5G - The Next Big Thing for UK Infrastructure?

Written By Andrew Clark

There’s been a lot of buzz about 5G for a while now. And rightly so. It’s the next generation of wireless technology and will represent a colossal step change in what we’ve come to expect from mobile connectivity so far. 5G speeds will be up to 100x faster than 4G [1]. To put that into perspective the jump from 3G to 4G in 2012, which was considered a breakthrough at the time, was only a 3x increase and revolutionised how we interacted with our mobile devices [2].

Maximum download speed across the generations

Maximum download speed across the generations

Speed is not the only measure that will be seeing significant improvements. 5G is also expected to provide:

  • Higher capacity: the ability to connect very large numbers of devices. The struggle to get a phone signal at a festival or sports event will soon be a thing of the past.

  • Lower latency: fast signal response times, e.g. between clicking on a website and waiting for it to load. 5G response times will feel instantaneous and will be important in unlocking applications like autonomous vehicles and virtual reality.

Well, that all sounds fantastic but 5G was launched in the UK back in 2019, and we haven’t seen dramatic improvements in any department. This article looks into the infrastructure behind 5G to find out why.

5G in the UK

Before we dive in, let’s get the lay of the land with regards to mobile infrastructure in the UK. There are four mobile network operators (MNOs): Vodafone, Three, O2 and EE. Together they operate around 50-60,000 base stations [3] across the UK and are collectively responsible for the rollout of 5G.

The UK’s four Mobile Network Operators (MNOs)

The UK’s four Mobile Network Operators (MNOs)

These companies are having to invest heavily to ensure they meet the government’s target of having the majority of the population covered by a 5G signal by 2027 [4]. To get an idea of the scale of these investments, the total license fee paid (to Ofcom) for the airwaves that are used to transmit 5G thus far is around £2.75bn [5]. And that’s just to transmit a 5G signal – it doesn’t include the hefty and necessary costs of upgrading the existing mobile infrastructure that make it possible to transmit a 5G signal in the first place.

As friends of the construction and infrastructure sector, this raised our eyebrows… that’s a lot of money to be committed to infrastructure that hasn’t been built yet. Where money leads, infrastructure will surely follow. So, what infrastructure deployment will there be to support 5G rollout in the UK? What needs to be built and when? And is this an attractive prospect for UK infrastructure?

5G Deployment Strategy

Phase 1 – building off existing infrastructure

Detailed roll-out plans are not publicly available, but it’s clear that all MNOs are initially focussing on 5G deployment on existing mobile infrastructure. That is, attaching 5G equipment to 4G masts. This is to support 4G in providing additional capacity in areas of high demand, typically in big cities and other urban areas.

Maps showing that initial 5G deployment has largely been capacity driven

As of the end of 2020, only 3,000 base stations were equipped with 5G [6]. That means only 5-6% of the UK’s base stations were 5G enabled at the beginning of this year. Clearly, 5G deployment is still in its infancy in the UK and it will likely take until the middle of the decade for Phase 1 to be completed.

Phase 2 – network densification through small cells

The price 5G pays for being able to provide all the fantastic improvements discussed at the beginning of this article, is that it can’t travel very far. More base stations referred to as ‘small cells’ are therefore needed to boost the signal. These low-powered base stations are much smaller and lighter and can be mounted in more places, e.g. on lampposts, street corners and building rooftops.

The UK government suggests that 200,000 small cells could provide outdoor coverage in most urban areas, with capital deployment costs in the billions [4]. The installation of these cells on urban sites will necessitate a new supply chain ecosystem with mobile infrastructure providers having to work closely with local authorities, street works contractors and fibre providers (each small cell will require a full-fibre broadband connection).

This phase is likely to ramp up towards the end of the decade and represents an attractive pipeline of work available to the UK infrastructure sector. The increase in spending associated with these deployments is definite, although the scale and timing are still uncertain with it ultimately being driven by consumer demand.

Number of 5G base stations at varying stages of deployment timeline

Phase 3 – new deployment models to support emerging 5G use cases

The infrastructure deployed in Phases 1 and 2 barely scratches the surface of that which will meet the needs of all potential 5G use cases. For example, autonomous cars will likely require the expansion of 5G networks outside of urban areas, along motorways and main roads across the UK. Some use cases may even require dedicated private networks, separate from those operated by the MNOs, which could represent a lucrative overbuild opportunity for infrastructure contractors in the long term.

Conclusion

5G deployment looks to offer an attractive amount of work to the UK infrastructure sector, in both the short and long term. As per the government’s digital strategy, its rollout will run in tandem with that of full-fibre broadband, with the latter already well underway.

The relationship between 5G and fibre should not be overlooked, as full-fibre connectivity is a fundamental precursor to an effective 5G network. As fibre build plans draw to a close in the coming years, we expect 5G build to be the logical next step for many UK infrastructure contractors.

So, while 5G was launched back in 2019, it will take some time for the full infrastructure to be in place to make the benefits discussed at the beginning of this article a reality. As Phase 1 is completed, we will surely see improvements in connection speeds across the country and better signal at crowded events, but it won’t be until the conclusion of Phase 2 that ultra-reliable, super-responsive connections become commonplace.

Deecon has extensive experience across fibre and mobile telecommunications, having lead projects for telco, infrastructure and private equity clients. Please explore our case studies to find out more about the projects we’ve been involved in and if you think your organisation could benefit from Deecon’s expertise please get in touch. You can read more about our full range of services here.

Andrew Clark https://deeconconsulting.com
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