Date
16 July 2018
To find the extra cash for 5G rollout, some mobile operators are looking to shut down 2G and 3G networks to reduce their costs. Photo: Bloomberg
To find the extra cash for 5G rollout, some mobile operators are looking to shut down 2G and 3G networks to reduce their costs. Photo: Bloomberg

Mobile industry capex seen rising to 16-17% of revenue on 5G

As telecoms players prepare for 5G, the sector will see capital expenditure rise to 16 to 17 percent of revenues from 2020, from 15 percent now, according to an industry association.

Over the three years between 2018 and 2020, GSMA, a trade body that represents the interests of mobile network operators worldwide, estimates capex on mobile networks worldwide will be around US$500 billion, Reuters reports.

Mats Granryd, director general of GSMA, which represents nearly 800 operators and some 300 suppliers, was quoted as saying that rollout of new networks will come at a price.

To find the extra cash for the 5G rollout, operators are looking to shut down 2G and 3G networks to reduce the costs of running multiple networks and to free up spectrum for 5G, the report said.

Though the industry is gearing up for 5G, most consumers will wait years to experience the benefits.

While the first commercial 5G projects will launch in the US in 2018, many users in emerging markets are still awaiting 4G and are likely to have to grapple with 3G connections for years more, the report said, citing industry insiders.

Norway’s Telenor, which is testing uses of 5G in driverless snowploughs, traffic systems and even autonomous boats for the fishing industry, remains cautious about what the technology will offer.

“5G is, so far, too much hype, in the sense of its position as a new revolutionary technology,” the company’s CEO Sigve Brekke told Reuters at Mobile World Congress in Barcelona.

“I look at 5G as much more an evolution on what we already have,” he said at the conference.

The first commercial 5G projects will launch in the United States this year and will be followed by Japan and South Korea in 2019. China is expected to join the fray in 2020.

But in Europe, deployments will start slowly in 2020 with wide-scale moves not likely until 2025.

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CG/RC

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