Mid-band 5G spectrum crucial to economic growth in North America

New data from GSMA Intelligence shows, for the first time, the specific economic impact of 5G using mid-band spectrum. North America is an early leader in 5G development and will use 5G connectivity as a powerful driver of GDP growth throughout the decade, reaching US$122bn in 2030. This growth has been helped by 3.5 GHz assignments for 5G launch.

As the region seeks to emerge from the uncertain environment of the pandemic, mobile will continue to have a role to play in connecting a brighter future. Productivity gains made in the 2010s, through the development of 4G, helped the world to teach, talk, carry out transactions and do business more efficiently. Today these benefits are bound tightly into the North American economy and a new phase of development can now come from the deep integration of 5G into our lives, societies as well as businesses.

The GSMA Intelligence report outlines how, with the right regulatory tools, 5G can become a central pillar of North American economic development strategies. Its benefit to sectors such as manufacturing, services – including healthcare and education – and public administration – including smart cities – can start a new wave of economic growth.

Spectrum capacity for GDP impact

Beyond the potential economic benefits, GSMA Intelligence also analysed the impact if capacity needs of 2 GHz of mid-band spectrum are not met. The analysis shows that, under spectrum constrained to today’s assignments, up to 40% of economic impact could be lost.

If spectrum is limited to current levels as demand for services grows, increased network congestion and deployment costs will stifle 5G. Network quality and speed will suffer, limiting 5G adoption and its economic impact. On a global basis, constraining mid-band capacity can reduce the 2030 impact of 5G from 0.68% of global GDP to 0.42%.

An average of 2 GHz of mid-band spectrum for mobile operators is required in the 2025 and 2030 timeframe. In North America, that goal leaves a shortfall of 0.93 GHz beyond today’s assignments. While the region is starting to move closer to the 2 GHz figure already, mirroring the 5G-leading markets in East Asia maximising existing harmonised bands is crucial and the lack of 6 GHz licensed 5G in the region makes meeting mid-band capacity needs a challenge.

Manufacturing delivers 5G promise

Manufacturing will provide the majority of GDP impact as the industrialised countries of North America exploit mid-band 5G. The fact that 5G will deliver the strongest growth in this economic area is not surprising. Manufacturing is continually looking to improve the productivity of its processes, reduce costs and remain competitive on the global stage.

It is well-placed to take advantage of the expanding deployment of 5G and the services and opportunities that will arise from pervasive and ubiquitous connectivity. Predictive maintenance, machine vision and XR are all elements of a wide range of 5G applications that manufacturing can exploit.

The services sector, including healthcare and education, will have the next largest impact while public administration will also play a significant role.

The coming years will decide the extent to which 5G can deliver on its promise. Spectrum is required to provide fast, affordable services. Governments and industry need to work together on this – through WRC-23 and in national processes – to ensure that 5G can power a new phase of economic growth.

To find out more about the socio-economic benefits of mid-band 5G services, download the report here.