A study presented by Nokia and Omdia revealed that the deployment of 5G networks could help Latin America to reactivate the economy, helping the region overcome more quickly the crisis generated by the pandemic of the Covid-19.
In some countries of the region, the impact would be more significant. For example, 5G can increase one percentage point to the annual growth of Chile’s GDP in the period between 2021 and 2035, becoming one of the engines of economic recovery. Meanwhile, Brazil would see the largest total gain with $1.216 trillion of 5G Economic impact and an increase in productivity of $3,084 trillion.
Potential Impact of 5G in Chile
In the long term, 5G could generate an economic impact of $207 billion in Chile by the year 2035, distributed among several sectors within which information and communications technologies (ICT) stand out with $ 41 billion, services with $ 39 billion, manufacturing with $ 29 billion, mining with $ 23 billion, construction with $ 15 billion, and trade with $ 10 billion.
It will also radically transform three segments of the telecommunications market: mobile broadband, residential fixed broadband, and private networks for large companies.
The study predicts that the mining sector will be the first vertical market to adopt 5G in Chile, followed by the manufacturing sector.
The deployment of 5G in the world
Commercial 5G network launches in the United States and South Korea have captured the world’s attention with the promise of extremely high transmission speeds and latency comparable to that of the human brain. Furthermore, accelerated deployments in the Middle East have shown that 5G is not limited to highly developed countries. By the end of 2019, there were already more than 40 commercial 5G networks around the world.
In the case of Latin America, there are some commercial 5G networks in the Caribbean and Uruguay, in addition to various activities for tests and pilots. The delay in large deployments is largely due to the late adoption of 4G in Latin America. According to the study, currently, 4G has a penetration of 52% in mobile lines, 3G has 33% and 2G continues to operate on 13% of lines. The latter is not expected to disappear until after 2024.
Read also: Huawei expanded in Latin America during 2019
The deployment of 5G in Latin America
According to the study, the deployment of 5G will radically transform at least three segments of the telecommunications market in Latin America: the mass mobile broadband market, the residential fixed broadband market, and the network market for large companies.
As traffic continues to grow, users are becoming more impatient with the existing 4G mobile broadband capability (and low-speed public WiFi networks). For this reason, 5G is expected to enjoy rapid adoption in the mobile broadband mass market. According to the study, it is estimated that 25% of these lines will be operating in 5G by 2024 in Chile.
Second, there is the network market for large companies, where the partitioning functionality of 5G networks (Network Slicing) stands out, which enables the dynamic creation of 5G private networks. These new networks surpass current business networks in all their attributes (deployment flexibility, latency, speed, security, customizability).
In the third segment, the residential fixed broadband market, it is currently enabled by fiber optics. In this segment, 5G will become a real alternative thanks to 5G FWA (fixed-wireless access) solutions, which offer operators greater flexibility and lower cost of deployment and operation.
According to the study, it is estimated that today there are 300 million households in Latin America without access to fixed broadband and an additional 45 million households with low-speed fixed broadband (less than 30 Mbps). All of these homes will be able to be served by 5G FWA.