More than a quarter of all mobile connections in the world would boast 5G within the next five years though the existing 4G technology would be the preferred medium globally and may not pass into history any time in the near future, says the GSMA in its annual state of the global mobile economy report (click to download the report).
The GSM Association, which represents the interests of mobile network operators globally, says the technology that delivers 100x faster speeds compared to 4G/LTE would spread to 39 countries in addition to the 24 markets where it is currently available. There would be 1.8 billion 5G connections by 2025, it says.
The report predicts that developed regions of Asia would lead the march with over half the phone users switching to the new technology followed by North America where 48% of the users are likely to shift. The pace would be slower in the developing regions of Asia where just about a quarter of the users would move over to the faster network.
In its report last year, GSMA didn’t push specific numbers for 5G adoption despite the fact that it had appeared on the horizon by end-2018 in South Korea and parts of the US. However, this time round, it has put specific numbers to the growth. For example, it says 79 operators across 39 additional markets would launch 5G services over the next five years.
However, the report also predicts that 4G would continue to dominate mobile technology globally. With over 4 billion connections in 2019 accounting for 52% of all connectivity, the 4G story would continue to get better, peaking at just under 60% of all connections over the next three years.
Currently, more than half of the global population are users of the mobile internet and this number would grow to 61% by 2025, the report says adding that 5G would continue to spread across urban centres only due to higher paying capacity in this region. Also, the slow movement towards 5G enabled smartphones could also impact growth.
“The number of live 5G markets is increasing by the day and consumers’ awareness of the technology is also growing as hype makes way for reality. However, there is wide variation across the globe in terms of intentions to upgrade to 5G and the willingness to pay more for it,” the report says.
“In general, consumers in South Korea and China – having witnessed some of the earliest launches – appear to be the most excited by the prospect of upgrading to 5G, while those in the US, Europe and Japan seem more content with 4G for the time being,” the report says adding that “5G is still in its infancy though; as more tangible use cases are deployed, more consumers will appreciate the benefits of 5G.”
Though the report reiterates that 5G adoption would grow as its benefits become visible, it points to the slow pace of awareness around the technology, suggesting that even increased knowledge about the usefulness need not translate into actions to upgrade or even intentions to do so.
Currently less than 35% of adults in the developed markets with high levels of awareness are showing signs of upgrading. The US market, which has a high level of awareness about 5G has just about 40% of people ready to pay more for the technology.
GSMA says more needs to be done to raise awareness that 5G brings much more than higher data speeds. “Governments and regulators must play their part to help propel 5G into commercial use by implementing policies that encourage advanced technologies (e.g. AI and IoT) to be applied across all economic sectors,”
One way could be through deeper IoT penetration. GSMA believes billions more IoT devices will arrive over the next five years. Between 2019 and 2025 the number of global IoT connections will more than double to almost 25 billion, while global IoT revenue to more than triple to $1.1 trillion, the report adds.
The report touches upon operator revenues stating that revenue growth as a percentage remains in the low single digits. “As core telecoms revenue stagnates, a common strategy now for major operator groups is to seek revenue growth from adjacent services. Pay TV, media, IoT, enterprise solutions and the broader array of digital services still only account for a minor share of operator revenues (10–20% for most), although there are a few notable exceptions, largely enabled by M&A activity.”
Which could explain why GSMA’s top prediction for 2025 includes one that suggests the breaking up of Google, Apple, Facebook and Amazon into smaller entities.