Deloitte Consulting became the latest to warn the US risks being overtaken by a tsunami of 5G deployments by countries in Asia Pacific, headed by China.
In a new study, the consultancy noted China deployed 350,000 new cell sites since 2015 compared with 30,000 in the US. It added infrastructure company China Tower added more sites in the space of three months in 2017 than US operators and tower vendors deployed in the last three years.
The advantage is key: Deloitte Consulting pointed out 5G will require three-to-ten times the number of cell sites found in operators’ existing LTE networks, making such densification efforts an important step towards the next-generation technology.
The report confirmed something stateside operators and industry associations have claimed for years: that slow, costly deployment processes are hindering progress in the US.
Deloitte Consulting found US operators would have to spend 2.67-times more than their Chinese counterparts to deploy the same amount of network capacity.
It concluded: “This disparity between the speed at which China and the United States can add network infrastructure and capacity bodes well for China’s prospects in the race to 5G and the services enabled.”
Risk and reward
Operators and governments are pushing hard to be the first to 5G since the technology is expected to deliver a substantial economic boost.
As Deloitte Consulting principal Dan Littmann explained in a statement: “The potential economic benefits of 5G will soon become a key differentiator for cities looking to attract both businesses and residents.”
However, the report noted the “promise of new revenue streams” from LTE deployments largely failed to materialise. Operators “all but abandoned the notion of revenue growth from LTE-enabled applications,” using the technology instead to lower the cost per-bit of data to maintain margins as traffic skyrocketed and ARPU dropped.
It warned operators must have a solid plan to monetise their 5G networks to avoid falling into a similar trap.