Oxford Economics: 3 million Aussies denied 5G

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[Sydney, 20th January 2020] A new report from UK-based global forecaster Oxford Economics has found that the 5G ban on Huawei in Australia will mean up to 3 million Australians – mostly in rural and regional Australia – will miss out on getting access to critical 5G technology by 2023.

The newly released Restricting Competition in 5G Network Equipment report also found that the Huawei 5G ban will increase local operators’ deployment costs by up to $300 million annually over the next ten years – with the near 30% cost increase inevitably leading to higher prices for consumers.

Oxford Economics found that the failure to deliver 5G nationwide by 2035 – meaning critical rural and regional businesses such as farming and the resources sector will miss out on 5G technology – will cost the Australian economy some US$8.2 billion in lost GDP gains.

 

Henry Worthington, Associate Director at Oxford Economics:

“The arrival of 5G will unlock new income streams for businesses in all sectors of the economy, and increase their productivity levels, through enhanced capabilities including higher data speeds, lower latency, and network slicing….this will allow the development of “mission critical” applications.

“However, it is broadly agreed that restricting such a significant player from bidding for 5G contracts will lead to higher prices, rollout delays and hence a slower diffusion of associated technological innovation.

“For Australia, the resulting loss in productivity has significant economic consequences. Lower economic growth due to delays in 5G rollout and the associated slower technological growth reduces GDP by [up to] $8.2 billion in 2035.”

 

Jeremy Mitchell, Director of Corporate Affairs at Huawei Australia:

“This report underlines what we have been saying since the Turnbull government excluded Huawei from delivering 5G – the decision will only end up hurting ordinary Australians, especially hitting hardest those in regional Australia.

“Australian broadband consumers are already saddled with the huge costs of paying for the $151 billion NBN so the last thing they need are substantially higher costs on building out 5G.

“These extra costs mean that operators simply won’t be able to afford to deliver 5G services across rural and regional parts of Australia where the technology could be most beneficial.

“For urban Australians – many of whom already have fixed-broadband – 5G will deliver Gigabit speeds that will help them stream 4K video and enjoy better online gaming – it’s the cherry on the cake.

“But for rural and regional Australians 5G enables the kind of next-generation connectivity that enables them to operate their farming and agricultural businesses more productively.

“Farmers in countries like Switzerland are already using 5G on new applications like monitoring their livestock – but Australian farmers simply won’t be able to use those kinds of applications.

“Regional and rural Australia has already been saddled with the hugely problematic NBN Satellite and Fixed Wireless services that normally deliver low-speeds in peak-times – they can’t be let down on 5G too.”

 

Key Points

  • The Oxford Economics report says that the Australian government 5G ban on Huawei will increase 5G deployment costs by nearly 30% – leading to higher prices for consumers.
  • The 5G ban means that Australian operators will have to spend up to $300 million extra annually to build 5G networks over the next decade.
  • The additional costs and delays created by the 5G ban means that some 3 million Australians will miss out on 5G by 2023.
  • With 5G unavailable to Australia’s key economic generating areas of rural and regional Australia some US$8.2 billion in GDP will be lost by 2035.

 

 

Download the full report

https://resources.oxfordeconomics.com/hubfs/Huawei_5G_2019_report_V7.pdf

 

Notes to Editors

Oxford Economics is a leader in global forecasting and quantitative analysis. Its worldwide client base comprises more than 1,500 international corporations, financial institutions, government organisations, and universities.

Headquartered in Oxford, with offices around the world, Oxford Economics employs 400 staff, including 250 economists and analysts. Its best-in-class global economic and industry models and analytical tools give it an unmatched ability to forecast external market trends and assess their economic, social and business impact.

https://www.oxfordeconomics.com/about-us

 

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