5G Fixed-Wireless Unlikely to Bridge Rural Urban Digital Divide
DENVER (October 30, 2018) — As rural telecommunications providers look for cost-effective solutions to bridge the rural-urban digital divide, 5G fixed wireless has been identified as a potential solution. However, according to a new report from CoBank’s Knowledge Exchange Division, high costs, competition, spectrum propagation and ecosystem headwinds make 5G fixed wireless an unlikely candidate to solve rural America’s broadband challenges.
“As Verizon begins deploying its 5G fixed wireless network in urban and suburban markets, we believe they are facing operational and technical issues that will limit the scale of its 5G fixed wireless deployments,” said Jeff Johnston, lead communications economist with CoBank’s Knowledge Exchange Division. “While there may be limited use cases where the technology makes sense in urban and suburban markets, we don’t see the use of millimeter-wave spectrum in fixed wireless networks extending to rural markets given current challenges.”
Verizon, the leader in 5G fixed wireless, faces competition from incumbent cable operators in urban and suburban areas. The operating leverage and cost-structure advantages enjoyed by the cable operators are barriers for Verizon to offer a competitively priced product while maintaining profitability.
There are new spectrum bands set to be commercialized that will address the millimeter-wave propagation issues, which will open up opportunities for some rural network deployments. However, uncertainties related to the cost of acquiring licensed rights to the spectrum could be problematic.
“Verizon’s commitment to 5G fixed wireless is a critical component to establishing and maintaining a healthy ecosystem. If because of the aforementioned challenges Verizon’s commitment begins to wane, then rural operators could be left with fewer choices and higher costs,” said Johnston.
To see a brief video synopsis of the report, click here.
To read the full report, visit cobank.com.
CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.
CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.
For more information about CoBank, visit the bank's website at cobank.com.