At a glance
- Expanding 5G networks and more prevalent use of IoT devices have the potential to provide significant environmental benefits.
- Potential environmental benefits include less energy usage, lower transportation emissions, better utilization of agriculture resources and a reduction in carbon emissions in the manufacturing sector.
As the focus on environmental, social and governance initiatives continues to grow among companies, investors and consumers, 5G is poised to provide substantial environmental benefits relative to current and past network technologies.
The most commonly cited benefit of 5G is its improved speed over 4G networks. However, 5G networks are about more than simply streaming content faster or more efficiently uploading data to the cloud; they also offer significant improvements in latency, density and reliability. Those components finally provide a strong foundation on which enterprise users can drive greater process efficiencies, which will result in meaningful environmental improvements and provide valuable economic opportunities for telecom carriers and the middle market customers they serve.
Increased acceptance of IoT devices and migration to 5G networks will drive enterprise revenue and margin growth for the telecom industry. Bloomberg estimates that enterprise revenue among the three main U.S. carriers (AT&T, Verizon and T-Mobile) is poised to grow to $20.2 billion in 2026, up from $1.1 billion in 2021. Telecom carriers should also see margin expansion resulting from lower network operating costs, primarily driven by energy efficiencies.
To better understand how the transition to 5G translates to environmental benefits, it’s helpful to understand some of the key use cases, outlined in separate research from the Columbia Climate School and Qualcomm as well as Mobile UK, the trade association of the U.K.’s mobile network operators:
According to the Columbia Climate School, international standards have called for 5G to require much less energy to run than 4G, which means using less power while transmitting more data. For example, one kilowatt-hour of electricity is needed to download 300 high-definition movies in 4G; with 5G, one kWh can download 5,000 ultrahigh-definition movies.
New technology will allow IoT devices to power up and shut down automatically when not needed, conserving and optimizing energy used for appliances, transportation networks, buildings, factories, streetlights and residences. For example, smart electricity meters installed in the Empire State Building have helped cut energy costs by 38%.
Globally, transportation is responsible for 24% of carbon dioxide emissions. However, 5G networks can increase fuel efficiency in several ways:
- Networks will allow connected vehicles to synchronize speeds and enable truck platooning to reduce air resistance, resulting in a 7%−16% reduction in fuel use.
- 5G-connected infrastructure can better operate dynamically controlled intersections, streamlining the flow of traffic and reducing delays, potentially reducing energy demand by 13%−44%.
- Cellular vehicle-to-everything, or C-V2X, will serve as a foundation for vehicles to communicate with any network-connected devices around them (stoplights, crosswalks, pedestrians, other vehicles, etc.) and provide enhanced autonomous driving. The technology will improve fuel efficiency, safety and traffic flow by optimizing actions such as lane changes, speed, gear selection and acceleration.
- The use of drones for remote sensing and spraying can result in a 50% decrease in pesticide applied.
- Sensors may collect information on key agricultural variables, including temperature, moisture, light and humidity to support better decision-making and resource utilization.
Mobile UK estimates that 5G-enabled technology can help the combined G-7 manufacturing sectors reduce their total carbon emissions by 1% between 2020 and 2035. That equates to roughly 75% of the annual carbon emissions of France. This will be driven by certain 5G-supported efficiencies:
- The technology offers significant advancements in coverage density. One 5G cell can support up to 50,000 devices, such as sensors and actuators, allowing plant managers to meaningfully improve operational efficiencies.
- Inventory management systems supported by 5G will reduce the overall level of inventory needed. The smaller footprint required to support those operations will require less energy for lighting and cooling.
As we noted in our third-quarter 2021 Middle Market Business Index Environmental, Social and Governance Special Report, a majority of middle market organizations are taking action to incorporate ESG into their strategy and operations. With that in mind, 5G presents a valuable and cost-effective solution to support efforts to minimize environmental impact. The time is now for telecom carriers to help those organizations navigate the new technology offerings and realize the economic and environmental benefits they’ll provide.