← External Forces: Digital & Technology (all topics)
Network generation upgrade (4G to 5G)
What it is
Each mobile network generation requires new spectrum, new radio equipment and far denser site deployment, because higher frequencies carry more data over shorter distances. 5G needs several times more cell sites per unit of coverage than 4G
The operator funds the capex years before the revenue, which is the recurring problem of every generational upgrade
Impact on industries
- Drives a large equipment, fibre, tower and power cycle - densification means more sites, more backhaul and more energy per subscriber served
- Fixed wireless access is the clearest monetisation route, selling broadband over spectrum already deployed for mobile
- Mobile 5G has largely been given away as a promotional inclusion, so the capex has not been monetised through tariffs
- Capex precedes revenue by years and is funded by balance sheets already carrying spectrum and licence liabilities
- Enterprise applications and network slicing are the promised return, but enterprise revenue remains small relative to the investment