Returns on agricultural output could be seven fold
Africa is paying the price of hesitance over 5G, according to The Future Value of Mobile in Emerging Markets. The return on investment made by its ‘emerging economies’ could be seven times the amount they paid for 5G equipment, says management consulting firm Analysys Mason (AM), which compiled the report on behalf of equipment vendor Ericsson. The study looked at the growth domestic product of 15 countries across the world that could be classified as ’emerging national markets’, including South Africa and Nigeria.
The top line conclusion is that any growing economy, such as those in Africa, could grow between 0.3 and 0.46% more between now and 2035 if they invested in 5G technology. This projection was made by AM on the basis of the potential economic, consumer and environmental benefits of 5G connectivity to the sample group, which comprised ’emerging’ nations on every continent outside Europe. With the right regulatory and government support, mobile broadband and fixed wireless access (FWA) alone could stimulate consumer demand, boost industrial output and improve public services to move the entire national economy upwards by nearly 0.5% in GDP terms.
Though the sample group was a mixed basket of economies, ranging in size from Bangladesh to India, the world’s sixth biggest economy, the one unifying trait is that Agriculture is a crucial sector- accounting for up to 10 percent of GDP in some markets. The report estimates that enhanced rural 5G coverage could deliver up to 1.8 percent uplift in long-term GDP from agriculture. 5G will also promote sustainable farming methods, increase efficiency and reduce agricultural waste.
Expanded Mid-Band 5G coverage is identified as the key factor in the delivering about 80% of the promised economic benefits. Improvements to Smart Industry and Smart Rural clusters can account for 90% percent of the total economic benefits in each emerging market. The social benefits of 5G will be greatest from 5G-based FWA, smart factories, freight and logistics, agriculture and health.
AM’s figures suggest 5G mobile broadband can generate consumer surplus between €1-10 billion per country, with coverage extension giving 20-30% extra consumer surplus. The baseline 5G investment needed would be €3-8 billion per country with an additional 20-35% required to extend coverage. The report expounds further on how spectrum, installation and economic miracles can be achieved.
“This report provides a detailed breakdown, based on comprehensive research into realistic and achievable scenarios in each of the 15 countries, of the potential economic, social, environmental and national benefits of 5G in these markets,” said Andrew Lloyd, Head of Government and Policy Advocacy, Ericsson.
With the backing of governments, regulators and policy makers, each of these 15 countries, and their citizens, stand to benefit significantly from 5G connectivity, said Lloyd, who said climate impact, social inclusion and the digital divide could be ended in areas where fixed infrastructure availability is poor.
“The study highlights the benefits from having the right spectrum available for 5G deployment,” said Janette Stewart, Partner, Analysys Mason.