Petroc Taylor
Research expert covering global developments in the use of data
Get in touch with us nowInvesting in the future: a period of heavy spending
Licenses to operate on 5G-compliant frequencies are granted by federal telecommunications authorities, through auctions in which telecommunications companies bid to purchase blocks of spectrum. This can raise billions of euros for national coffers. Telekom Deutschland GmbH paid 2.17 billion euros in 2019 to utilize the 700 MHz and 3.6 GHz frequencies, in an auction that raised 6.5 billion euros overall.Some corners of the industry have criticised the difference in bid prices across European markets. Bids made in countries such as the United Kingdom have been significantly lower than the amounts paid for 5G licenses in Italy, where Telecom Italia and Vodafone both paid above two billion euros for licenses. The European sums pale in comparison to those in the United States however. In the 2020 auction of 3.6 GHz spectrum in the United States, Verizon committed to a 45.5 billion U.S. dollar investment in 5G.
By 2040, the cumulative costs of 5G-enhanced mobile broadband (eMBB) deployment in Europe are expected to amount to 147 billion euros.
Coverage
While the roll-out is not at the same stage for all countries, approximately 39 percent of available 5G spectrum has been assigned and is usable in several key frequencies across the continent.In most countries, the bulk of the 5G service will be achieved using the 700 MHz frequency, which offers improved range at a lower speed. Germany, for example, will have 99 percent of the population covered by 700 MHz services by the end of 2025, and 43 percent of the population will be covered by 3.6 GHz services. (1246342) Data transfer is much fast over 3.6 GHz, but range is more limited. Similar levels are seen in other countries, including France and Italy.
Economic benefits
While the ability to stream movies and music without suffering through buffering is nice, it is not the main factor driving the growth and investment in 5G. Governments and industries are expecting significant economic benefits arising from improved productivity and enhanced access to technology, making the cost-benefit ratio a favorable one.Across Europe, industries such as construction and agriculture could see overall benefits almost ten times higher than the costs associated with 5G upgrades. Smart factories are set to see great benefits as well, with an improved connection density, lower latency, and faster data transfers unlocking benefits amounting to 67.1 billion euros, against costs of 10.5 billion euros.
Worldwide, the availability of 5G could add approximately 1.3 trillion U.S. dollars (1208489) to global GDP by 2030.
