U.S. investment of $130B-$150B required to fulfill 5G, wireline broadband desires, says Deloitte

As service providers look to help consumers and businesses take advantage of higher wireline and wireless 5G broadband services, the United States will require an investment of $130 billion to $150 billion in new fiber infrastructure over the next 5-7 years.

In a new study called "Communications Infrastructure Upgrade – The Need for Deep Fiber,” Deloitte said that new fiber investments will not only unlock new 5G service offerings, but also broaden broadband competition and rural broadband coverage.

Unsurprisingly, one of the key findings of the Deloitte report is that fiber passes less than one-third of U.S. homes and only 39% of consumers can chose from more than one service provider to get a 25 Mbps speed service.

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Deloitte fiber

The outlook is even more dire in rural areas. Deloitte found that 10 million rural homes and 3 million urban/suburban homes do not have broadband of at least 25 Mbps.

Perhaps even more troubling is that in rural communities, only 61% of the population have access to 25 Mbps wireline broadband, and consumers can pay nearly three times more than customers in larger cities.

Deloitte’s study suggests that a “failure to motivate investment in deep fiber could result in negative consequences, including insufficient network densification to support wireless traffic growth, 5G deployment and associated use cases, lack of choice for consumer broadband, and the widening of the digital divide.”

"Network infrastructure is among the key factors in a nation's economic growth potential and status as an innovator, and ultimately in propelling our economy's gross domestic product and job growth," said Craig Wigginton, vice chairman and telecommunications sector leader, Deloitte & Touche, in a release. "We see a 5G ready U.S. infrastructure as critical to enabling a range of other adjacent industries to compete globally and safeguard our digital economy."

So how can the U.S. telecom industry overcome the lack of fiber access?

Researchers suggest that one way will be through reforms to state and federal regulators that encourage deep fiber investment.

While IP migration and regulatory reforms is important, Deloitte said it won’t be enough to create the case for fiber deployment. Wireless, wireline and cable require creative new ways to monetize "last mile" access as an incentive for massive fiber deployment.

The report proposes three potential models:

  1. Deep fiber, adjacent service synergies: As more households connect more of their devices to their home networks, service providers can raise revenues by offering a series of integration, network security and traffic management services within the mix of IoT devices and ecosystems.
  2. OTT, carrier deep fiber partnerships: As limited fiber availability constrains increased wireless densification and fiber broadband, Deloitte said that over the top players may choose to fund fiber deployment, including owning assets or forming partnerships with service providers.
  3. Deep fiber as a financial investment: Insufficient supply of deep fiber and overwhelming demand growth are strong fundamentals for fiber investment. As more nontraditional fiber investors come online, Deloitte said it expects shared infrastructure models to emerge for last-mile fiber access. The firm suggests that fiber as leased real estate could allow carriers to maximize asset usage.