Huawei is calling for regional governments to consider giving away the spectrum on which 5G operates to encourage telecom providers to accelerate investments in the technology for faster economic growth.

The suggestion comes as Huawei pleaded with the telecoms industry and regulators to work together to accelerate 5G prosperity. Telecoms providers in Jamaica have been reluctant to roll out 5G infrastructure as indicated recently by Daryl Vaz, minister of science, energy and technology, during the Standing Finance Committee of Parliament’s review of the 2023/24 Estimates of Expenditure on March 2.

“Speaking to the telecoms providers, they don’t seem to be in any haste or rush to roll out 5G, and they do claim that there is still so much more that they have to do in terms of 3G and 4G,” Vaz told the committee. In Jamaica, the spectrum license can cost up to US$25 million.

However, Huawei suggests that these telecoms providers could be incentivised to roll out 5G if they get the spectrum free.

“In some geographies, I’m able to talk to the minister or the regulator, and demonstrate that if the spectrum is free, then that means an operator has a lot more cash to invest,” Paul Scanlan, chief technology officer at Huawei Carrier Network Business Group, told journalists at the recently held Mobile World Congress 2023 in Barcelona, Spain.

Scanlan noted that giving away spectrums “can be very difficult for governments” who might argue that the monies to be collected from spectrum auctions can be used to fund health care, education or other areas for which it has social responsibility.

“So the key is to have alignment between government targets and industries,” Scanlan continued. He pointed out that both could work out a deal in which if the spectrum is given free, certain obligations must be attained to help the Government achieve its social responsibility goals.

“What we do is to work both sides, with the operators and also…with the governments, [to show them] the advantages of [giving away spectrum],”Jipeng Chen, director of corporate communications for Huawei in Latin America and the Caribbean, said in queries from the The Caribbean Business Report about the call for the spectrum to be given away.

Chen said while the final word on what to do with the spectrum lies with the regulators in each country, “What we see is that spectrum is an essential piece of all the equation to build and maintain a network, and that’s a cost that has to be taken into consideration for the final price to the end user,” he continued.

It is not clear if Jamaica’s Government is willing to give away the spectrum for a 5G infrastructure especially with Rock Mobile, a third telecoms operator now in the process of paying for its spectrum licence to roll out its infrastructure.

Vaz told the Standing Finance Committee earlier this month that Rock Mobile has already paid US$7.5 million as a lump sum for its licence and is paying the rest in installments though he did not say what is the full cost of a spectrum licence. A member of the telecoms sector said getting the spectrum free would definitely incentivise providers to roll-out 5G infrastructure because it would mean more is left over to build out the network which could cost upwards of US$200 million for islandwide coverage similar to what is available currently with LTE. However, rolling out such an infrastructure now wouldn’t make sense, it was argued, since only about 5 per cent of handsets are capable of using 5G.

For its part, Rock Mobile’s own roll-out of its network has been delayed and it’s not expected to be 5G. Vaz said while the spectrum is available to facilitate the roll-out of 5G, the policy and regulations are not yet ready, but will be fast-tracked to keep Jamaica at the forefront of technology development especially for 5G and other innovations to come. Huawei has already started to roll out 5.5G and is in the process of developing 6G technology, showcasing a slew of innovations to use the infrastructure at the Mobile World Congress 2023 (MWC23).

5G is the fifth-generation technology standard for broadband networks, which telecoms providers began deploying worldwide in 2019. In the three years since the roll-out of 5G, there have been 240 commercial 5G networks with almost one billion users.

In terms of the development to Latin America and the Caribbean, 5G has been deployed in several of the countries like Chile, Brazil, Mexico, Guatemala and Dominican Republic while auctions are taking place or set to take place in other countries such as Peru, Colombia, Argentina, Uruguay.

“Right now in the world, there are now over 240 commercial 5G networks, and also individual 5G users now number more than 900 million,” Chen noted.

Peng Song, president of Huawei’s ICT strategy & marketing speaking at the MWC23, making the business case for 5G, pointed out that the global user penetration rate of 5G in its first three years amounts to that of 4G in its first five years. Operators reporting over 20 per cent 5G user penetration during the first round of deployment have seen significant growth in mobile revenue. In the meantime, devices, content, experience, and business models are diversifying as more operators and partners embrace 5G. This is evidence of a market shift from risk-based to revenue-based decision-making for even more assurance of business success. Huawei found that fast migration of 5G users and traffic is the key: if an operator migrated 30 per cent of traffic to 5G in three years, it would take less than four years to see return on investment and the duration could be shorter if other technologies were included.

“I believe that what countries has to take into consideration is the economy that is arising based on this digital transformation. The digital economy value will be US$23 trillion in 2025, something around that. I bet it will be higher, because that estimation was done previous to the pandemic, and the pandemic speed up all the process across the world. So regardless of the final figures, let’s take into consideration that there’s a digital economy and that it’s growing. The question for all the country’s is, what’s the share they want to have on that digital economy? The longer it takes for them to jump into these new technology and accelerate the longer it takes for the digital transformation,” Scanlan said.