O2 UK forecast 5G will directly contribute more than £7 billion per year to the UK economy by 2026, outstripping the benefit of ongoing fibre broadband roll out.

In a study outlining the benefits of the next generation technology, the company predicted 5G would drive the creation of new industries and services including 3D video calls, smart home and health applications.

By the sixth year after launch, the operator said the UK economy would see a ripple effect which would create an extra £3 billion per year on top of the £7 billion direct contribution.

O2 UK CEO Mark Evans (pictured) said: “Mobile is the invisible infrastructure that can drive the economy of post-Brexit Britain. The future of 5G promises a much quicker return on investment than fibre broadband, and a range of unprecedented benefits: from telecare health applications to smarter cities to more seamless public services.”

The company’s bold forecast follows the release of the country’s 5G strategy by regulator Ofcom, which targets 2018 for pre-commercial deployment and full launch during 2020. To meet these timelines, spectrum auctions for suitable frequency bands will begin later this year.

Allocation of spectrum proved a controversial issue among the UK’s operators with O2 calling on Ofcom to impose limits on the new spectrum able to be acquired by Vodafone. This is in addition to the existing restrictions already placed on BT.

Discussing the upcoming auctions, Evans said: “We need a sophisticated spectrum auction that encourages the quickest and fairest deployment of mobile spectrum, with a regulatory environment that delivers a level playing field for businesses and supports a competitive market for customers.”