BRICS Nations Advance 5G Industrialization, Driving Telecommunications Cooperation
According to the International Desk of Webangah News Agency, BRICS Plus nations are progressively shifting their focus towards the industrial utilization of fifth-generation (5G) networks. This strategic move is underpinned by economic considerations, particularly in emerging markets where consumer sectors face longer investment return periods, thereby emphasizing the industrial applications of 5G technology.
Sectors such as manufacturing, logistics, and agriculture stand to benefit significantly from 5G deployment, with measurable economic impacts including reduced downtime, optimized supply chains, and lowered energy costs. Consequently, 5G networks are being developed for specific production tasks rather than solely for broad public consumption.
The BRICS Plus countries are transforming 5G networks from mere telecommunication technologies into integral components of industrial infrastructure. Various development models are emerging, with market progression contingent on each nation’s ability to integrate investment, standards, and technological compatibility.
Investment in the 5G market extends beyond network construction to encompass interconnected economic value across physical communication infrastructure, digital platforms, and sector-specific application solutions. The initial level of market investment focuses on physical infrastructure, including base stations, fiber optic lines, data centers, and frequency spectrum, which accounts for the majority of capital expenditures. Telecommunication operators in developing nations typically allocate 20-25% of their annual revenue to such investments, providing a stable foundation for equipment suppliers and network solution providers.
The second level directly involves telecommunication networks and connectivity services. Beyond traditional mobile services, private 5G networks are gaining prominence in industries, logistics, ports, and the energy sector, where the network becomes an intrinsic part of the production process. The third level comprises platform solutions like industrial Internet of Things (IIoT), predictive analytics systems, and edge computing, transforming data into a production resource for management decisions. The fourth level includes application solutions for precision agriculture, smart cities, and digital twins of industrial facilities, where digitalization yields quantifiable economic outcomes.
Semyon Tanaev, an IT expert, emphasizes that 5G serves as the foundational technology for comprehensive solutions including IIoT, artificial intelligence, and big data processing. These technologies collectively facilitate industrial digitalization and foster scientific and technological collaboration, enabling the creation of smart factories, automated logistics, and predictive analytics systems. The development of such infrastructure is expected to bolster the technological capabilities of BRICS nations and expand their opportunities in the digital economy.
The global telecommunications landscape is transitioning from a consumer-centric model to an industrial one, with significant traffic growth originating from logistics, energy, agriculture, and industrial production. The Kazan Declaration from the sixteenth BRICS summit validated this shift, with member states recognizing the vital role of industrial cooperation in accelerating economic growth and emphasizing enhanced collaboration in advanced technology sectors, directly paving the way for investments in industrial digital infrastructure.
This approach aligns with the BRICS Partnership on Digital Economy framework established in 2022, which champions enhanced cooperation in telecommunications infrastructure to ensure “secure, resilient, and affordable” connectivity. According to the International Telecommunication Union (ITU), global mobile internet traffic has grown by an average of 19% annually since 2021, driven by increased data exchange between machines, IIoT, and distributed processing systems.
Despite this growth, the digital divide persists. 5G coverage in high-income countries reaches 84% of the population, compared to just 4% in low-income countries. The disparity in data consumption per connection is also significant, with high-income countries averaging 17.9 GB per month versus 2.2 GB in low-income nations. In high-income countries, 5G covers 89% of urban populations and 59% of rural populations, whereas in low-income countries, it is accessible to only 9% of urban residents and is virtually absent in rural areas. This urban-rural gap presents higher investment risks, as rural network profitability may require government subsidies or distinct business models.
Tanaev notes that the digital divide creates structural imbalances in the investment attractiveness of BRICS Plus countries, shaping diverse models for participation in digital economy development. The ITU 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, indicating that poorer populations must allocate a larger portion of their income to connectivity access. This suggests a very low price elasticity of demand for 5G in the poorest BRICS Plus nations, making consumer traffic monetization practically impossible without subsidies.
For investors, this creates a fundamental asymmetry, as the return on network infrastructure investment is directly tied to the density of the digital economy. The 5G market within BRICS Plus represents a collection of markets with varying investment intensity, revenue generation speed, and risk levels. The sheer size of the BRICS Plus market is another significant factor, encompassing a substantial portion of the global population and a vast subscriber base, fostering domestic demand conducive to faster digital service adoption and next-generation infrastructure development.
The return on investment period also varies significantly depending on the revenue model. Projects targeting the mass consumer market typically require longer timelines, while private 5G networks deployed in industry and agriculture can achieve faster returns through direct operational cost reductions, although the exact payback period depends on industrial demand density and government support.
In sub-Saharan Africa, where fiber optic infrastructure density is low, the return on investment can exceed 10 years or necessitate non-linear revenue models. Nevertheless, the average payback period for digital economy infrastructure projects ranges from 5 to 10 years, comparable to traditional infrastructure assets and affirming their attractiveness to institutional investors. Key success factors include not only technological access but also financing, fiber optic infrastructure availability, and skilled human resources.
Consequently, the 5G market in BRICS Plus countries and the broader Global South presents a mosaic of sectors with distinct investment intensities, revenue generation speeds, and risk profiles. China’s model is characterized by centralized infrastructure deployment and a massive domestic market scale, with the government bearing a significant portion of capital costs, thereby reducing unit technology costs and accelerating adoption. China has deployed 4.04 million 5G base stations, possessing the largest 5G infrastructure among BRICS Plus nations and leading in 5G technology. Chinese companies also hold a dominant position in the telecommunications equipment market. For recipient countries, this offers rapid access to tested solutions and vendor financing, but it also fosters significant technological dependence, limiting competition and diversification.
Chinese technology firms play a crucial role in exporting 5G equipment and turnkey solutions to Global South countries, ensuring swift network deployment but increasing technological reliance on a limited number of suppliers. Alexander Dashichev, an expert in technological and digital governance, civil society, and third-sector organizations, points out that the difference between China’s and other models is not solely technological but also geopolitical. He argues that China’s ability to control the entire network equipment production cycle allows it to manage its ecosystem according to long-term geopolitical objectives, making its architecture fundamentally congruent with its own strategic goals, similar to how Western architectures align with Western objectives.
India, conversely, is striving to overcome its domestic network component shortages by adopting Open Radio Access Network (Open RAN) to gain control over hardware-software interfaces. India is pursuing an independent 4G and 5G technology chain through a consortium led by the Centre for Development of Telematics (C-DOT), based on Open RAN standards that ensure interoperability between equipment from various manufacturers. This approach reduces dependence on individual vendors and facilitates modular network infrastructure. While Open RAN offers a tool for reduced vendor dependency, experts caution against its idealization. Dashichev considers it a temporary solution until indigenous development emerges, emphasizing that technological dependency is inherent and continuous risk mitigation is key.
This leads to two distinct approaches: China’s vertically integrated model and India’s horizontal, modular model, which requires a more mature indigenous engineering ecosystem. The choice of 5G architecture is just the first decision; crucial questions remain regarding network deployment financing and value control, with answers rooted more in investment strategy than pure technology.
Brazil and South Africa adopt market-driven models. Brazil utilizes spectrum auctions and sets investment commitments for operators, aiming to attract private capital and transfer capital expenditure risks. However, a significant portion of Brazil remains outside 5G coverage, exacerbating regional disparities and necessitating further rural infrastructure investment. The agricultural sector and related industries are prioritized, with 5G applied to precision agriculture, logistics, and production cycle monitoring, directly impacting export cost structures. The Kazan statement reinforces this model by calling for cooperation in agricultural monitoring and early warning systems, requiring investment in data collection and communications.
South Africa positions itself as a regional telecommunications hub in Africa, with its 5G spectrum rollout coordinated by the Independent Communications Authority of South Africa. Limitations in fiber optic infrastructure and a shortage of specialized personnel create constraints while increasing the country’s importance as a digital traffic routing center.
Saudi Arabia and the UAE emerge as industrial and financial hubs. Saudi Arabia’s experience with private 5G network deployment holds practical significance for other BRICS Plus nations developing industrial digital infrastructure. Under its Vision 2030 strategy, private 5G models focus on industrial facilities, creating networks for specific industrial tasks that offer greater economic efficiency than mass consumer sectors. The UAE is shaping a multi-layered role in digital infrastructure, encompassing data centers, cloud services, and digital traffic transit between Asia, Africa, and the Middle East. Sovereign wealth funds actively invest in technology and digital assets, reducing the capital cost of infrastructure projects. The UAE’s regulatory framework actively promotes public-private partnerships in infrastructure, including telecommunications, by establishing special economic zones and free trade clusters with preferential tax regimes, thereby lowering barriers for foreign investors and operating costs for tech companies.
UAE government entities can finance capital-intensive projects without external debt, reducing capital costs and accelerating returns. The UAE also acts as a regional hub for capital deployment and data transit between Asia, Africa, and the Middle East. The Kazan statement supports this approach, calling for the development of sustainable transport and logistics infrastructure, which is indispensable in the current era without a digital layer.
Thus, diverse 5G development models have emerged within BRICS Plus. China’s model offers rapid scalability and low unit cost but leads to high technological dependence for recipients. India’s model, through modularity and open standards, reduces vendor dependency risk but requires a mature engineering ecosystem. Brazil’s model links 5G to specific industries, achieving returns through reduced export costs. Saudi Arabia’s model focuses on industrial infrastructure based on contracts and sovereign financing. The UAE, as a financial and data transit hub, connects Asia and Africa. Each model presents a distinct investment pattern, ranging from low-margin but stable cash flows at the infrastructure level to high returns at the platform and application levels.
The significant cost of building 5G infrastructure presents a major challenge for BRICS Plus nations, where success hinges on attracting private capital and leveraging public-private partnership (PPP) mechanisms. Although the bulk of profitability resides at the platform and application levels, infrastructure remains a prerequisite for subsequent digital service revenue generation; without a data network, there is no platform. Therefore, investment in physical infrastructure is the entry ticket to the 5G industrial economy, even if most revenue is ultimately generated at higher value chain levels.
Digital infrastructure financing in BRICS Plus is increasingly employing blended finance models that combine government guarantees, development finance institutions’ capital, and private investment. Key instruments include reducing capital costs through development guarantees, enhancing project creditworthiness, and covering currency risks. Vendor financing is also a critical determinant of network development speed in developing countries. Chinese companies actively utilize this mechanism, offering integrated “equipment plus financing” packages that present both opportunities for rapid network deployment and the risk of debt dependency.
UAE sovereign wealth funds, operating through PPPs, can serve as co-investors in BRICS Plus digital infrastructure projects, bringing institutional expertise alongside capital. The PPP model, widely adopted in the UAE, can be replicated in other BRICS Plus countries. Utilizing PPPs and project finance offers a suitable model for digital infrastructure, blending public guarantees with market-driven management efficiency. The Kazan statement urges the New Development Bank (NDB) to expand its practice of offering sustainable, accessible, and affordable infrastructure projects, creating direct political impetus for financing digital infrastructure as a priority asset class. The NDB could become a primary source of financing for 5G infrastructure projects.
Abdel Amiri, representative of the BRICS Center in Iran and Russia and an expert in economic and technological cooperation among BRICS countries, views digital transformation and AI adoption in business, and PPPs as crucial but context-dependent mechanisms. He believes that in developed and fast-growing economies, PPPs act as innovation levers, with governments creating aggregate demand through smart city and IIoT programs, and the private sector providing technological acceleration. In capital-scarce developing economies, this model shifts towards joint public-private ownership, including government stakes in operators. Amiri emphasizes that for both groups, linking 5G projects to specific industrial use cases such as logistics, remote medicine, and energy management is key to establishing a sustainable business model, stating that building a “raw” network without functional content, regardless of organizational structure, will ultimately lead to failure.
The Kazan statement’s call for the NDB to expand its practice of offering sustainable, accessible, and affordable infrastructure projects provides a direct political incentive to prioritize digital infrastructure financing. Amiri views the NDB not merely as a lender but as an institutional integrator, financing physical infrastructure projects in transportation, energy, and smart cities where digital communications are an essential technological layer. He suggests that the formation of an integrated digital architecture in BRICS Plus countries will not be through unification but rather a network of compatible national sectors connected by distributed ledger technology protocols and central bank digital currency (CBDC) settlement bridges. This architecture will manifest as a fractal ecosystem, with the NDB serving as the system integrator. Sovereign wealth funds in the Persian Gulf, including the UAE and Saudi Arabia, act as architects of industrial digital clusters, while in Latin America, national development institutions support agricultural digitalization.
The growing need for interoperability among infrastructures within BRICS Plus is driving the harmonization of standards, certification, and network security requirements as tools to reduce transaction costs. The 2024 BRICS summit in Kazan prioritized ensuring secure, resilient, stable, reliable, accessible, and affordable communications and developing sustainable digital infrastructure. The BRICS Partnership on Digital Economy framework, encompassing standardization, cross-border data flows, and joint 5G projects, is the primary mechanism identified for this goal. The Kazan Declaration stresses the alignment of approaches and standards and the development of digital system interoperability, which institutionally reduces the risk of fragmentation and paves the way for a unified industrial communications market.
Furthermore, the BRICS Transport Working Group meeting in June 2025 confirmed the priority of digital transformation in the transport sector, creating a new pathway for transport digitalization. This indicates that demand for digital communications and common standards extends beyond the telecommunications industry to the transport sector, a major consumer of industrial 5G. Applying this architectural logic to telecommunications implies that a unified industrial communications market in BRICS Plus will not be a single network controlled by one operator but a constellation of compatible national infrastructures operating under agreed-upon standards. This approach mitigates political risk for investors, allowing countries to retain sovereignty over their infrastructure while accessing a common market for digital services. Reducing the cost of cross-border data transmission also supports the development of digital services and the increased role of intangible assets in international investment flows.
The most significant systemic risk is the emergence of a technological gap between architect and technology consumer countries. The dominance of a single vendor in a developing country’s market can lead to technological monopolies, limiting competition and innovation. Other constraints include a shortage of network and IIoT engineering talent, fragmentation of software standards despite relative hardware coordination, and dependence on external digital platforms. Uneven 5G coverage can perpetuate economic inequality between urban and rural areas, creating long-term social and economic risks. The experience of the BRICS logistics platform highlights that the primary risk is not technical incompatibility but the absence of common rules, including cross-border digital corridors with simplified procedures and harmonized tariff mechanisms. Without these, even compatible equipment will not guarantee a unified market. The high energy cost share in operational expenses, up to 30%, is another risk factor. In countries with unstable energy supply or high electricity prices, this exerts additional pressure on project profitability and necessitates factoring energy risk into financial models.
The capacity to shape a harmonized industrial communications architecture within BRICS Plus exists, as evidenced by the Kazan Declaration and the multi-faceted BRICS logistics platform. However, realizing this capacity depends on the political will of member states and their readiness for compromise on standardization and certification. Without these steps, the market will remain fragmented. Harmonizing 5G standards among BRICS Plus countries will create a region of interoperability among diverse national infrastructures rather than a classic unified market. In such a scenario, digital infrastructure will gradually acquire characteristics of traditional assets, including long return on investment periods, a high share of capital costs, and reliance on PPP financing mechanisms.
The 2024 Kazan Declaration provided the political basis for this convergence by prioritizing secure, resilient, and affordable communications. Practical progress is being reinforced through BRICS institutional mechanisms, including the Partnership on Digital Economy framework and specialized digitalization pathways, gradually shifting standardization from stated positions to implementation. Nevertheless, the current trajectory remains asymmetrical, with BRICS Plus countries exhibiting signs of both cooperation and deeper technological divergence: China pursuing a centralized, large-scale deployment model, India an Open RAN-based modular architecture, Brazil and South Africa market-regulated models relying on regional capacities, and Middle Eastern countries establishing infrastructure and financial hubs for digital traffic transit.
The ITU reports that 74% of the global population, equivalent to 6 billion people, currently uses the internet. The next billion users will come from the Global South, and a significant portion of new digital infrastructure demand in the coming decade may arise from these regions. With increasing industrial traffic and expanded 5G use in logistics, energy, and agriculture, the economic value center is shifting from infrastructure to platform and application layers. This trend intensifies competition among technological ecosystems for control over data and services, which generate the bulk of the digital economy’s profitability. By 2026-2030, the most probable scenario remains relative fragmentation alongside the development of coordination points. Full integration requires not only technological compatibility but also institutional convergence in regulatory and investment models, which is currently limited. Ultimately, 5G within the BRICS Plus space is no longer merely a telecommunications technology but has become part of an investment architecture that will shape the distribution of capital, data, and technological influence in the nascent digital economy.
