The path to 5G in the developing world: Planning ahead for a smooth transition
Deployments of fifth-generation (5G) mobile network technologies are taking off globally, with more than one billion connections reached by the end of 2022. This deployment includes 5G trials, licensing, and network deployments. Interest among governments in understanding the implications of this technology is rising as the numbers of base stations, use cases, and 5G subscribers continue to grow.
5G is a significant step forward in mobile broadband
The three main capabilities of 5G mobile technologies as compared with fourth-generation (4G) mobile network technologies are much higher speeds, lower latency (lag delay in data transmission), and enhanced capacity for connecting large numbers of users simultaneously with minimal interference. 5G’s flexible design enables technologies to be adapted to different circumstances and needs in both public and private campus network settings.
While maximum capabilities have yet to be fully achieved and commercialized, target capabilities include peak data rates of 20 gigabits per second, transmission latency of 1 millisecond, connection density of 1 million devices per square kilometer, and 100 times more network energy efficiency per data traffic as compared with 4G.
The key underlying technologies that enable this functionality include multiband spectrum usage, which can support different use cases; massive multiple input, multiple output technology and beamforming, which enable suppression of interference and higher spectral and power efficiency; mobile edge computing, which enables ultra-low latency; network virtualization, which allows for quicker system updates by virtualizing many functions; and network slicing, which enables one physical 5G network to operate as several customized virtual networks offering different services and performance characteristics to suit various purposes.
Some of these technologies are revolutionary; others enhance or scale existing 4G-enabling technologies. The deployment model of 5G—whether as a standalone deployment with a 5G core or a non-standalone deployment that integrates 4G core— also has implications for the availability and performance capabilities of these technologies.
5G will support digital transformation and can help developing countries meet the SDGs
5G represents a significant shift in the role that mobile networks can play in society. It builds on the capabilities of 4G Long-Term Evolution through improvements in the speed and performance of which 5G networks are comparatively capable. The increased emphasis on industrial and commercial applications in 5G could also enhance the productivity and performance of business and public sector organizations, particularly in developing countries where alternative forms of high-speed broadband connectivity or ways to connect high-density devices in different sectors are often limited. The potential of 5G is still being explored by mobile operators and industrial users.
These applications will develop over time as networks are deployed and users find new ways to integrate them into their processes. It is too early for reliable assessments of the economic value of 5G, because most use cases have not yet been fully tested—and are rarely being tested in developing country settings. However, the following are current areas of investigation that have potential for development:
• Precision agriculture, which entails real-time, micro-targeted optimization of inputs such as water, fertilizer, and pesticides to enhance farm yields, improve sustainability, and reduce waste along agricultural supply chains.
• Smart cities, which enable more sophisticated management of the urban space; closer integration of urban systems and services; and better management of perennial urban challenges such as sprawling urban development, congestion, pollution, and crime.
• Intelligent transport systems, which permit more proactive management of multimodal transport networks and services and growing reliance on autonomous vehicles, all of which can improve road safety as well as the use of passenger time and road space.
• Smart grids, which support the transition to a more flexible, decentralized, and renewable-based energy system while enabling a more sophisticated management of energy demand and increasing the efficiency and efficacy of infrastructure maintenance. Some of these applications are being developed using earlier generations of mobile technologies, but the enhanced functionality of 5G creates further opportunities for more sophisticated solutions. In some contexts, the optimal approach will be one based entirely on 5G networks. In others, it will be a combination of 5G and earlier generations. Although peculiar aspects of 5G’s technology and performance capabilities resulting from features like network slicing have generated much excitement, new use cases with 5G are difficult to predict, and the use cases that may unfold cannot be foreseen. As with earlier generations of mobile network technologies, commercial use cases drive transformational change, as was seen in the case of third-generation (3G) mobile network technologies and subsequent developments with handsets and applications.
5g network deployment will start in urban areas and is likely to coexist with other technologies
As with the previous generations of mobile technologies, 5G is capital intensive and will require network operators to invest large amounts in deploying the new networks if 5G is to deliver on the technologies’ target performance capabilities. This high level of investment is driven by the need for more base stations than with previous mobile generations, increased fiber backhauls to mobile sites, and a shift to multi-access edge computing, among other requirements. Despite these drivers pushing costs upward, some factors, such as network softwarization and infrastructure sharing, will reduce costs.
The economics of 5G mean that most deployments will initially be focused in urban areas, which are more commercially attractive than rural areas, particularly in developing countries. Industrial campuses will also be early adopters of private 5G networks, deployed alongside (or replacing) other modes of network connectivity. Applications of 5G networks in these campus settings could be a key driver of network deployments outside core urban areas. The speed of the deployment and the extent of 5G’s penetration into rural areas will vary by country. 5G fixed wireless access is one option for last mile solutions in areas where fiber or copper is limited, but its viability and value proposition will depend on a variety of contextual factors.
In middle-income countries and those where the population is more geographically concentrated, the coverage of 5G networks could extend further, including into semi-urban and rural areas. This expanded coverage would open opportunities for deeper digital transformation in both the public and private sectors.
5G’s high deployment and adoption costs can be reduced
The cost of 5G network equipment—as well as of handsets and user devices—is expected to decrease over time, as has been the case for previous generations of network technologies. Despite this reality, deploying a 5G network will remain expensive for developing countries; the cost has generated debate among policy makers and other stakeholders on its value proposition over 4G networks. The deployment costs can be reduced in various ways, including the following:
• Addressing spectrum costs. High-spectrum license costs can negatively affect the profitability of network businesses overall and may reduce incentives to deploy networks in financially marginal areas, which are often in rural settings. Governments must consider the trade-offs between increased revenue generated through spectrum sales and the potential implications for coverage and pricing of mobile services. Policy makers can improve spectrum efficiency by supporting innovative methods of spectrum sharing for both licensed and unlicensed spectrum, as well as by addressing the adequacy of available spectrum to support 5G’s performance capabilities. Clarifying pricing and criteria for reallocating bands and issuing technology-neutral spectrum licenses will help telecom operators transition from one service to another, thereby expediting 5G deployment.
• Upgrading network backhaul. The capacity of network backhaul—the links that connect mobile sites to the rest of the network—is a key constraint on overall network performance. A majority of mobile sites in developing countries use wireless microwave technologies for backhaul. These technologies are cost-effective and flexible, but they are also subject to limitations on network performance. Fiber-optic links are needed for backhaul if 5G is to meet its performance potential. The high costs of these technologies could be reduced through concerted efforts by governments and network operators, such as by leveraging cross-sector infrastructure sharing with the energy and transport sectors and the availability of right-of-way access.
• Sharing public infrastructure. The costs of establishing mobile sites are a major component of the overall cost of building a 5G network, largely making public land, buildings, roadside infrastructure, electricity transmission towers, and other types of infrastructure available to network operators.
• Enabling and encouraging network sharing. Regulatory frameworks that encourage network sharing can substantially reduce the costs of 5G. For many consumers in developing countries, the cost of 5G handsets is likely to be prohibitive for adoption in the early years of network deployment. Although the experience of handsets for previous generations of mobile technologies indicates that handset prices fall over time, 5G-enabled handset affordability will remain a challenge for low-income households for the near future. In most industrial and public sector applications of 5G, device affordability for end users is a less significant constraint on adoption.
5G potentially increases some types of risk that must be managed by governments and regulators
Cybersecurity risks, health concerns, and environmental risks may erode public trust and confidence in 5G networks. If they are not properly addressed or managed, these concerns could become an obstacle for 5G adoption.
• Addressing cybersecurity risks. The wider and deeper application of broadband in business and government applications using 5G networks also means that the consequences of cyberattacks on 5G networks could be much more far-reaching as compared with earlier generations of mobile networks. Despite the significant advances in establishing a more secure network architecture through intentional “security by design” features, 5G introduces new intrinsic vulnerabilities such as software flaws and supply chain risks. The increased data flows that 5G applications will yield will also increase the surface area vulnerable to various forms of cyberattacks. For countries with low cybersecurity capacity, the risk will be amplified considerably. It is expected that cybersecurity threats will continue to evolve as 5G networks and use cases are commercialized. Risks may also be amplified by the coexistence of 5G with less secure mobile generation networks such as 4G. This issue underscores the importance of governments setting and enforcing minimum security standards and increasing domestic capacity for managing cybersecurity risks.
• Managing environmental risks. Production and consumption of 5G technology may increase the carbon footprint of mobile networks and ICT systems more broadly if the increase in data consumption and device and equipment use exceeds the significant efficiency gains anticipated from 5G’s target technology capabilities. The increased data traffic over 5G networks will require significant data center capacity; consequently, the efficiency and sustainability of these data centers will play an important role in minimizing 5G’s overall carbon footprint. The associated accumulation of e-waste from antiquated mobile equipment and internet of things devices will further compound environmental harm. Despite 5G being designed according to stringent energy efficiency standards, especially when compared with previous generations of mobile networks, initial deployments have evidenced an upsurge in overall energy consumption due to the wider variety of applications. This issue raises important concerns about climate change for governments and industry. As of 2022, further research is needed for accurate measurement and forecasting of the net impact of 5G networks.
• Investigating health issues. Although public concerns about health risks from exposure to electromagnetic fields associated with 5G and other mobile technologies can be significant in some countries, concrete evidence directly linking the use of wireless devices to general health issues is lacking. As research continues, governments should actively update their guidelines on exposure to electromagnetic fields and enforce compliance based on the latest guidance and evidence produced by external bodies such as the International Commission on Non-Ionizing Radiation Protection, the International Telecommunication Union, the World Health Organization, and others. Even in the absence of any scientific evidence linking 5G networks to adverse health consequences, governments must address public concerns and manage communications if disruption is to be avoided. This work includes providing access to the latest evidence and research that has been published by the aforementioned organizations and other trusted institutions with expertise in this area.
Deployment of 5G networks can be facilitated through good policy
Governments can enhance their country’s capacity to deploy and adopt 5G in several policy areas, including strategic policy coordination, innovation ecosystems, competition policy, spectrum management, and regulatory frameworks.
• Define an integrated national vision for 5G. Countries should define a collective, strategic vision for how 5G can advance the national development agenda. Policy makers should devise their national 5G strategies to encapsulate assessments of their country’s position on each of the key building blocks of 5G, notably, the existing coverage of high-speed mobile broadband (4G), fiber-optic backhaul, spectrum policy, regulatory frameworks, and whole-of-government collaboration. The latter is important in the case of 5G to ensure that the policy implications, which affect a wide range of economic and social activities beyond the ICT sector, are considered in an integrated fashion. A national vision for 5G should also include a focus on demand-side initiatives, in consultation with the private sector and other stakeholders.
• Strengthen the innovation ecosystem. Where relevant to their economies, governments should encourage industry to explore, innovate, and develop business models that enable monetization of a 5G-enabled economy. Late 3G and early 4G adoption were driven by innovations in application software that earlier technologies could not support. Therefore, more innovation and focus on 5G-enabled services and applications that are not possible with 4G are needed, accompanied by policy design to strengthen the innovation ecosystem that can create an enabling environment to spur this exploration. 5G trials and dedicated testbeds and labs can be helpful tools because they focus on the entire process of business development and not just on the technology itself. Parallel experimentation is needed on the policy side through regulatory sandboxes and trial spectrum licenses, which can provide the private sector with the flexibility to innovate and the public sector with the opportunity to learn how to adapt to the regulatory environment. As with a national strategic vision, the development of a supportive innovation ecosystem for 5G should also focus on demand-side initiatives in consultation with the private sector and other stakeholders.
• Consider optimal market structure. In recent years, some countries have seen consolidation in the mobile market. One justification presented for this consolidation has been to allow operators to finance the capital investment required to compete. The investment implications of 5G have prompted renewed calls to allow further consolidation in some markets. The case for this is complex, and countries must consider carefully how to balance competition and investment incentives among mobile network operators in light of both the new competitive dynamics generated by 5G as well as the enhanced opportunities for significant cost savings from increased infrastructure sharing along with more flexible approaches to spectrum and licensing.
• Release spectrum early. Regulators should enhance institutional capacity to secure and release enough spectrum, including globally harmonized pioneer bands, while avoiding the risk of spectrum fragmentation that prevents 5G from delivering on design performance. Given that spectrum allocation will not only be of interest to traditional telecom operators but may also be relevant for industry verticals operating private networks, regulators must strategically balance competing demands for spectrum from new and incumbent users. The design of spectrum assignment methods, spectrum pricing, and spectrum licensing regimes all have a material impact on the viability of 5G networks and associated investment incentives. Regulators should be mindful of the transparency of spectrum assignments and the affordability of spectrum fees. Because 5G non-standalone deployment leverages existing 4G infrastructure, a technology-neutral approach to spectrum licensing is important, and allowing licensees to re-farm spectrum to use it in the most efficient way could achieve significant gains. To address increasing data traffic in 5G, spectrum authorities also should pay attention to the role of unlicensed technologies, such as next-generation Wi-Fi, and to balance the use of licensed and unlicensed spectrum in the spectrum management framework. Carrier aggregation within the same technology in different frequency bands and across various technologies will also need a flexible and forward-looking approach.
• Introduce regulatory flexibility. Providing greater flexibility for network deployment through regulatory accommodations is critical for reducing costs and improving the viability of network deployment. Facilitating access to passive infrastructure, such as buildings and streetlights, for sites through a supportive policy and regulatory framework will help ease network deployment. In addition, governments should improve the regulatory environment to support and encourage backhaul investment and infrastructure sharing among operators. Policy makers should focus on setting the enabling environment early, even while investment plans remain under deliberation, particularly given that most of the best practices that can ease the path to becoming a 5G nation also reflect best practices for general telecommunications policy and regulation. As the next generation of mobile network technologies, 5G is a significant step forward in terms of network capabilities. Its enhanced performance and ability to be integrated into industrial and commercial processes provide new opportunities and use cases for businesses and governments. However, as with previous generations of mobile technologies, the deployment of 5G infrastructure in the developing world may proceed more slowly due to structural impediments. These issues include the relatively low density of demand, the high costs of base stations and antennas, the limited availability of fiber backhaul, and the prohibitive costs of 5G-enabled handsets and associated data packages, as well as broader digital development challenges around digital skills, digital trust, and locally relevant content. Nevertheless, governments can do much through policy and regulatory measures to significantly reduce deployment costs, mitigate potential risks, and ease the path to a 5G future.
World Bank
