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Who Will Fund 5G? Strategies for Cost Optimization Among Various Stakeholders

The future of communications, manufacturing, logistics, and other sectors is expected to be revolutionized by 5G technology. However, the question of who will bear the cost of its deployment, integration, and development remains unclear.

Billions have already been spent on 5G infrastructure, development costs, and spectrum auctions worldwide. Yet, the commercial viability of a widespread 5G launch in the short term is uncertain. With unclear benefits, no single stakeholder is prepared to shoulder the financial burden alone. Instead, different parties are passing the responsibility to each other, expecting others to lead the way.

The key players in the 5G arena who could potentially help speed up 5G deployment include Mobile Network Operators (MNOs), large industrial businesses, governments, device builders, and users.

MNOs are expected to lead 5G deployment. However, the uncertain potential returns from 5G, particularly for vertical sectors, have made MNOs reluctant to cover all costs alone. Some aggressive deployments have been seen in South Korea and China, primarily driven by government support and financing.

Large industrial businesses are hesitant to make significant investments due to the lack of tested use cases for 5G benefits. This has created a vicious cycle – companies are not investing because there are no proven use cases, and there are no proven use cases because companies are not investing.

Governments could potentially lead the funding for 5G due to their high social responsibility and the benefits they would reap from its implementation in sectors like healthcare and education. However, most governments have not actively participated or supported other parties by investing directly in 5G deployment.

Device builders like Ericsson, Nokia, and Qualcomm are already heavily invested in 5G and are participating in research programs and field trials with mobile operators worldwide.

Finally, society at large stands to benefit from the widespread launch of 5G. However, it is unrealistic to expect citizens or non-governmental organizations to finance any part of the expenses related to the 5G rollout.

The bottom line is that all parties will have to share the cost of 5G. A coordinated effort is needed to overcome this hurdle, and this requires all stakeholders to engage in a discussion on driving the 5G funding project forward. This discussion will be attempted at this year’s digital 5G Techritory conference on November 11 and 12.

Neils Kalnins, the Director of 5G Techritory and the Director of Development and Custom Management at the Electronic Communications Office of Latvia, authored this article.

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