There have been growing calls across the Caribbean region for mobile/cellular carriers to implement 5G technology, and there appears to be an expectation that realisation will be imminent. However, a number of issues need to be addressed. We outline five of them.
Although, we had been hearing about 4G (Fourth Generation) mobile/cellular technology for over a decade, and the first wave of 4G LTE installations occurred in the Caribbean over five years ago, it could be argued that it is still not (yet) the de facto standard across the region. However, policymakers, and to some degree, the public at large, are eager for the next generation of mobile technology – 5G – to be rolled out.
Although countries worldwide are excited by the prospects of 5G, only a handful of countries have either deployed the technology, are in the process of trialling it:
- China – which has the world’s largest 5G network, and there is a concerted effort to deploy 5G as quickly as possible
- South Korea – which trialled 5G in the lead up to and during the 2018 Winter Olympics, in Pyeongchang, South Korea, and has been experiencing exponential growth in that segment of the market
- United States of America – where in 2018, Verizon began to deploy a non-standards-based 5G, which transitioned to a standards-based 5G operation the following year.
- Germany and the United Kingdom – where local carriers started to deploy 5G over the course of 2019
- European and Nordic countries – there are several countries that are in the process of deploying 5G, with launch announcements likely either during the course of this year, or in 2021.
Closer to home, and with the popularity of mobile/cellular broadband service, and the increasing demand for faster transmission speeds and greater bandwidth, there appears to be an expectation that 5G roll-out in the Caribbean region is imminent. However, here are five reasons why it may much further down the road than we might realise, or want to admit
1. Carriers are not prepared to foot the bill
Deployment of 5G requires a radical overhaul of the existing infrastructure. The needed upgrades would not be limited to equipment at the exchange, but also a considerably higher density of towers and equipment in the field. In summary, considerable sums of money would be required.
However, based on the operating challenges that many of the larger carriers in the region have been experiencing, which has resulted in declining revenues and profits, companies, such as Digicel and Flow, appear to be reluctant to commit to deploying 5G. Further, Digicel already has some large debts looming that it is struggling to manage, and may not be able to manage any further debt into the foreseeable future.
2. Caribbean governments don’t have the funds
This is a fact applicable to most Caribbean countries: their economies are not robust, revenue is limited, and without access to external funding, governments would not be able to undertake the numerous capital-intensive projects that developing countries need. As a result, and with regard to telecoms, virtually all Caribbean countries have relied on the infrastructure carriers and service providers to finance and build out the telecoms networks and services that individual countries, and the region as a whole, enjoy.
Hence, although Caribbean governments might be clamouring for 5G to be rolled out in their respective countries, they expect the telecoms to undertake – and foot the bill for – that deployment. However, in relying on private, commercial companies, the numbers have to make sense: the business models need to, at the very least, demonstrate a viable outcome.
To that end, companies, such as Digicel, have already indicated that with respect to realising 5G, they expect Government to step up their involvement: to not only ensure the legal and regulatory framework adequately supports that technology, but also with regard to providing financial support towards deployment (Source: Jamaica Observer).
3. Radio spectrum challenges
Following from the 2019 World Radiocommunication Conference, many Caribbean countries are in the process of updating their national radio spectrum plans to ensure that the requisite frequency bands are available and allocated to 5G and other emerging technologies. Once that process is completed, it may be necessary for existing allocations and assignments to be rationalised, and for frequencies that have already been assigned, but perhaps are not actively being used, to be relinquished. However, the bigger issue for most mobile/cellular companies, as highlighted by the country manager of Flow Jamaica, is the prices and pricing models that will be adopted for 5G frequencies.
Historically, the sale of radio frequency bands was a lucrative initiative for countries. However, in recent years, spectrum auctions worldwide, and even in the Caribbean, have failed, as bidders were not prepared to pay the reserve price – the minimum governments expected for the sale.
Hence, with the pricing models not yet agreed, and the current uncertainty about the extent to which 5G spectrum will be affordable, Caribbean telcos may not yet be in a position to complete their business models, and to begin to make serious plans for 5G roll out in the region.
4. Costly real estate
In order to be able to provide more robust, high speed access, consistent with 5G standard, the infrastructure requirements are considerably more complex than for a 3G or 4G network. An important element that is likely to challenge mobile/cellular network operators, is the considerably higher density of towers that would be required to achieve 5G.
However, real estate is expensive and it continues to appreciate. It may thus mean that acquiring property, and/or negotiating access to property, upon which towers are to be situated, could be an expensive and a protracted process. Further, there are lingering concerns about the radiation risks from mobile/cellular towers, which increasingly, will be located in very close proximity to citizens. Hence, real estate costs, and health concerns could become a major stumbling block in the deployment of 5G in the Caribbean.
5. Potential pricing challenges
Finally, and a likely and problematic outcome in efforts to implement 5G in the region is the disconnect between the cost of deploying, maintaining and upgrading the infrastructure, and the rates charged to customers, in order for the telcos to not only recover their costs, but also realise some reasonable return on their investment. To a considerable degree, most Caribbean countries do not have the economies of scale that could make such an investment viable. Further, and when coupled, with the high cost of doing business – which is a symptomatic of Small Island Developing States – the situation becomes even more acute.
In order for 5G to be affordable – and not further exacerbate the existing digital divide – costs would need to be managed, which not only points back to the first and second points, but also the conundrum that is likely to exist.
In summary, the above are just are just a few of the issues that are likely to hinder 5G deployment in the Caribbean region. At this juncture, national and regional stakeholders are just beginning the conversation. However, there are many likely challenges that need to be highlighted and discussed, and for which solutions will need to be found. Truthfully, all that can really be said is ‘watch this space…’.
Image credit: Manuel Geissinger (Pexels)
Good points raised. Indeed it is a big hurdle to venture into this kind of technology for telco players in these regions ( not to mention Africa ).
Probably it can also be added that those countries ahead of this technology have their telcos owned by their governments. And there is no doubt the “bottomless pockets” of these governments are bankrolling the projects.
Even where these telcos are not fully owned by their respective governments, it is more often the case than not, that they used to be owned by government before being privatised: meaning, they inherited robust infrastructure that initially was secured by government.
Hopefully as the technology comes full circle, it will get affordable for all to implement. Because it is the technology of the future, if it won’t be superseded by something affordable and better.