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Abu Dhabi, UAEMonday 10 December 2018

For 5G to succeed, coverage must take priority over revenue

Short-term gains can mean less access for under-served populations

John Giusti, chief regulatory officer of GSMA, sees huge potential in GCC telcos harnessing 5G in the future. GSMA
John Giusti, chief regulatory officer of GSMA, sees huge potential in GCC telcos harnessing 5G in the future. GSMA

As telcos work to make 5G a reality by 2019, the focus should be on expanding coverage to more people rather than on the short-term potential revenue generated by the network's premium cost, the head of a mobile interest group cautioned.

"Spectrum [the term for a mobile network] is a national resource and historically it is assigned through mechanisms such as auctions,” John Giusti, chief regulatory officer of the Global System for Mobile Communications Association, told The National.

Those auction prices are often tied to short-term revenue targets that can result in fewer people being connected. Shifting to a long-term approach would mean more robust 5G infrastructure and a far greater number of people with coverage, he said.

5G is expected to support significantly faster mobile broadband speeds and heavier data use than previous generations while enabling the full potential of the Internet of Things. From autonomous cars and smart cities to the industrial internet, 5G will be the linchpin for the future of communication.

By 2025, 5G will account for 16 per cent of total connections in Mena markets, says GSMA, a trade body that represents the interests of global mobile networks.

Telcos in the UAE stand to gain an additional $3.3 billion in revenues by 2026 from the digitalisation of industries through 5G, a report from Swedish technology company Ericsson says.

bz0212 mobile internet
bz0212 mobile internet

Mr Giusti said that having an affordable spectrum for 5G deployment was a global challenge.

“Historically, we have seen auctions decide who will get the spectrum and the prices are being driven to very high levels,” he said.

“Mobile operators and governments have common goals to connect people and deliver innovative services. But the challenge is to align their policies to meet these goals.”

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In the past, he said, fierce competition to offer mobile access in unconnected areas drove connectivity "to unprecedented levels". But those gains were supported by commercially sustainable models

5G needs more innovative solutions or government support to make it commercially viable, especially in areas that lack coverage, or the network risks not being able to serve populations at scale and instead will be the purview of wealthy corporations and nations.

If telcos must buy 5G access at a premium to 4G then they will not pursue wider coverage, only focusing on those areas that will offer lucrative returns quickly - leaving large sections of the population with no 5G connectivity.

But if governments auction 5G access at subsidised prices, Mr Guisti said, then operators can invest more in spreading the coverage area to a wider audience - a long-term win for economic growth.

An offline population remains offline due to "lack of digital skills, relevant content and affordability, that is often driven by high taxation", Mr Giusti said. "Reaching offline people requires evolving of creative solutions between governments and industries.”

GSMA estimates suggest countries in the Arabian Gulf are expected to launch 5G mobile services in the next two years.

“The GCC is putting itself on par with 5G leaders like the US and South Korea. They have higher ambitions than many other regions but perhaps greater challenges. One of the major hurdles is higher spectrum fees than other global markets.”