5G mobile networks to reach 25% of the world by 2030

The wireless industry is spending tens of billions dollars annually to install superfast 5G networks, but the first wave of the technology isn’t likely to reach most people in the next decade, according to a new report from consulting firm McKinsey.

At a total cost of $700 billion to $900 billion, the initial installations of 5G will cover 25% of the world’s population by 2030, or about 2 billion people, the report predicts. The coverage will be largely in wealthy and developed areas in the U.S., China, and Europe.

Those networks will bring download speeds 10-times faster than current 4G network and allow 100-times more devices to connect to each cell site, enabling new applications that will improve healthcare, manufacturing, and other industries. But because they require such expensive equipment, “these networks are likely to be limited to select geographies for the foreseeable future,” the report notes.

In the U.S., AT&T, Verizon, and T-Mobile have just begun rolling out 5G networks in some cities. The current coverage is uneven and will take several years to match the coverage of existing 4G networks. A recent Fortune test found download speeds for 5G varied widely, even in areas with the fastest 5G technologies installed. South Korea and China have many more cities connected to 5G.

A somewhat slower and cheaper type of 5G, using the same airwave bands as current 4G networks, will be able to reach 80% of the world’s population by 2030 at a cost of $400 billion to $500 billion, McKinsey forecasts. Although only slightly faster than current 4G networks, the slower 5G implementation will still foster many new applications thanks to greater capacity for connected devices and shorter delays in sending data back and forth.

“The economics work for providers to cover some 80 percent of the world’s population (approximately 7 billion people) with low- to mid-band 5G networks by 2030, although the level of quality will vary,” the report says.

That will reduce the portion of the population without adequate connectivity to 20% from 40% today, says Sree Ramaswamy, a partner at the McKinsey Global Institute. “The economic and social benefits would be profound, from improved access to mobile banking and credit to new educational opportunities,” Ramaswamy says.

That could add $1.5 trillion to $2 trillion to the global gross domestic product, which totaled $85 trillion in 2018.

Separately, the economic impact of 5G will also be significant in many industries, the report states. In just four areas—mobility, healthcare, manufacturing, and retail—the world’s gross domestic product could increase another $1.2 trillion to $2 trillion by 2030. Such gains will come from everything from reducing car accidents to remote diagnosis of medical patients to more efficient supply chain management. Those four sectors account for 30% of global GDP.

However, another new technology offering speedy connectivity could catch on and reach far more people, the report notes. Elon Musk’s SpaceX and Softbank Group’s OneWeb are launching thousands of small satellites into low Earth orbit, or LEO, in an effort to blanket the globe with cheap Internet coverage. Amazon also plans to join the Internet space race via its Project Kuiper.

“If LEO satellites are successfully deployed, they have the potential to change the game and almost erase the gap,” the report states. “Yet they remain a wild card—and other barriers such as readiness and the affordability of devices and data plans would need to be addressed in addition to coverage.”