Moody's Downplays 5G Expectations, Citing Cost Concerns

The fifth generation of mobile networks will be an improvement over the existing technology but not one that can be deemed "revolutionary," analysts at Moody's concluded as part of their latest 5G deployment report. While the bond credit rating company originally released its in-depth look at the wireless industry last year, it's still standing by its projections in their entirety and claims they continue to apply to all industry members in the United States, including those attending the ongoing Mobile World Congress in Barcelona, Spain. The New York City-based firm expects 5G to be an extremely expensive endeavor for everyone in the industry that won't pay off for years to come.

According to Moody's estimates, a national 5G footprint is likely to cost each individual carrier between $10 and $30 billion in capital investments. The main culprit for such a massive barrier to entry is the very nature of the next-generation connectivity that will require extremely dense networks supported by millions of small cell sites. The cost of deploying and maintaining such equipment is unprecedentedly high given the compact physical footprint of individual small cells, like most carriers repeatedly complained about in recent times. Americans outside of large metropolitan areas also shouldn't expect to benefit from 5G connectivity anytime soon as mobile service providers are likely to exclusively focus on buildouts in areas with established fiber infrastructure, as per the same report. While all four national carriers are vowing to become the first to commercialize 5G connectivity, they don't appear to be as focused on what their competitors are doing as was the case with previous generational shifts, Moody's suggested.

The technological requirements of 5G are hence likely to limit such infrastructure to urban areas for the foreseeable future and not all regions will be equally prioritized by the four largest carriers whose strategies remain relatively unique, the analysts believe. New networks are also unlikely to ultimately reach more than half of the U.S. population due to the high costs associated with them, Moody's concluded, adding that 5G will hence be more evolutionary than revolutionary. Not all industry watchers agree with such conservative estimates but even those that do are quick to point out that from a technological perspective, 5G will enable a wide variety of new use cases and potentially change the global economy as a whole.

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Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]