Deloitte: Want 5G? Invest in Deep Fiber!

5G is sexy. Beefing up the U.S. fiber optic infrastructure? Not so much. But, you can’t have one without the other, said Deloitte in a recent Perspectives article.

“5G relies heavily on fiber and will likely fall far short of its potential unless the United States significantly increases its deep fiber investments,” Deloitte stressed in the article. 

Currently, Deloitte elaborated, the U.S. lacks necessary fiber density to support 5G speed and capacity requirements, given the greater network densification involved.

“Carriers will deploy many more small cells, ‘homespots,’ and hotspots in higher frequency bands, with a coverage radius measured in meters rather than kilometers,” Deloitte explained. “Without more deep fiber, carriers will be unable to support the projected 4x increase in mobile data traffic between 2016 and 2021.”

Deloitte said that investing in deep fiber is an economic, technological, and social imperative, with other motivations including:

  • Increase broadband service choices for residential and business customers
  • Close the ‘digital divide’ by bringing high-speed broadband connections to consumers no matter where they live, at affordable prices

How much will the U.S. need to invest in fiber to to address broadband competition, rural coverage, and wireless densification? Deloitte puts the figure at $130-$150 billion over the next 5-7 years. Potentially, that investment would come from a variety of sources, such as financial investors, communications service providers, and public/private partnerships. Problem is, right now there aren’t sufficient market incentives to make it happen.

So, how to square the circle? Deloitte suggests new monetization schemes for last-mile access to justify investing in fiber. Some potential models:

  • Synergies between deep fiber and adjacent services (e.g. offer integration, network security, and traffic management services)
  • Partnerships between carriers and over-the-top (OTT) players
  • Deep fiber as financial investment (e.g. fiber as leased real estate is a way for carriers to maximize asset utilization)

Deloitte stressed that carriers and policy makers share responsibility for addressing the fiber shortage. And, there’s no time to waste.

“Carriers are already making 5G investment decisions; ambiguous or delayed legislation may lead carriers to commit to investments that are inconsistent with the goals of increased network densification, greater broadband competition, and closing the digital divide,” Deloitte said in the article. “

“Without rapid and decisive action, the costs to recover may soon become insurmountable.”

Well, now there’s a call to action!