Mobile service providers won’t be the only ones with control over 5G Spectrum; it will turn into an easily tradable commodity
LONDON–(BUSINESS WIRE)–#5G–The envisioned 5G services in various verticals such as manufacturing, mining, and transportation, as well as the promise to provide substantially higher cellular download speeds for consumers, hold immense potential to transform society. These services are built on the three main categories of 5G services – enhanced mobile broadband speeds of at least 100 Mbps for all users, ultra-low latency and reliability, and massive machine type communications for internet-connected devices. To address these opportunities a wide range of radio spectrum frequencies from sub-1GHz to 100GHz including licensed, unlicensed, and shared spectrum must be utilized to unlock the potential of 5G, according to a new report from global tech market advisory, ABI Research.
“To achieve the full scale of benefits and a leading position in the 5G race, governments and regulators have to support and stimulate mobile network operators with a huge amount of continuous 5G spectrum. Affordable 5G spectrum will help to support economic growth, establish geopolitical superiority, and even gain advantages in terms of military and intelligence powers. Political decision-makers need to consider these long-term benefits and focus less on the short-term financial benefits during 5G spectrum allocations,” says Emanuel Kolta, Senior Analyst at ABI Research. Total mobile data traffic will grow from this year’s 306,000 Petabytes to roughly 1,500,000 Petabytes over the next four years. Providing enough spectrum is crucial to secure enough bandwidth to facilitate all that traffic growth. Ofcom in the UK and the FCC in the US are at the forefront of allocating spectrum for vertical industries. Their experience can provide several insights for other regulators.
Mercedes-Benz, Volkswagen, and Siemens have already expressed their need for a private 5G network which is proof that the demand for fast, low-latency, and reliable data delivery will skyrocket in the upcoming decade. However, the available bandwidth is limited by the availability of spectrum and the laws of physics. The telecommunications industry has two main options to keep up with the increasing demand: start to use new frequencies, such as millimeter waves, or increase efficiency in the frequency already used. 5G will become the “network of networks” and connect literally billions of new objects with different connectivity needs and data usage patterns. Thus, there may come a time when dynamic capacity trading and wireless broadband can slowly become a tradeable, valuable commodity. Right now, there is no marketplace for spectrum, and mobile service providers are buying licenses for five, ten, or twenty years and trying to use their assets in the most efficient ways. “As spectrum becomes an increasingly more valuable asset, spectrum trading will become more relevant, which will result in a more efficient outcome where the cumulative spectrum supply is higher, explains Kolta.
ABI Research expects that mobile service providers won’t be the only ones with control over this newly commoditized resource. Companies such as Rivada Networks are already starting to offer a dynamic spectrum trading platform. Regulators are expected to help vertical industries to access spectrum with respect to the mobile service providers and their investments. Those who can transparently provide access to relevant spectrum, at an affordable price will start from a better position.
“However, the long-term outcome of the 5G race is still uncertain. Beyond the obvious importance of direct, financial investments flowing into 5G infrastructure, an appropriate amount of 5G related, continuous spectrum is also critical to achieving a leading position in the 5G race,” Kolta concludes.
These findings are from ABI Research’s Making Spectrum Fit for 5G Services & Competition application analysis report. This report is part of the company’s 5G & Mobile Network Infrastructure research service, which includes research, data, and analyst insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis of key market trends and factors for a specific application, which could focus on an individual market or geography.
About ABI Research
ABI Research provides strategic guidance to visionaries, delivering actionable intelligence on the transformative technologies that are dramatically reshaping industries, economies, and workforces across the world. ABI Research’s global team of analysts publish groundbreaking studies often years ahead of other technology advisory firms, empowering our clients to stay ahead of their markets and their competitors.
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