€200-300 billion?

Mobile carriers' next challenge: finding the money for 5G

Great speed, but who will pay for it? Source: Reuters

The next big thing in cellphones will be 5G technology. Not only is it 10 times faster than existing mobile systems, it will allow such innovations as self-driving cars, virtual reality headsets and doctors operating remotely with robotic arms. But the gear is very pricey.

“5G will revolutionize the way we support and promote our business customers,” said Dirk Wössener, who recently left Canadian mobile firm Rogers to join the management team at Deutsche Telekom, parent company of T-Mobile in North America. Mr. Wössener says 5G mobile offers 1,000 times the capacity and 100 times the connection density of current mobile systems.

Rolling out the next generation of cellphone systems is going to be extravagantly expensive for cellphone carriers like T-Mobile. Deutsche Telekom CEO Timotheus Höttges has estimated the cost of providing 5G networks in Europe alone at €300 billion to €500 billion ($370 billion to $615 billion). The cost of 5G is so huge that White House officials are even considering a plan for the US government to build the system to ensure that it is secure against Chinese hackers.

“No company is capable of building out Germany’s network on its own,” said Mr. Wössener. He added that Deutsche Telekom, Europe’s biggest phone company, has signed cooperation agreements with four German companies and is in talks with 70 other telecommunications firms on forming alliances to pay for all the new infrastructure.

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