz of mid-band spectrum for their mobile wireless operators, with more on the horizon.
In United States, regulatory constraints have slowed the process of making mid-band available for 5G to a crawl. In March 2018, the MOBILE NOW Act was signed into law, requiring the National Telecommunications and Information Administration (NTIA) to submit a report to Congress by March 23, 2020 evaluating the feasibility of making the 3100 MHz-3550 MHz band available for commercial use. In January, the NTIA (which works with the Department of Defense to manage their spectrum), released a study covering only the upper part of the range (3450 MHz – 3550 MHz).
Meanwhile, the impact of the lack of mid-band spectrum for 5G is already being felt in early network speed tests. Countries with adequate mid-band spectrum are outstripping the United States in terms of real world 5G speeds OpenSignal. In the meantime, the federal government has turned its attention moved towards other wireless technologies, such as Wi-Fi.
While the U.S. government has plans to release a staggering 1200 Mhz for unlicensed spectrum use, it is important for the U.S. government agencies to make continued progress on exclusive use licensed 5G mid-band spectrum to allow U.S. technology leaders to continue to innovate in mobile wireless communications. 5G has great potential to address many vertical markets with end-to-end solutions that incorporate mobility, security and flexibility compared to other wireless technologies. Other countries around the world are making 5G a national priority to improve their countries economic and technological competitiveness. The U.S. must as well.
U.S. is clearly at a crossroads. The Coronavirus pandemic has created a once-in-a-lifetime economic challenge. To take advantage of the various technological and economic benefits that 5G will bring, the U.S. must move swiftly to eliminate the barriers that hinder its progress. Availability of as much spectrum in the 3 GHz band range as possible in the U.S. for 5G is critical to U.S. competitiveness on the world stage. Ideally, vendors could leverage global economies of scale through the 3 GHz band with rules optimized for 5G, consistent with 5G allocations in other countries. The U.S. is one of the leaders in 5G, innovation and technology. However, without significant progress on mid-band spectrum in the global 5G range, America’s leadership in the 5G race could falter – and so along with it, a great opportunity for a robust economic recovery.
President, 5G Americas
For More Information
- Press Release: 5G Americas Urges NTIA to Move Quickly on Mid-Band Spectrum for Commercial Wireless Use
- White Paper: 5G Spectrum Vision
- FCC Filing: 5G Americas files reply comments in response to FCC’s Notice of Proposed Rulemaking for 3.1-3.55 GHz band
- FCC Filing: 5G Americas comments in response to FCC’s Notice of Proposed Rulemaking (3.1-3.55 GHz)