Deep pockets: US faces $150 billion fibre bill

Created July 20, 2017
News and Business

Professional services giant Deloitte says the USA needs to invest between $130 billion and $150 billion in fibre infrastructure over the next five-to-seven years. This will be the price for unlocking the full commercial potential of 5G mobile networking, boosting high-speed service competition, and increasing rural broadband access in the country.

According to a new Deloitte report titled “Communications Infrastructure Upgrade – The Need for Deep Fiber“, a 5G-ready communications infrastructure could unlock unprecedented potential to build seamless digital ecosystems, potentially reshaping the way citizens live, work and interact, dramatically stimulating economic productivity in the USA. The report underscores the need for new investment and monetisation models to adequately support rapid and massive fibre investment.

“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,” says Craig Wigginton, Vice Chairman and Telecommunications Sector Leader, Deloitte & Touche LLP. “We see a 5G-ready US infrastructure as critical to enabling a range of other adjacent industries to compete globally and safeguard our digital economy.”

For carriers to support the projected fourfold increase in mobile data traffic between 2016 and 2021, deep fibre – increased optical penetration into the access network – will be critical. Despite the expected demand and potential economic benefits of fibre deployment, Deloitte judges that the US currently lacks the fibre density in access networks to make the bandwidth advancements necessary to improve the pace of innovation and economic growth.

The report further notes that deep fibre deployment will not only increase broadband service choice for residential customers; it will also be key for the national infrastructure imperative to provide consumers high-speed broadband connections no matter where they live at prices they can afford, closing the “digital divide.”

“It is essential that fibre gets deployed closer to the customer to enable next generation wireless and to ensure affordable high speed connectivity across urban, suburban and rural geographies,” comments Dan Littmann, Principal, Deloitte Consulting LLP. “Motivating this investment requires the removal of legacy regulations, faster migration to IP networks; and new monetisation mechanisms that allow carriers and investors to justify upfront investment in fibre.”

The report notes that fibre currently passes less than one-third of US homes, and only 39% of consumers have access to more than one broadband provider of at least 25 Mbits/s service. Approximately 10 million rural homes and 3 million urban/ suburban homes do not have broadband of at least 25 Mbits/s. Furthermore, in rural communities, only 61% of the population has access to 25 Mbits/s wireline broadband, and when they do, they can pay as much as three times more than suburban customers.

www.deloitte.com

John Williamson

This article was written
by John Williamson

John Williamson is a freelance telecommunications, IT and military communications journalist. He has also written for national and international media, and been a telecoms advisor to the World Bank.