Business Unusual

Will 5G communications make access universal or create another digital divide?

The mobile phone allowed Africa to get connected at a pace that started levelling the digital playing field. Improvements via 3G updates and now the 4G speeds of LTE have pushed that further. 5G promises incredible speed and access, but it uses a network that will require a significant investment to give everyone access.

It will not only affect access, but may become a significant factor in how cities are built and grow.

How we got here

Settlements founded near natural resources, food, fresh water and accessible travel options were most likely to succeed. As long as those elements remained the settlement would grow. Rivers and coasts were the original best options, trade and transport options meant that towns, even with limited resources of their own, could still grow with trade and influence.

Influence and political power then grew to be the principal factor to allow towns to become cities and cities to become grand capitals.

That has been the status quo until now. A new force is beginning to dictate how and where cities will flourish - digital access. Both the physical connectivity and the workforce to make the most of it is having an impact on the city where they are situated.

High-speed internet access was introduced to neighbourhoods where providers could either easily supply it or believed there would be enough demand for it. The demand was real, and for a period while cities like New York and London were rolling out broadband internet, property values in those areas increased. Better facilities have always been a driver for property increases, and internet access is the latest driver.

How is 5G different

5th Generation (5G) is not a single thing, but rather a group of new standards that will see the mobile internet improve. Data speeds will increase by at least 10 times. Response times will drop to almost an instant. Many more devices will be able to connect, and movement from one station to the next will further reduce current issues with dropped connections.

The breakthrough method to do this is to use a higher transmission frequency and new base stations with many more connections nodes on them. But there is a catch; the signals can’t travel as far as the current transmissions, and they can be blocked by most objects.

More base stations are needed to overcome the limited range. Their size should make the resistance to allowing regular base stations less of an issue. However, the installation, maintenance and cost to roll it out will mean it will be rolled out first to the areas that would most be able to recoup the cost of installation. Those suburbs and commercial areas will allow for more products and services to be operated in those areas. Businesses may choose to relocate, and residents may be willing to pay more to move to those areas.

In the short term, it should roll out to the affluent areas of most big cities and begin spreading along major transport routes. Another potential advantage is to make autonomous driving more reliable. By first connecting the main routes, one may see even more traffic drawn to it.

Outlying suburbs, neighbouring and rural areas and secondary routes will not get the initial benefit. Until the investment of the initial rollout can be recovered, and costs reduce, those secondary areas will not get the same access or demand for business and residents to live there.

Major centres like Joburg, Pretoria, Durban and Cape Town with the highways N1 and N2 connecting them will benefit first, just like they did with the initial rollout of mobile technology. Back then though it was all new and even where you did have access, it was not that great.

Now we know how useful access can be and, while 4G speeds are very good, networks may prefer to rollout out the new 5G networks rather than roll out 4G to marginal areas. Once you get used to 5G speeds, you will struggle on anything still operating at 3G speeds.

South Africa will not be unique. In fact, the issue is more pronounced in areas like Silicon Valley where it is not only access that might affect property prices, the proximity to large digital companies have a significant impact on gentrification.

Even the rollout to neighbouring areas might be trouble. A low-income neighbourhood will see a rapid spike in demand once high-speed access is available.

Alexandra is due to get uncapped fibre installed at very competitive prices. Initially, that would be great for residents, but it may also be a reason for business and speculators to want to buy property. Current owners may accept the initial windfall only to have to move much further away to find a new home in the area by paying more to get close by, driving up the prices there too.

This is not new, and many factors allow this to happen. As wealth inequality continues to grow, advances in technology that were intended to make access universal and costs affordable instead may become a reason to divide the rich and poor further.

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