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Deloitte: U.S. may invest $53 billion in 4G networks over next five years

Updated Dec 19th, 2018 7:26PM EST
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Wireless telcos in the United States are poised to invest as much as $53 billion in 4G wireless network technology and buildouts over the next five years, resulting in as much as $151 billion in gross domestic product growth. A new report from accounting and consulting firm Deloitte suggests that that 4G expansion by U.S. wireless companies could also create as many as 771,000 new jobs between 2012 and 2016. Deloitte sees $25 million as the minimum 4G investment from telecommunications companies over the next five years, resulting from a scenario where companies deploy 4G networks at a moderate pace and transition slowly from 3G to 4G. If Verizon Wireless’ current pace is any indication, this will likely not be the road major carriers will take with 4G rollouts. The firm believes as much as $53 billion will be spent, however, if U.S. carriers take a leadership roll by deploying 4G faster than carriers in other regions. “Investment in such a powerful form of communication contributes to the economic recovery and provides a job-creating engine for the future,” said Phil Asmundson, Deloitte vice chairman and U.S. media and telecommunications sector leader, in a statement. “The key to harnessing the potential benefits of 4G technology lies in America’s market-driven wireless sector, which encourages the emergence of innovative applications that spur productivity and could produce the same surge of innovation and demand we experienced during the 3G era.” Deloitte’s full press release follows below.

Deloitte: U.S. Could See $53 Billion in 4G Network Investments by 2016, Creating 771,000 New Jobs

New 4G products and services could drive additional growth

NEW YORK, Aug 22, 2011 — A new Deloitte report states that wireless telecommunications companies in the United States could invest $25 to $53 billion in fourth generation cellular wireless networks (4G) between 2012 and 2016, triggering $73 to $151 billion in gross domestic product growth and creating 371,000 to 771,000 jobs.  Additional growth could occur as high-tech companies create new mobile broadband products and services, further changing the way people live, work and learn.

The Deloitte report, “The Impact of 4G Technology on Commercial Interactions, Economic Growth, and U.S. Competitiveness,” investigates the economic dynamics surrounding 4G technology and explains how the U.S. can maintain the global leadership position in mobile broadband innovation it won during the 3G era.

The $25 billion figure assumes a baseline scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G extends to the middle of the decade. Under these conditions, U.S. firms are vulnerable to incursions by foreign competitors capitalizing on aggressive efforts in their home markets to deploy 4G networks and develop 4G-based devices and services.

The $53 billion figure assumes a scenario in which U.S. carriers invest more rapidly in 4G networks and start to produce popular 4G-based offerings before global competitors gain traction. In this scenario, the demand stimulated by new offerings justifies more network investment, setting off a virtuous cycle of investment and market response that positions the U.S. to retain its mobile broadband leadership.

“Investment in such a powerful form of communication contributes to the economic recovery and provides a job-creating engine for the future,” said Phil Asmundson, vice chairman and U.S. media and telecommunications sector leader, Deloitte LLP. “The key to harnessing the potential benefits of 4G technology lies in America’s market-driven wireless sector, which encourages the emergence of innovative applications that spur productivity and could produce the same surge of innovation and demand we experienced during the 3G era.”

Global Competition Should Spur U.S. Innovation and Investment

According to the report, more than 150 carriers in 60 countries are currently committed to 4G deployments and trials. South Korea, Sweden and China are examples of countries moving rapidly to reap the benefits of 4G technology.

Cloud Computing Accelerating 4G Capabilities

Rapid adoption of cloud computing further enables the U.S. to take full advantage of 4G’s potential impact by allowing developers and entrepreneurs to analyze the market’s response to new applications, content, solutions and business models – cheaper and quicker.

“Cloud computing will allow handheld devices to be more compact and efficient while making them tremendously more useful and powerful,” Asmundson said. “Applications, storage and computing power all can largely reside in the cloud, but only if connectivity is robust, reliable and secure. The benefits of 4G and cloud go beyond the telecom sector. Together, 4G and cloud technologies support the kind of entrepreneurial ecosystem that has made the United States a mobile broadband leader.”

The advent of high-performance wireless capacity, coupled with cloud infrastructure and other advances, is proliferating new offerings and capabilities that exceed what has been possible with 3G technology, the report notes. In addition to consumers, a variety of U.S. end-user industries, including nonprofit and government entities, are likely to use devices and services incorporating the capabilities of 4G technology to better serve their customers, patients, clients and students. This includes applications such as augmented reality for businesses, machine-to-machine technology involving the use of sensors and actuators and the development of smart highways.

4G Enabling Marginalized Groups

Deloitte’s report indicates that the deployment of 4G mobile broadband has special implications for certain disadvantaged markets including minority groups, rural communities and localities with limited access to full broadband connectivity, and some small businesses. The report explains how equipping these marginalized groups with 4G access helps move them further into the nation’s economic mainstream, thereby serving the public interest while boosting U.S. competitiveness.

Lessons from the 3G Revolution

Deloitte’s analysis emphasizes that America’s success in 3G was driven by entrepreneurial innovation. When the government auctioned large amounts of spectrum, removed spectrum caps limiting individual carriers’ spectrum holdings and permitted market forces to operate, private enterprise pursued new opportunities and a robust 3G ecosystem was born.

The FCC is moving to expand spectrum supply through a new incentive auction, but the report indicates that it will be difficult to keep pace with projected demand. Accordingly, there is a continuing need to find additional ways to make better use of available spectrum and to unlock additional spectrum.

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 15 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.