The proliferation of 5G provides cities with an “unprecedented opportunity” to generate new revenue streams and drive digital equity, according to a new report from Guidehouse Insights. However, misinformation about 5G remains a challenge, the analysts say.
5G revenue models include leasing infrastructure such as buildings and light poles to host small cells and – for cities that own it – leasing fibre.
While the figures will be different in each case, the analysts estimate that 5G could bring in revenue to the value of one to two percent of a city’s annual budget.
Richelle Elberg, Principal Research Analyst at Guidehouse Insights, told capitaltribunenews.com: “While that may not sound like a lot, it’s really kind of ‘free money’ if they already have the fibre network because there are very few costs associated with leasing that excess capacity.”
As new federal funding comes into US cities, many will be looking for revenue-sharing models and public private partnerships to ensure a return on their investment. The City of Baltimore and Erie County, for example, have both outlined plans to build open access fibre networks. However, some US states still prohibit local governments from building their own broadband networks.
5G and digital equity
Following the pandemic, which sparked a renewed push for digital equity, cities will be keen that 5G’s rollout does not exacerbate the digital divide they are working to close. Local governments could have the upper hand here, the analysts say.
Elberg commented: “For the first time, carriers are more dependent on the cities to allow them to access those infrastructure assets for network deployment and densification, so there’s an opportunity for cities to use that leverage to ensure that economically disadvantaged neighbourhoods are covered as equally as more prosperous neighbourhoods.”
Shaun Fernando, Consulting Director at Guidehouse, added: “A lot of cities and states still tend to be technology-centric. It’s right to consider that aspect but really what they’re trying to solve is digital inequity, and technology is just one of the solutions that gets you there. There are also a range of other factors which need additional consideration such as credit worthiness, education and digital literacy training.”
The experts also warned that unfounded misinformation and concerns about adverse health impacts from 5G could pose a threat to rollout.
“Some of our clients are actively fielding questions and facing quite vocal opposition to 5G,” said Fernando.
He said education from cities and counties is important, including on the economic and connectivity equity benefits 5G can bring.
The report urges cities to partner with communications service providers to monetise municipal assets such as streetlights, utility poles, and fibre networks and work with utilities for shared benefits and monetisation of utility rights of way and other assets.
Cities should also leverage communications infrastructure vendor expertise in planning and deploying networks, the report advises.
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