Research conducted by Greensill, a non-bank provider of working capital finance, has revealed the estimated cost of developing and implementing 5G telecoms technology across all economic sectors globally will reach more than $2.7 trillion by the end of 2020.
Prior to the Greensill's report, industry professionals had already expected the telecoms sector to require around $1 trillion of investment for infrastructure upgrades to accommodate 5G technology. What was not widely calculated was the cost of implementation of 5G across the global economy, which Greensil says will require an additional $1.7 trillion by the end of 2020. Companies will need to the extra funding for the Internet of Things, or the hardware, services, connectivity and software needs that come along with new technology.
"Spending on 5G roll out is just the thin end of the wedge. This project is actually about funding the growth of the Internet of Things and industrial connection to that,” said Tony Wonfor, Greensill managing director and telecoms finance specialist. "In the automotive industry, for instance, 5G will be important for tracking components through the supply chain and in to the manufacturing process, then right through to an end product that has connectivity beyond anything we have seen so far.”
Greensill suggests that many telecoms companies will simply lack the funding to stay competitive and will not be able to acquire such large amounts from traditional banks. Greensill, however, plans on helping these companies explore other options, such as Supply Chain Finance and Accounts Receivable Finance.
Lex Greensill, Greensill founder and CEO, said "Greensill counts many of the world's leading telecoms and industrial companies as clients primarily because of our success in innovating financial solutions across this space. We see our products such as handset financing and other working capital solutions as crucial to the successful roll out of 5G globally."