The demands on mobile infrastructure are intensifying. More consumers and enterprises rely on mobile connections to stay in touch, conduct financial transactions, navigate the internet or enable machines to connect with each other. Mobile operators continue to invest in networks to support the growing volume of data traffic and in new technologies such as fifth-generation (5G) mobile technologies and the Internet of Things. But will the same level of investment be enough to keep up with demand for mobile connectivity?
The challenge, in a nutshell, is that while data traffic growth soars, the business case for mobile infrastructure investments is uncertain. Private investment, supported by government policies, continue to expand mobile infrastructure. Nevertheless, we have to acknowledge the presence of infrastructure frontiers. Historically, the policy debate has focused on expanding the coverage frontier beyond the economically feasible zone to areas with low population. But we should also now recognise a new frontier — the challenge of building fast, reliable, next-generation networks in megacities.
In the GSMA’s 2017 report, “Embracing the Digital Revolution,” five key enablers of the digital economy were identified, of which the core pillar is fast, reliable mobile infrastructure. In our 2018 report, “Delivering the Digital Revolution: Will mobile infrastructure keep up with rising demand?”,” we analysed the challenges of building next-generation mobile connectivity in areas with the highest population density.
Our analysis centres on four megacity archetypes. It predicts a significant gap between data demand and network capacity by 2025 based on current assumptions about technology advances, network configurations and financial constraints. Under these assumptions, close to half of the demand in 2025 may be left unserved in ultra-dense areas. Significantly higher network capital and operational expenditure will be required to fully serve projected demand.
Representatives of regulatory authorities, government agencies, multilateral organisations, technology providers and industry associations discussed these challenges during the Digital Policy Roundtable on Megacities: The Next Digital Frontier at Mobile World Congress 2018. Rethinking commercial models and infrastructure financing models, setting the right deployment conditions for network rollout and the interplay between spectrum prices and investment were highlighted as key topics. Participants noted the importance of alignment of incentives and cooperation between stakeholders to overcome challenges spanning spectrum, backhaul, institutional mindsets, demand factors and affordability. Multi-sectoral and multi-institutional collaboration were also called out as new frontiers.
While the industry is best placed to respond to these challenges, governments have an important role to play in setting the right policy framework for investments. Supportive policies — making additional, affordable spectrum available; facilitating deployment of backhaul infrastructure; providing access to cell site locations; allowing network sharing agreements; enabling small-cell deployment; and setting harmonised power density limits — will facilitate and incentivise infrastructure investment to meet consumer demand, both sparsely populated (rural) and densely populated (megacity) areas.
Cooperation between operators, verticals, regulators, ministries and local authorities is required to meet the rising demand. We need to act now to support the building of the networks of the future and unlock the associated economic and social benefits.