Deloitte: $150B U.S. Fiber Infrastructure Investment for 5G

The U.S. needs $130 billion to $150 billion in fiber network expansion to be fully ready for 5G-based networks and to ensure that the digital economy’s benefits reach all Americans, according to a Deloitte report.

The suggested $130 billion to $150 billion fiber infrastructure investment is required in the U.S. to unleash innovation, close the digital divide, and fully prepare the country for 5G, according to a report from management consulting firm Deloitte. The report says the investment is needed over the next five to seven years to enable ‘deep fiber,’ or fiber infrastructure closer to the end user.

Much of the premise behind the report focuses on 5G, which requires a dense fiber network for backhaul and fronthaul. But it also stresses the discrepancy between rural and urban broadband options. Deloitte is calling on regulators and the broadband carrier community to address this issue, or risk losing leadership for the global digital economy opportunity.

Key Points:

– Future of connectivity remains uncertain in the U.S.; investment needed to ensure U.S. is 5G ready

– Vast discrepancies in choice, affordability and performance exist between rural, underserved and urban geographies

– Deep fiber paramount to unleashing wireless innovation, internet of things (IoT) functionality and immersive entertainment.


“Network infrastructure is among the key factors in a nation’s economic growth potential and status as an innovator, and ultimately in propelling our economy’s gross domestic product and job growth,” said Craig Wigginton, vice chairman and telecommunications sector leader, Deloitte & Touche LLP in a press release announcing the report.

“We see a 5G ready U.S. infrastructure as critical to enabling a range of other adjacent industries to compete globally and safeguard our digital economy.”

The report says the U.S. currently lacks the fiber infrastructure necessary to take advantage of 5G. Many tier one carriers, including Verizon, have expressed their plans to ramp up fiber investments. Deloitte seems to suggest it’s not enough.

The report notes that FTTP reaches less than one-third of U.S. homes, with only 39% of U.S. consumers having access to more than one provider who offers a 25 Mbps speed tier or higher. The situation is worse in rural communities, where 10 million rural homes do not have broadband of at least 25 Mbps. The FCC definition for broadband includes a minimum speed of 25 Mbps. Well sort of. It depends on where you live and whether your carrier receives Connect America Fund (CAF) support.

“It is essential that fiber gets deployed closer to the customer to enable next generation wireless and to ensure affordable high speed connectivity across urban, suburban and rural geographies,” said Dan Littmann, principal, Deloitte Consulting LLP in the press release.

The report calls for $35B to $40B for rural fiber infrastructure and $60B to $100B for what Deloitte calls ‘broadband competition.’ I assume broadband competition means enabling multiple broadband providers who offer speeds of 25 Mbps or more.

Deloitte suggests carriers consider “shared infrastructure” models, a play on open access perhaps. IoT presents integration and security opportunities, that Deloitte says carriers need to get better at exploiting. They also suggest, carriers partner with OTT players, inviting them to fund and own their own fiber optic networks.  This author believes that’s highly unlikely!

The report suggests that IP migration and regulatory reforms, while important, will not be enough to create the case for fiber deployment. Wireless, wireline and cable require creative new ways to monetize “last mile” access as an incentive for massive fiber deployment. The report contemplates three potential models:

  • Synergies between deep fiber and adjacent services in an “unlimited” world:  Gartner predicts that affluent households will have up to 500 connected devices by 2022. In some cases, IoT services offer the prospect of new revenue. However, most connected devices will require low bandwidth or be WiFi enabled and, therefore, may not provide carriers with incremental revenue. In such cases, carriers have an opportunity to increase revenue by offering integration, network security, and traffic management services within the increasingly complex mix of IoT devices and ecosystems.
  • Partnership between carriers and OTT players to fund deep fiber:  As limited fiber availability constrains increased wireless densification and fiber broadband, over the top players may choose to fund fiber deployment, including owning assets or forming partnerships with carriers.
  • Deep fiber as a financial investment: Insufficient supply of deep fiber and overwhelming demand growth are strong fundamentals for fiber investment.  As interest grows from nontraditional fiber investors, we expect shared infrastructure models to emerge for last mile fiber access. Fiber as leased real estate could allow carriers to maximize asset utilization.

fiber infrastructure investment

Communications Infrastructure Upgrade – The Need for Deep Fiber (Source: PRNewsfoto/Deloitte)


For regulators, Deloitte offers these suggestions, which on the surface are pretty light on the details:

  • Eliminating regulatory barriers that prevent carriers from operating a single IP network, impede deployment of additional fiber assets, or restrict the types of services that may be offered.
  • Avoiding regulation that limits carrier innovation in creating new monetization mechanisms.
  • Reforming the Universal Services Administrative Company internal operations to meet broader goals of expanding fiber infrastructure and addressing rural internet access to close the digital divide.