This study explores the economic impact of deploying localised services, such as 5G Fixed Wireless Access (FWA) and 5G private networks (PN), in key fixed service (FS) / fixed satellite service (FSS) bands – in particular the 28GHz band. In view of the few and limited bands available to satellite, the main focus of the study is on economic issues involved with accommodating localised services at the expense of nationwide and global satellite services. Deployment of 5G FWA and 5G PN in the same bands as fixed and ubiquitous satellite services involves complex technical challenges. These complexities would most likely result in unnecessary higher costs and limitations for the full deployment of nationwide satellite services, as well as complicating deployment of 5G localised uses. The question facing regulators and policy-makers seeking to optimise scarce spectrum usage is whether potential benefits offered by 5G FWA and localised 5G private networks outweigh the socio-economic costs that may be incurred should satellite services be impaired.

Economic evidence from many empirical studies shows that, regardless of the technology, GDP per capita is related to broadband penetration, indicating an increase in economic output as broadband penetration increases. Some studies provide evidence that the positive economic impacts are stronger in emerging economies than in industrialised jurisdictions. Thus, from an economic welfare perspective the relevant issue is not whether mobile broadband is available to communities, but whether any reliable and affordable broadband service is available at all. The underlying technology is irrelevant. 

Serious physical and technical limitations hamper the capabilities of 5G FWA / 5G PN in millimetre Wave (mmWave) bands (such as 28GHz) to serve the significant populations across the globe beyond densely populated areas. These physical limitations restrict 5G FWA / 5G private network use to niche market segments, in both rural and urban areas. Beyond urbanised areas, mmWave 5G FWA / 5G PN may only be viable for small towns with access to cost-efficient backhaul and sufficient population density that supports the business case. Independent studies confirm that the business case for 5G FWA / 5G PN is highly dependent on the costs associated with servicing particular locations. In addition to the characteristics of the target coverage area, FWA costs depend on the underlying wireless technology.

Our own case study analysis demonstrates that:

• for a deployment beyond urban areas a connectivity solution based on 5G FWA / 5G private network is around ten times more expensive per end-user than a direct satellite service
• to provide a connectivity solution for an educational facility beyond urban areas the total cost of a 5G FWA / 5G private network solution is at least six times higher than a satellite solution.

Not only can satellite broadband services be offered at substantially lower cost to bridge the urban-rural divide, the pace of deployment is significantly faster than 5G FWA / 5G private network options.

The main cost component in the satellite traffic is the cost of capacity. This is expected to decline substantially with the introduction of Ultra High Throughput Satellites (UHTS). As the cost of capacity declines, satellite services will deliver higher data usage without increasing prices and with even better speeds. Meanwhile the cost for deploying 5G FWA / 5G PN in areas beyond urban centres is dominated by civil works which is unlikely to decrease with time.

The amount of spectrum available to satellite also influences the cost of satellite services. For example, any reduction in the amount of spectrum reserved for satellite in the 28GHz band will result in a higher per-user cost of satellite capacity due to reduced economies of scale, which in turn will reduce the potential economic benefits of using satellite in cases where other technologies are clearly less cost effective. Depending on the extent of the reduction in available spectrum, the number of fixed satellite end-users able to be served may be reduced significantly.

This study has not identified a corresponding economic benefit to be gained from ceding 28GHz spectrum to 5G FWA / 5G PN, since the 28GHz band is already in use for well-established applications including Fixed Satellite Service (FSS) and Earth Station in Motion (ESIM).

The addressable market for 5G FWA is largely as a substitute for other technologies

mmWave 5G FWA technology is characterised by both limited cell coverage area, and a need for high capacity backhaul. The addressable market for 5G FWA appears to overlap existing technologies and services. The economic benefits of FWA in mmWave will only accrue on a very localised basis and should not be expected at all in circumstances where the technology is simply a substitute for another technology of comparable speed, quality and reliability.

5G private networks are essentially private micro-operators

These private networks are tailored to meet specific performance requirements and applications, and do not take a standard configuration. Innovative applications are anticipated but are yet to emerge in the market. As such, the economic value of deploying these services in mmWave is largely uncertain.

Localised 5G private networks co-existing with other services in the same band may be problematic from a spectrum management standpoint. This includes the use of 5G private networks for industrial purposes. If, as some claim, a number of these uses require preferential treatment as critical operations, deployment is better suited in bands where the same type of service is already allocated, in order to prevent interference – for example in the 26GHz band, or in any other mmWave band formally identified for 5G International Mobile Telecommunications (IMT) in the ITU radio regulations.

Another important consideration is that there is ample spectrum currently available in alternative bands to meet the requirements of 5G FWA / 5G private network use cases. Indeed extensive contiguous spectrum, already harmonised worldwide, is available for deployment not only in the mmWave bands, but also in mid band spectrum in the 3.5GHz and 6GHz bands. A total of 17.25GHz was identified for IMT by WRC-19 while the mid band spectrum in the 6GHz band is under study for IMT identification by WRC-23. Meanwhile, it is already clear that the benefits offered by a harmonised spectrum band will not be available for 5G uses in the 28GHz band.

Without the full and unconstrained 28GHz spectrum band (27.5–29.5GHz), the capacity requirements of satellite operators will be unmet causing disruption to existing services and introducing upward pressure on costs. This will negatively affect the utility of current and potential end-users. Given that services such as 5G FWA / 5G PN cannot serve as a substitute for satellite services, the net economic impact of restricting 28GHz spectrum availability for satellite use will likely be an increase in costs for satellite end-users on land and those on the move across oceans (maritime ESIM), and in the air (aeronautical ESIM). This technology plays a key role in enabling ubiquitous broadband connectivity. Moreover for unconnected communities in areas where satellite is the only viable broadband technology such increases in costs may push services further beyond their reach.

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