Mid-band 5G spectrum crucial to economic growth in Europe

Spectrum assignment can be a powerful driver of industrial development and economic growth over the next decade. The GSMA’s latest data – an analysis of the direct monetary impact of mid-band 5G – shows, for the first time, the potential socio-economic benefits at stake as governments and regulators grapple with how much mid-band mobile operators need.

Europe is expected to benefit both significantly and quickly from mid-band 5G, with a $67bn increase in Europe’s GDP produced by mid-band 5G in 2025 growing to a $121 billion GDP uplift in 2030. This equals around 0.4% of regional GDP, according to GSMA Intelligence.

At the country level, the largest economies of Germany, the UK and France are expected to drive most of the 5G mid-band benefits in the region. However, the relatively high level of 5G penetration forecast by 2030 across the region will result in significant benefits as a percentage of GDP throughout the region.

As the region seeks to emerge from the uncertain environment of the pandemic, mobile continues 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 European 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 European 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%.

Government and regulatory action is required. Last year, the GSMA presented its vision of how much mid-band spectrum mobile operators will require between 2025 and 2030. An average of 2 GHz of mid-band spectrum per market is required to get the job done.

In Europe, that goal leaves a shortfall of around 0.95 GHz compared to today’s assignments in most markets. The region has historically shown forward-thinking on spectrum – the 800 MHz band and the early assignment of 3.6-3.8 GHz are two examples – but 5G expansion capacity needs attention. 3.8-4.2 GHz is one opportunity currently under discussion.

However, with 4.8-4.99 GHz unlikely to be made available in Europe, the use of the upper 6 GHz for licensed 5G becomes critical to avoid untenable small cell densification and keep pace with the new connectivity leaders in East Asia, the Middle East and elsewhere. While countries such as Finland are showing the way when it comes to managing spectrum demand from verticals without using set-asides, other countries still need to ensure that prime 5G bands are made available for everyone to benefit from.

The GSMA recommends that at least 6425-7125 MHz is made available for licensed 5G, especially in markets that do not make use of macro-cell 3.8-4.2 GHz. Carrying out cost-benefit analysis of these ranges will benefit all consumers. This requires detailed study of the impact of reduced 5G performance and penetration against any perceived benefits of more Wi-Fi access spectrum or other legacy users.

Manufacturing delivers 5G promise

5G mid-band applications will mostly be used to benefit the manufacturing, public administration/services, ICT and retail sectors across Europe. 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 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.