Requirements - 5.3.1

Deploying 5G technology involves significant costs known as capital expenditure (CapEx). This includes spending on new radio equipment, network upgrades, and the fiber backhaul necessary for 5G to function effectively. Many operators in low-to-middle-income countries (LMICs) struggle to afford these investments due to existing debt and limited financial resources. Therefore, the financial aspect poses a serious challenge when trying to implement 5G networks in these regions.

When telecommunication companies want to operate a 5G network, they need 'spectrum licenses,' which give them the right to use specific frequency bands. The cost of obtaining these licenses is often high, and winning them at auction can consume substantial resources. If companies spend too much on spectrum, they may not have enough money left to build the necessary infrastructure to support their new service, leading to deployment delays or limitations.

Average Revenue Per User (ARPU) is a crucial metric for telecom operators, especially when evaluating their service offerings. In LMICs, consumers tend to have lower incomes, which means they spend less on mobile services. Consequently, telecommunication companies may find it challenging to generate enough revenue to justify their large investments in 5G. This situation complicates financial planning because they need to ensure that their new services can be profitable over time.

For individuals to access 5G services, they need devices such as smartphones that are capable of using this technology. However, the price of 5G-compatible devices can be high, which may prevent many potential users, particularly in less affluent regions, from adopting 5G. Even if 5G networks are available in their area, the lack of affordable devices can significantly slow down the growth of 5G adoption.

5G technology introduces many advanced applications that can revolutionize industries. However, in many LMICs, the demand for these sophisticated services may not yet exist. Instead, people's immediate need often revolves around basic mobile connectivity or improving existing 4G networks. This disparity indicates that operators might struggle to find business cases to justify their 5G investments optimally.

Fiber backhaul refers to the optical fiber connections that transmit data to and from 5G base stations. Unfortunately, in many LMICs, this fiber infrastructure is either underdeveloped or nonexistent. Without it, the demands of 5G, which requires rapid and large data transfers with minimal delays, cannot be met. Establishing new fiber systems poses both high costs and logistical challenges, such as gaining permission to lay cables on public or private land.

5G technology operates more effectively with a higher density of base stations, especially when using certain frequency bands that do not travel far or penetrate obstacles well. Compared to 4G, this means telecom operators need to build a lot more cell sites to achieve similar coverage. In many LMICs, the existing 4G infrastructure is already sparse, meaning creating an adequate 5G network will involve substantial investments, which can be a significant barrier to deployment.

5G technology, especially advancements like Massive MIMO, is often power-hungry. In many LMICs, local electricity supply may be inconsistent or even lacking, which can put strain on the operation and reliability of 5G networks. This power unreliability can lead to increased operational costs for telecommunications operators as they may need to invest in backup solutions, making deployment even more expensive.

In LMICs, there are often challenges related to geography, such as mountains, rivers, or densely populated urban areas, which complicate the transportation of equipment needed for 5G networks. Furthermore, if the existing transportation infrastructure (like roads and railways) is underdeveloped, it makes the whole process of installing and maintaining equipment more complex and costly for operators.

Telecommunications operators must navigate complex regulatory processes to establish new 5G networks, including obtaining permits to place new cell sites. These bureaucratic hurdles can vary widely by region and can be time-consuming and costly, which can lead to increased deployment costs and delays. Inconsistent rules can make it difficult for operators to plan their investments efficiently.

In LMICs, efforts typically focus on expanding access to basic mobile connectivity rather than implementing advanced technologies like 5G. The immediate goal is to ensure that underserved populations have access to basic internet services. This often means that resource allocation favors expanding existing 3G and 4G networks to reach more users, delaying more advanced networks like 5G which may not yet be a priority for the majority of the population.