£15.75bn technology bounty
Ignorance could see firms miss out on 5G benefits
Robots and self-driving vehicles are among the users of 5G technology
Industry could miss out on a £15.75 billon boost to the economy by failing to adopt next generation 5G technology because they do not know enough about it, according to a new report.
Despite the benefits, just four in ten (39%) business decision makers say they know how their business can make the most of 5G, and only 15% are currently thinking about how they can harness the new technology.
The report 5G: A Transformative Technology from Barclays Corporate Banking shows a series of potential scenarios that UK businesses could face when implementing 5G.
Under an ‘optimistic scenario’, which anticipates an accelerated rollout of 5G and an enhanced uptake amongst UK businesses and consumers, the UK would see the full increase in business revenue by 2025.
A slower-than-anticipated rollout and limited use would deliver around £8.3bn of added revenue to the UK, while the current pace of development added revenue would reach £13bn.
The sectors most likely to have plans for 5G are TMT (23%), logistics (18%) and hospitality and leisure (17%). The optimistic scenario could be a reality for British businesses, as mobile providers are already beginning to introduce 5G capabilities on a large scale this year, including pilots under way in Edinburgh, London, the Midlands, and Belfast.
The Government is also supporting 5G by incorporating it into its Industrial Strategy, having pledged £1bn towards digital infrastructure. The bidding process for 5G licences, meanwhile, opened to the telecoms industry last year.
The Barclays research revealed that a majority of businesses (58%) are already benefitting from fast communications technology like 4G and ultrafast broadband. This is because it allows companies to operate across disparate locations (59%), communicate with customers and potential customers (49%) and connect multiple machines and devices (48%).
5G can further enhance these operations through benefits including peak data rates 20 times faster than 4G and simultaneous connections for one million devices per square kilometre. The extreme speed paves the way for innovations in artificial intelligence, robotics and large-scale Internet of Things (IoT) usage. For businesses, this means more extensive machine-to-machine communications, using self-driving vehicles and better overall infrastructure – amongst other new applications.
Sean Duffy, Head of TMT at Barclays, said: “The rollout of 5G offers a huge opportunity for the UK. We’re seeing massive potential for business growth, which ultimately delivers a positive knock-on effect for the whole economy.
“While the Government and network providers are already working hard to introduce 5G in the UK, we found that businesses do not yet have enough clarity about how they will benefit in the long-run. What’s more, nearly four in ten business leaders still aren’t entirely sure what 5G is.
“To ensure the UK can realise the full potential of an accelerated rollout, the Government, mobile operators and other corporate partners – including financial institutions – have a job to do in order to raise awareness amongst businesses so they can harness 5G. This support is crucial for businesses to make smart investments which will unlock the power of 5G.”
While awareness is low for some sectors, the good news is that those industries with an understanding of 5G are already investing, or planning to invest, in the technology. The sectors planning significant investments into 5G technologies within their business are TMT (35%), logistics (34%), business services (28%) and manufacturing (24%).
Even if businesses may not be immediately planning to invest in 5G technology in the short-term, across sectors, 40% of business decision makers said they expect 5G to increase their revenue over the next five years – a clear indication of the value placed on the technology and the commercial benefits that leaders expect it will provide.
Margot James, Minister for Digital and the Creative Industries said: “The Government is committed to ensuring businesses can harness the power of this revolution in mobile connectivity. The benefits set out in this report and the potential to add billions to our economy are exactly why we’re investing in the UK’s strong 5G ecosystem.
“Through our modern Industrial Strategy, we’re focussed on delivering real-world benefits from 5G in important sectors of the UK economy – providing new services, increasing productivity and improving quality of life.”
Scotland’s poor reception
At an evidence session with MSPs, Ofcom has revealed that Scottish mobile coverage will continue to lag other UK nations.
Official figures show that only two fifths (38%) of Scotland’s geographic area can get good 4G services from all operators in comparison to four fifths (82%) of England. At a session with Holyrood’s Rural Economy and Connectivity Committee, officials suggested that UK-wide coverage improvement targets were unlikely to be fulfilled.
Stuart Mackinnon, external affairs manager for the FSB in Scotland, said: “MSPs are absolutely right to ask telecoms decision-makers why Scotland continues to be so poorly covered. When Scottish residents and businesses are paying the same as consumers elsewhere in the country, it isn’t right that we get a sub-standard service.
“In the week that thousands of Scottish businesses have to get to grips with HMRC’s Making Tax Digital system, it is unacceptable that our digital infrastructure is still so spotty. While the Scottish Government’s programme to deliver universal superfast broadband can’t come soon enough, the UK Government and Ofcom need to send strong signals to the telecoms industry that Scotland can’t be left behind.”