Capital investments will obviously be necessary to build the type of backbone required to support 5G’s intense service requirements and that money will be poured on the wireless end into everything from radios and new software to handsets. But upgrades to the underlying fiber infrastructure will also be key, and they won’t come cheap.
Deloitte this week said the United States will require investments totaling as much as $150 billion over the next five to seven years to get the nation’s fiber infrastructure up to snuff. Specifically, the firm said working fiber deeper (i.e. closer to the end customer) will be key to enabling broadband coverage in rural and underserved areas, as well as expanded entertainment opportunities, Internet of Things support, and wireless innovation.
Deloitte said fiber currently passes less than one-third of U.S. homes, and only around 61 percent of the rural population have access to high-speed fiber broadband. Around 10 million rural homes and 3 million urban/suburban homes do not have a high speed broadband connection at all, the firm added.
“It is essential that fiber gets deployed closer to the customer to enable next generation wireless and to ensure affordable high-speed connectivity across urban, suburban, and rural geographies,” says Dan Littmann, principal at Deloitte Consulting. “Motivating this investment requires the removal of legacy regulations, faster migration to IP networks, and new monetization mechanisms that allow carriers and investors to justify upfront investment in fiber.”
Deloitte said funds for the staggering investment will need to come from a combination of sources, which could include communications service providers, financial investors, and public/private partnerships. By way of example, the firm noted over-the-top players could team up with carriers to fund mutually beneficial deep fiber builds.
“As limited fiber availability constrains increased wireless densification and fiber broadband, over-the-top players may choose to fund fiber deployment, including owning assets or forming partnerships with carriers,” the report states.
Deloitte said its estimates for funding show “massive synergies” between the wireless and broadband fiber builds. But, the firm notes “with more than 60 percent of total costs for construction, permits, and design, fiber providers may need to share last mile access routes and rights of way where possible to realize such synergies.”
The full report can be found here.
