The world is shifting to a digital economy. Hybrid working and digitally connected production and distribution is the norm. In this world, the underlying connectivity environment will be more important than ever.
This is where 5G (fifth-generation) wireless comes in, and where Australia has a role to play globally.
Austrade recently partnered with PwC to explore potential investment opportunities within Australian 5G and connectivity. The research found Australia's world-leading 5G ecosystem has the potential to unlock billions of dollars in productivity improvements across multiple industries.
The rise of 5G in Australia
Australia is a global leader in 5G rollout. By the end of 2021, Australia's Mobile Network Operators (MNOs) had installed around 4,000 operational 5G base stations across the country. The population coverage puts Australia in the top tier of nations rolling out the new technology.
Today, Australia is ranked third in 5G-connected devices per capita (Source: The GSMA Mobile Connectivity Index, accessed 28 September 2022). By 2025, it is expected that 95% of Australians will have 5G coverage (Source: Telstra, T25 Strategy to cover 95% of the Australian population by 2025).
Despite the rapid adoption of 5G across Australian households, industry adoption is still emerging. In fact, 73% of businesses in Australia have yet to realise the full potential of 5G (Source: Deloitte, 5G unleashed: Realising the potential of the next generation of mobile technology, 2022).
This untapped business potential, coupled with Australia's advanced rollout of 5G and its leading innovation role in some industries, makes Australia an ideal destination for global players seeking scalable returns from 5G-related investment.
Multibillion-dollar 5G opportunity for investors
After months of in-depth research and analysis, PwC has found that 5G in Australia has the potential to unlock billions of dollars in value-added uplift by 2030 across industries that include healthcare, mining, transport, manufacturing and utilities.
For example, Australia needs investment in 5G-enabled technologies to improve the efficiency of smart grids and enable real-time renewables trading marketplaces. This will help the country meet its carbon reduction goals and become a clean energy superpower.
In healthcare, there are opportunities to digitise the healthcare journey; secure cloud connectivity between onsite and offsite health applications, systems and devices; and transform remote health services.
In manufacturing, there is a need to digitise manufacturing sites and supply chains. In transport, Australia is looking to test 5G technology for smart transport infrastructure.
Investing in Australian 5G
Many businesses around the world have chosen Australia as a destination for investment in 5G and digital connectivity.
This includes Singaporean tech firm NCS, who are setting up a Cloud Centre of Excellence in Melbourne, Victoria. As part of this, NCS has committed to increasing its digital talent in Australia, focusing on capabilities such as 5G-enabled IoT applications, innovation and artificial intelligence.
There are two market entry pathways for businesses looking to invest in Australian 5G and digital connectivity.
Develop and test for 5G-enabled innovation
According to Mohammad Chowdhury, PwC Strategy&'s Telco, Media and Technology Leader, 'Australia is an ideal location to develop and test products and services to be deployed in other markets. It also presents a sizeable stand-alone investor opportunity in some industries, such as mining, health and renewables.'
The country's geographically broad footprint provides a unique environment to develop 5G products and services for other markets with dispersed populations, such as the central and mid-west US.
Collaborate with domestic industries and companies
5G innovation has accelerated in Australia due to collaborations and co-investments between companies and across industries. This creates a special advantage for R&D in Australia. In mining, for instance, there are opportunities to partner with Australia's world-leading miners to explore 5G to automate mining operations and improve safety.
Telstra recently collaborated with Ericsson and Microsoft to begin 5G-enabled edge compute trials earlier this year. Similarly, Australian technology companies M2M Connectivity and ARQ Group formed a partnership to deliver digital twin technology for mining companies looking to use 5G to increase production efficiency and lower operational costs.
Government and Industry support
The Australian Government supports innovation in 5G technologies that are critical to the digital economy. This includes the following incentives aimed at broadening regional 5G coverage:
- The Regional Connectivity Program (the RCP) is providing millions of dollars in Commonwealth funding for telecommunications infrastructure projects. The projects aim to boost digital connectivity across regional, rural, and remote Australia.
- The NSW Regional Digital Connectivity program has committed over A$400 million to improve regional connectivity through large-scale investment with the telecommunications industry.
- The Victorian Government has committed A$550 million through the Connecting Victoria This will see the Victorian Government partner with telecommunications providers to co-invest in developing and delivering new infrastructure for better mobile and broadband connectivity.
