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Super fast 5G cellular networks are hot as major wireless carriers from Verizon to AT&T deploy the service, but it’s unclear if the infrastructure is in place for in-home 5G to replace current cable-based broadband.
The 5G-enabled future seems kind of distant. Real estate developers would need to put fiber-optic cables in homes and office buildings, since 5G doesn’t pass through walls, windows, or people. And most developers are not constructing projects or retrofitting existing properties that would allow 5G to be delivered to homes because it’s simply too expensive to implement.
“Not many developers that we speak to are taking 5G into account when constructing new ground-up developments,” said Chen Konfino, founder of Younity, a Tel Aviv-based company that installs internet infrastructure in multifamily buildings.
Fiber-optic cables, which run through the walls and the floors of buildings, are required to receive 5G signals indoors, according to Dan Littman, principal of technology, media and telecommunications at Deloitte Consulting LLP. And only some developers like The Related Companies are willing to pay for the infrastructure. Related’s massive Hudson Yards 28-acre mixed-use development in New York City is wired for 5G.
Installation is too pricey
Most builders just opt for traditional internet solutions because it’s affordable. Between conduits, splices, cables, and installation, 5G capability can be a five- or six-figure investment.
From 2003 to 2017, the median budget for a fiber-optic cable installation project, ranging from .6 to 10 miles of cable, was $66,940, according to a U.S. Department of Transportation survey of 150 fiber optic installations. Konfino said he recently completed two fiber-optic cable installations in 30- to 40-foot buildings for about $100,000 each.
Even retrofitting existing buildings is a pricey endeavor. It costs about 30% more than a regular renovation, taking into account demolition, renovation, and improved telecommunication closets, said Konfino. And the costs skyrocket when a building is more than a mile away from the closest fiber-optic internet line, according to a post by Atlantech, a Maryland-based fiber optics and telecommunications company.
The return on investment
As one of the few developers making 5G-enabled properties like Boston’s Lovejoy Wharf luxury condominiums and New York City’s Equinox Hotel, Related said the high costs are worth the investment.
“Expense is always a factor. We would never mindlessly invest in infrastructure that we didn’t think would be foundationally important,” said Scott Evans, chief digital officer of Related. Fiber-optic cables will only become increasingly necessary as the infrastructure behind future innovations, added Kenneth Finnegan, chief technology officer of Related.