Research explores economic benefits of full-fibre and 5G at local level

The benefits of 5G are not expected to be felt uniformly across the UK, with research commissioned by the Broadband Stakeholders Group (BSG) suggesting location-specific factors will dictate how much areas gain from having access to the technology.

The research, carried out by consultancy Oxera, draws on existing empirical studies and reports on the impact of full-fibre and 5G connectivity, and focuses on its benefits in six main areas: existing businesses, new businesses, employment opportunities, consumers, local authorities and wider society.

For example, the study outlines how existing businesses can expect an increase in turnover of up to 3.8% per worker per annum, while local authorities could benefit from cost savings in the delivery of public services.

However, the impact on each of these six areas will largely be dictated by nine “differentiating area characteristics”.

These range from local labour market conditions and an area’s sectoral composition, to the baseline coverage of existing broadband and the area’s population density.

“The deployment of these networks will require discussions and action at local levels,” said Matt Shepherd, principal and infrastructure planning lead at Oxera.

“This study sets out how those local impacts can be thought about and assessed. This will enable those interested in this subject to think about what these impacts will be in their local area and, importantly, to develop strategies to realise those benefits.”

The report outlines how each of these characteristics can shape the benefits of 5G, both generally and through specific case studies.

For example, certain types of businesses are more likely to benefit from improved connectivity than others, meaning areas will experience 5G roll-out differently depending on their sectoral composition.

“Knowledge-intensive sectors are shown to benefit most,” said the report. “Education and health sectors have also been shown to experience larger-than-average productivity impacts of increased connectivity… [and] there is also a likelihood for full-fibre and 5G in particular to lead to productivity improvements in industrial and manufacturing settings.”

Therefore, an area with a particularly high density of knowledge workers will benefit more than area with a relatively low density.

Likewise, an area with a high concentration of manufacturing businesses, such as the West Midlands, where the UK’s first regional testbed for 5G is taking place, will benefit more than an area with a low concentration.

“Many reports already estimate the benefits that full-fibre and 5G can bring to the UK economy,” said BSG CEO Matthew Evans. “But what does it mean for Manchester, Merthyr Tydfil or the Midlothian hills?

“Without knowing the answer to this question, it is understandable that there is a disparity among authorities in how they engage with and approach builders of digital infrastructure. This report seeks to address that gap.”

Looking at the specific case study of Liverpool, which is at the centre of a 5G Testbed and Trials Programme designed to support improvements in the delivery of health and social care, the report said councils in large metropolitan areas could ease the cost of care without sacrificing the service.

The project is primarily focused on the trail of bandwidth-intensive applications that require very fast processing and rely on edge or cloud processing, which, for example, allows patients triaged in A&E to be sent home with a monitoring device that prevents them having to be admitted to a ward.

“Allowing people to return home from hospital sooner, or live longer in their own homes before going into care, can improve their wellbeing, as well as that of their families,” said the report.

“It can also ease a city’s budget – the cost of adult social care to the City of Liverpool is around £15,000 per person per annum.”

In 2018, the government announced that 15 million premises would be connected to full-fibre networks by 2025, with nationwide coverage planned for completion by 2033.

However, prime minister Boris Johnson recently announced plans for a full-fibre UK by 2025, eight years ahead of schedule, at the beginning of the conservative leadership contest.

5G is already in the process of being rolled out across the UK, with priority being given to major cities, by a number of mobiles network operators including Vodafone, EE and Three. The last of the UK’s four operators, O2, has already announced plans to launch its 5G mobile network in October 2019.