A report from Barclays Corporate Banking suggests 5G could add £15.7 billion to the UK economy by 2025 but only if network deployment is done faster.
While progress is being made, the Barclays team forecast the current rate of deployment would add £13 billion to UK businesses, though any hurdles could drop this figure to £8.3 billion. By 2030, the size of the UK economy could be increased by between 0.88% and 1.54% compared to a situation where no national 5G network. The middle-ground, development continuing at today’s pace, is an increase of 1.09%
For a country which is courting with controversy and potential regulatory hurdles, this does not necessarily paint the brightest of pictures. But of course, this is entirely dependent on whether UK businesses actually know what 5G is and what can be achieved with the upgraded infrastructure.
“The rollout of 5G offers a huge opportunity for the UK,” said Sean Duffy, Head of TMT at Barclays. “We’re seeing massive potential for business growth, which ultimately delivers a positive knock-on effect for the whole economy.
“While the Government and network providers are already working hard to introduce 5G in the UK, we found that businesses do not yet have enough clarity about how they will benefit in the long-run. What’s more, nearly four in ten business leaders still aren’t entirely sure what 5G is.”
The education issue is perhaps pinned to the telco industry itself. Not only have the telcos been slow to engage potential customers and develop specific usecases, the industry spent years plugging the main benefit of 5G as ‘bigger, faster, meaner’. Both of these points have led to the issue being raised by Barclays.
On the speed side of things, the industry has moved away from plugging faster networks as the primary benefit of 5G. The networks will of course be faster, but the latency and throughout benefits are seemingly becoming much more important. Perhaps this is also a realisation that selling 5G on speed alone will not recoup the vast financial outlay.
In terms of engaging specific industries to develop tailored usecases, this is also being corrected, though European telcos and customers are years behind counterparts in Asia. Whether this has any fundamental impact on digital economies moving forward remains to be seen, as there is still time to catch up while the deployment of 5G continues.
During Mobile World Congress Shanghai two years ago, this point was painfully obvious. At conferences in Europe, telcos were still bickering about the point of 5G, while in Shanghai, almost every operator had vertical specific usecases emblazoned across their stands. The difference is approaches was quite staggering.
That said, progress has been made. According to the Barclays research, 58% of businesses are already benefitting from fast communications technology like 4G and ultrafast broadband, quoting the gains being (1) operating across disparate locations (59%), (2) communicating with customers (49%), and (3) connecting multiple machines and devices (48%). At least the majority are already experiencing the benefits of improved connectivity and should, theoretically, be primed for 5G.
Worryingly however, the research also suggests that while awareness might be high, only 9% are allocating ‘significant’ funds to prepare themselves for the 5G era.
Another very upsetting sign for the UK is uncertainty. This might create obstacles to slow the deployment of the networks and ultimately the economic benefits to the UK. And what is creating this uncertainty; Brexit and Huawei.
Brexit is a tiresome topic, but the current political landscape is not encouraging any form of certainty. This will impact enterprise customers appetite to invest. And in terms of Huawei, the Government’s oversight board has not called for a ban, though it certainly hasn’t completely ruled it out either. Such is the importance of Huawei as a supplier to UK communications networks this uncertainty will make telcos nervous.
The UK is promising the world it will be a leader in the digital economy of tomorrow, but it is proving to be the architect of its own downfall. The Government, telcos and customers are all contributing to this gloomy scene. It’s all very British.