Mid-band 5G spectrum crucial to economic growth

Study finds 65% of 5G GDP impact ($610bn) to come from mid-band in 2030, driven by manufacturing, services, and public administration

New data from GSMA Intelligence shows, for the first time, the specific economic impact of 5G using mid-band spectrum. The analysis forecasts that 5G will boost global GDP by $960bn in 2030 and illustrates how mid-band will be responsible for $610bn, or 65% of the overall figure.

This research shows the extent to which government policies that prioritise mid-band 5G spectrum can aid economic development for the years ahead. The mobile industry began to demonstrate the link between communications development and economic growth around 20 years ago, when many governments perceived connectivity as a luxury. However, it was not until after the financial crisis of 2009 that mobile development became universally accepted as a vital part of government policy.

As the world seeks to emerge from the uncertain environment of the pandemic, mobile will again 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 global economy and a new phase of development can now come from the deep integration of 5G into our businesses and societies.

The GSMA Intelligence report outlines how, with the right regulatory tools, 5G can become a central pillar of worldwide 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 benefits, GSMA Intelligence also analysed the impact if industry capacity targets of 2 GHz of mid-band spectrum are not met. The analysis shows that, under spectrum constrained to today’s assignments, up to US$360bn of economic impact could be lost in just 2030.

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.

Mobile needs spectrum, and an average of 2 GHz of mid-band spectrum is required to get the job done. In many countries, that goal leaves a shortfall of 1 GHz beyond today’s assignments. While many developed communications markets are starting to move closer to the 2 GHz figure already, there is often still work to be done.

As such, the report recommends making harmonised spectrum available for licensed 5G in core ranges such as 3.5 GHz, 4.8 GHz and 6 GHz.

Manufacturing delivers 5G promise

Almost 40% of the GDP impact of mid-band is expected to come from the manufacturing sector. 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. Here, intelligent traffic systems (ITS) can use AI-based traffic monitoring and real-time video analysis to make our cities less congested, cleaner and more productive.

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.