Development of 5G networks and telecommunications cooperation in BRICS countries

Why are fifth-generation networks in the BRICS+ countries increasingly becoming an element of industrial infrastructure rather than merely a telecommunications technology? What 5G deployment models have already emerged within BRICS+, and how do they create different investment risk-return profiles? Read more in this TV BRICS article.

Where value is created in the 5G market

The shift toward an industrial model of 5G in the BRICS+ countries is driven by economic logic. The consumer segment offers a longer payback period in a number of emerging markets. As a result, growing attention is being paid to industrial applications of 5G. Manufacturing, logistics, and agriculture, by contrast, generate a measurable economic effect from 5G adoption: reduced downtime, optimised supply chains, and lower energy costs. That is precisely why fifth-generation networks are increasingly being deployed not for the mass consumer but for specific production tasks.

The BRICS+ countries are gradually transforming fifth-generation networks from a telecommunications technology into an element of industrial infrastructure. Different models of 5G deployment are taking shape within the group, and the market's development trajectory depends on countries' ability to combine investment, standards, and technological compatibility.

The investment structure of the 5G market is not limited to network construction. Economic value is created across several interconnected levels – from physical communications infrastructure to digital platforms and applied industry-specific solutions.

The foundation of the market is physical infrastructure: base stations, fibre-optic lines, data centres, and radio spectrum. This is where the bulk of capital expenditure (CapEx) is concentrated. Telecom operators in developing countries allocate, on average, 20–25 per cent of annual revenue to investment, forming a stable base for equipment suppliers and network solution providers.

The next level of value creation is directly tied to telecommunications networks and communication services. Beyond traditional mobile services, private fifth-generation networks – used in industry, logistics, ports, and energy – are playing an increasingly important role. In such projects, the network becomes part of the production process.

The third level consists of platform solutions: industrial Internet of Things (IoT), predictive analytics systems, and edge computing. It is at this level that data becomes a production resource used for management decision-making.

The fourth level comprises applied industry solutions: precision agriculture, smart cities, and digital twins of industrial facilities. It is here that digitalisation produces a measurable economic effect.

Semyon Tenyaev, an information technology expert, emphasises that 5G serves as the foundation for cross-cutting technologies – industrial IoT, artificial intelligence (AI), and big data processing.

"Together they form the toolkit for the digitalisation of industry and scientific and technological cooperation, making it possible to introduce smart factories, autonomous logistics, and predictive analytics systems," notes Semyon Tenyaev, founder of a major Russian professional social network for expert content. According to the expert, the development of such infrastructure will help strengthen the BRICS countries' technological competencies and expand their opportunities in the digital economy.

Growth in industrial traffic and the digital divide

The global telecommunications system is gradually shifting from a consumer-driven model to an industrial one. The main growth in traffic is being generated by logistics, energy, agriculture, and industrial production.

The Kazan Declaration of the 16th BRICS Summit cements this transformation: the group's leaders recognised the "crucial role of industrial partnership in accelerating economic growth" and expressed their intention to deepen cooperation in high-tech sectors, creating a direct mandate for investment in industrial digital infrastructure. These intentions build on the existing BRICS Digital Economy Partnership Framework (2022) – a framework document providing for strengthened cooperation in telecommunications infrastructure to ensure "safe, resilient, and affordable connectivity".

According to the International Telecommunication Union, global mobile internet traffic has grown by an average of 19 per cent annually since 2021. This is linked to growth in machine-to-machine data exchange, industrial IoT, and distributed computing systems.

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At the same time, a persistent digital divide remains. 5G coverage reaches 84 per cent in high-income countries, compared with just 4 per cent in low-income countries. The gap in data consumption per connection is 17.9 GB versus 2.2 GB per month. In high-income countries, 5G covers 89 per cent of urban residents and 59 per cent of rural residents, whereas in low-income countries, 5G is available to only 9 per cent of the urban population and is almost entirely absent in rural areas. This urban-rural divide creates additional investment risk: profitability of rural networks requires either government subsidies or a fundamentally different business model.

Semyon Tenyaev emphasises that the digital divide creates a structural skew in the investment attractiveness of BRICS+ countries, shaping different models of participation in the development of the digital economy.

The International Telecommunication Union reports that, in low-income countries, the share of income spent on a mobile broadband package is on average 22 times higher than in high-income countries. In other words, the poorer the country, the greater the share of income its residents are forced to spend on connectivity. This means that price elasticity of demand for 5G in the poorest BRICS+ countries is extremely low, and monetisation through consumer traffic there is virtually impossible without subsidies.

For investors, this creates a key asymmetry: return on investment in network infrastructure depends directly on the density of the digital economy. The 5G market within BRICS+ represents a collection of markets with differing capital intensity, monetisation speed, and risk profiles. An additional factor in investment attractiveness is the sheer scale of the BRICS+ market, which encompasses a significant share of the world's population and one of the largest aggregate mobile subscriber bases. Domestic demand creates conditions for accelerated adoption of digital services and the development of next-generation infrastructure.

Payback periods vary significantly depending on the monetisation model. Projects orientated toward the mass consumer market generally require a longer investment-return horizon. Private 5G networks deployed in industry and agriculture, by contrast, can pay back faster through direct savings on operating costs – though exact timelines depend on the density of industrial demand and the level of government support.

In sub-Saharan African countries with low fibre-optic infrastructure density, payback periods can exceed 10 years or require non-linear return models. At the same time, the average payback period for digital economy infrastructure projects is 5–10 years, comparable to traditional infrastructure assets – confirming their attractiveness to institutional investors. A key success factor is not only the availability of technology but also access to financing, fibre-optic infrastructure, and skilled personnel.

Thus, the 5G market in the BRICS+ countries and the broader Global South represents a collection of segments with varying capital intensity, monetisation speed, and risk levels.

China and India: models of digital sovereignty

China's model relies on centralised infrastructure deployment (CapEx) and the scale of its domestic market. The bulk of capital expenditure is borne by the state, which lowers the unit cost of technology and accelerates adoption.

China has deployed 4.04 million 5G base stations, giving it the largest 5G infrastructure among the BRICS+ countries. China is the BRICS technology leader in 5G, and Chinese companies hold a dominant position in the telecommunications equipment market. For recipient countries, this means rapid access to proven solutions and vendor financing but also a high degree of technological dependence on a single supplier, which limits room for competition and diversification.

Chinese technology companies play a key role in exporting 5G equipment and turnkey solutions to countries of the Global South. This ensures rapid network deployment but simultaneously deepens technological dependence on a limited number of suppliers.

According to Aleksander Dashichev, an expert on technological and digital sovereignty, civil society, and third-sector organisations, the difference between the two models is not only technological but also geopolitical in nature.

"China is capable of carrying out the full production cycle of network equipment and therefore has the ability to control the ecosystem in line with its long-term geopolitical ambitions. In this respect, the Chinese architecture is essentially synonymous with the Western one. India, at its current stage, is seeking to compensate for its lack of domestic network components by adopting OpenRAN to control the connection points between hardware and software," notes Aleksander Dashichev, junior research fellow at the Department of Social and Political Studies of the Institute of Europe of the Russian Academy of Sciences (IE RAS).

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India is forming a fundamentally different model – the development of a sovereign 4G/5G technology stack through a consortium led by the Centre for Development of Telematics (C-DOT). The stack is built on OpenRAN architecture – an international open radio access network standard that ensures interoperability of equipment from different manufacturers. This approach reduces dependence on individual vendors and provides modularity for network infrastructure.

OpenRAN gives countries a tool for reducing vendor dependence, but experts caution against idealising it. Aleksander Dashichev notes, "OpenRAN looks like a temporary solution, necessary only until the moment a so-called "proprietary", in-house development appears. The question of dependence is always relevant in technology: it's a constant game of minimising risk," the expert explains.

This has given rise to two distinct approaches: China's vertically integrated model and India's horizontally modular model, which requires a more mature local engineering ecosystem. However, the choice of 5G architecture is only the first level of decision-making. The second, equally significant question is how to finance network deployment and who will control the value created. The answers to these questions lie not in the technological but in the investment domain.

The market-orientated models of Brazil and South Africa

Brazil is developing a market-orientated model through spectrum auctions with investment obligations placed on operators. The regulatory approach of the National Telecommunications Agency (Anatel) is aimed at drawing in private capital and shifting CapEX risk toward operators.

A significant share of the country's territory remains outside 5G coverage, exacerbating regional inequality and requiring additional investment in rural infrastructure. The priority is the agro-industrial sector, where 5G is used for precision farming, agro-logistics, and monitoring production cycles. This creates a direct link between digital infrastructure and export cost structures. The Kazan Declaration reinforces the significance of this model: the BRICS+ countries agreed to develop cooperation on monitoring and early-warning systems for agriculture, which will require investment in data collection and connectivity.

South Africa is positioning itself as Africa's regional telecommunications hub. Its 5G spectrum release programme is coordinated by the Independent Communications Authority of South Africa. Limited fibre-optic infrastructure and a shortage of skilled personnel simultaneously create constraints and reinforce the country's importance as a digital traffic routing hub.

Saudi Arabia and the UAE: industrial and financial hubs

Saudi Arabia's experience in deploying private 5G networks presents practical interest to other countries in the group developing industrial digital infrastructure. As part of the Vision 2030 strategy, a private 5G model focused on industrial facilities is being developed. Networks are built for specific industrial tasks, which improves economic efficiency compared with the mass consumer segment.

The UAE is forming a multi-layered role in digital infrastructure: data centres, cloud services, and transit of digital traffic between Asia, Africa, and the Middle East. The country's sovereign wealth funds actively invest in technology and digital assets, lowering the cost of capital for infrastructure projects.

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The UAE's regulatory framework actively promotes public-private partnerships (PPP) in infrastructure projects, including telecommunications. Emirati legislation provides for special economic zones and free-trade clusters with preferential tax regimes, lowering the barrier to entry for foreign investors and further reducing operating costs for technology companies. Emirati state entities are able to finance capital-intensive projects without external debt, which lowers the cost of capital and accelerates payback.

The UAE performs the functions of a regional capital-placement and data-transit hub between Asia, Africa, and the Middle East. The Kazan Declaration directly supports this approach, calling for the development of sustainable transport and logistics infrastructure, which in today's context is impossible without a digital layer.

Thus, various models of 5G deployment have emerged within BRICS+. The Chinese model offers rapid scaling and low unit costs but creates high technological dependence for recipients. The Indian model reduces vendor risk through modularity and open standards but requires a mature engineering ecosystem. The Brazilian model ties 5G to specific industries, achieving payback through reduced export costs. The Saudi model is orientated toward contract-based industrial infrastructure with sovereign financing. The UAE acts as a financial and transit hub connecting Asia and Africa. Each of these models creates its own investment profile – ranging from low-margin but stable cash flow at the infrastructure level to high returns at the platform and application levels.

The financial model of 5G and a new investment architecture

The substantial cost of building 5G infrastructure is one of the main challenges facing the BRICS+ countries, and the success of deployment depends directly on the ability to attract private investment and use public-private partnership (PPP) mechanisms. Although the bulk of profitability is concentrated at the platform and application levels, infrastructure remains a necessary precondition for subsequent monetisation of digital services: without networks there is no data, and without data there are no platforms. Investment in physical infrastructure is therefore the entry ticket into the industrial 5G economy, even if most of the revenue will ultimately be generated at higher levels of the value chain.

Financing of digital infrastructure in BRICS+ is increasingly being carried out through blended finance models, combining state guarantees, development-institution capital, and private investment. Key instruments include lowering the cost of capital through development guarantees, improving project creditworthiness, and currency hedging. Access to vendor financing is one of the key factors determining the pace of network deployment in developing countries. Chinese companies actively use this mechanism, offering integrated "equipment plus financing" packages, which creates both opportunities for rapid deployment and risks of debt dependency.

Sovereign wealth funds from the Emirates, operating through PPPs, can act as co-investors in BRICS+ digital infrastructure projects, providing not only capital but also institutional expertise. The PPP model actively used in the UAE could be scaled to projects in other BRICS+ countries. The use of public-private partnership and project finance mechanisms is an optimal model for digital infrastructure, allowing state guarantees to be combined with market-based management efficiency. A direct mandate for this approach is found in the BRICS Digital Economy Partnership Framework, which calls for "encouraging resource mobilisation, including through public-private partnerships, to support digital infrastructure projects".

Abed Amiri, a representative of BRICS Hub in Iran and Russia and an expert on economic and technological cooperation among BRICS countries, digital transformation, and the use of AI in business, emphasises that PPP is the primary but strictly context-dependent mechanism.

"In developed and fast-growing economies, PPP acts as an innovation lever, where the state creates aggregated demand through smart city and industrial IoT programmes, while the private sector provides technological speed. In developing countries with a capital deficit, the model shifts toward joint public-private ownership, including state equity stakes in operators. A critical success factor for both groups is tying 5G projects to specific industry use cases – logistics, telemedicine, and energy management – since this is the only way a sustainable commercial model can take shape. Building a 'bare' network without applied content inevitably leads to failure, regardless of its organisational form," believes expert Amiri.

The Kazan Declaration calls on the New Development Bank (NDB) to expand the practice of providing sustainable, accessible, and cost-effective infrastructure projects. This creates a direct political impetus for financing digital infrastructure as a priority asset class. The NDB has the potential to become one of the key sources of financing for 5G infrastructure projects.

Abed Amiri views the New Development Bank not so much as a lender but as an institutional integrator. In his assessment, the bank finances projects in physical infrastructure – transport, energy, and smart cities – into which digital connectivity is embedded as a mandatory technological layer.

"The formation of a unified digital architecture in the BRICS+ countries is realistic not as unification but as a network of compatible national segments connected through distributed ledger protocols and bridges for settlements in central bank digital currencies. The architecture will be realised not as a monolithic system but as a fractal ecosystem in which the NDB plays the role of system integrator," the expert said.

Sovereign wealth funds of the Gulf states, including the UAE and Saudi Arabia, are acting as architects of industrial digital clusters. In Latin America, national development institutions are supporting the digitalisation of the agricultural sector.

The transition to a coordinated BRICS+ architecture and structural constraints

Within BRICS+, a need for infrastructure interoperability is emerging. Standards alignment, certification, and unification of network security requirements are becoming tools for reducing transaction costs.

At the 2024 BRICS summit in Kazan, it was declared necessary to ensure safe, resilient, stable, reliable, accessible, and affordable connectivity and to develop sustainable digital infrastructure as one of the priorities. The key mechanism identified for this is the BRICS Digital Economy Partnership Framework, which covers standardisation, cross-border data flows, and joint 5G projects. The declaration calls for harmonising approaches and standards and developing the interoperability of digital systems, which institutionally reduces the risk of fragmentation and creates the basis for a unified market for industrial connectivity.

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Moreover, at the BRICS Transport Working Group Meeting in June 2025, the group's countries affirmed the priority of digital transformation in the transport sector and created a new track for transport digitalisation. This confirms that demand for digital connectivity and common standards comes not only from the telecom industry but also from the transport sector – one of the largest consumers of industrial 5G.

Applying this architectural logic to the telecommunications sphere means that a unified market for industrial connectivity in BRICS+ is not a single network under one operator's control but a system of compatible national infrastructures operating according to agreed standards. It is precisely this approach that reduces political risk for investors: countries retain sovereignty over their infrastructure while gaining access to a shared market for digital services. Lower costs for cross-border data transmission support the development of digital services and the growing role of intangible assets in international investment flows.

Key risks

The main systemic risk is technological stratification between architect countries and technology-consumer countries. The dominance of a single vendor in a developing country's market can lead to a technological monopoly that limits opportunities for competition and innovation.

Additional constraints include a shortage of engineering personnel in network technologies and industrial IoT, fragmentation of software standards despite relative hardware-level harmonisation, and the dependence of individual countries on external digital platforms. Uneven 5G coverage could entrench economic inequality between urban and rural regions, creating long-term social and economic risks.

Experience with the BRICS logistics platform shows that the key risk is not technical incompatibility but the absence of common rules – including end-to-end digital corridors with simplified procedures and tariff coordination mechanisms. Without this, even compatible equipment does not guarantee the formation of a unified market.

An additional risk factor is the high share of energy costs in operating expenses (OPEX) – up to 30 per cent. In countries with unstable energy supply or high electricity prices, this creates additional pressure on project profitability and requires that energy risks be factored into financial models.

Probable outlook for the deployment of 5G for 2026–2030

The potential to form a coordinated architecture for industrial connectivity in BRICS+ does exist – as evidenced by the Kazan Declaration, the launch of practical tracks for transport digitalisation, and the experience of the multimodal logistics platform. However, realising this potential depends on the political will of member states and their readiness to compromise on standardisation and certification. Without this, the market will remain fragmented.

Coordination of 5G standards among the BRICS+ countries is forming not a unified market in the classical sense, but a zone of interoperability among disparate national infrastructures. Under these conditions, digital infrastructure is gradually acquiring the characteristics of traditional assets – long payback periods, a high share of capital expenditure, and dependence on PPP financing mechanisms.

The 2024 Kazan Declaration established the political foundation for this convergence, setting out the priority of safe, resilient, and affordable connectivity. Practical progress on this agenda is being reinforced through institutional mechanisms of BRICS, including the Digital Economy Partnership Framework and sector-specific digitalisation tracks, which are gradually moving standards coordination from a declarative to an applied level.

However, the current trajectory remains asymmetric. The BRICS+ countries are simultaneously showing signs of cooperation and deepening technological divergence: China is developing a centralised model of large-scale deployment, India a modular architecture based on open standards, Brazil and South Africa market-regulated and regionally orientated models, and the Middle Eastern countries are forming infrastructure-financial hubs for digital traffic.

The International Telecommunication Union reports that 74 per cent of the world's population – 6 billion people – already use the internet. The next billion connections will come from countries of the Global South, and it is there that a significant share of new demand for digital infrastructure may form over the next decade. As industrial traffic grows and the use of 5G expands in logistics, energy, and agriculture, the centre of economic value is shifting from the infrastructure level toward the platform and application layers. This is intensifying competition between technology ecosystems for control over the data and services that generate the bulk of profitability in the digital economy.

Over the 2026–2030 horizon, the most likely scenario remains one of partial fragmentation alongside the parallel development of coordination points. Full integration would require not only technological compatibility but also institutional convergence of regulatory and investment models, which remains limited under current conditions.

Thus, 5G within the BRICS+ space is ceasing to be purely a telecommunications technology and is becoming an element of investment architecture – one that will shape the distribution of capital, data, and technological influence in the emerging digital economy.

The article was prepared by Vakhit Niyazov