Telecom operators will spend 80% of sector capital expenditure amounting to $890 billion on 5G networks over the next five years, said GSMA in a new report.
While 2020 saw some early slowdown in new 5G launches due to the pandemic, activity has recovered; 113 mobile operators have launched a 5G network in 48 countries, GSMA added in its Global Mobile Trends 2021 report.
Consumer adoption of 5G will reach 20% of global mobile connections by 2025. That said, adoption rates will be higher among countries at the forefront of 5G: the US, China, South Korea, Japan, the Gulf states, Australia and parts of Europe
The near-term outlook in 2021 depends, to a large extent, on the timing of an economic recovery from the pandemic given pressures on consumer incomes. However, a continued fall in 5G smartphone prices will help; in the GSMA Intelligence’s global consumer trends survey for 2020, 37% of consumers said they intended to upgrade to 5G, compared to 30% in 2019.
While the increase is welcome, it also highlights the challenge for the mobile industry to convince the mass market of 5G’s value compared to 4G.
On the enterprise front, 56% of operators see manufacturing as the highest potential for 5G, serviced with a mix of Internet of Things, cloud and private networks.
The Open RAN wave
As a new technology generation, 5G provides mobile operators with an opportunity to evolve or transform the way they build digital mobile networks. The timing of 5G also aligns with the availability and commercialization of open networking technologies, such as Open RAN (Radio Access Network). Open RAN is a paradigm shift in the way networks are made and operated. It helps the industry reduce costs and increase agility to unbundle network assets to monetize use cases such as edge compute. It also helps increase competition among network equipment vendors; 57% of operators intend to introduce new vendors into their network supplier roster.
4G is powering the mobile internet in emerging markets
By 2025, 4G will account for 57% of the global mobile customer base, by the far the largest share. Smartphone and 4G adoption are rising in many high growth emerging markets. For example, in India, the world’s second most populous country, smartphone penetration is now approximately 70%, with 85% of these smartphones running on 4G networks.
GSMA anticipates that the trend will continue over the next five years as smartphone prices fall and there is an increase in availability of local content to make the internet more relevant to users.
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