Forecast: 1.3bn 5G connections by YE22
May 9, 2022
According to research firm Omdia, 540 million 5G connections were reached at the end of 2021 and will pass 1.3 billion in 2022. 5G will account for almost 60 per cent of global mobile service revenues in 2026, coming from 40 per cent of subscriptions by volume. Omdia expects more 5G subscriptions to be added in 2022 than in three years since the technology was launched commercially (2019).
“Although 5G is still in its infancy, representing just five per cent of all mobile connections, 5G mobile service revenues are set for rapid growth over the coming few years, driven by rapid adoption of 5G devices and higher spending by 5G customers as they increase their usage of data and digital services,” OMDIA Senior Director Maria Rua Aguete, told delegates at the 5G Forum in Seville.
“We are expecting that by 2026 40 per cent of all mobile subscriptions will be 5G, totalling 4.8 billion. Furthermore, annual 5G mobile service revenues are expected to reach $540.01 billion (€530bn) worldwide by 2026, representing 60 per cent of global mobile revenues. The growth in 5G mobile service revenues will drive overall mobile service revenues to $911.61 billion globally in 2026, up from $798.57 billion in 2019.”
As to which countries lead the 5G race, Rua Aguete noted that China leads in 2021 with 357 million subscribers, followed by USA, Japan and South Korea. UK is in the fifth place with more than 9 million 5G connections.
“However, if we look at percentage of population with 5G connections, then South Korea is ahead as more than 40 per cent of the population has a 5G connection,” she advised. “South Korea is followed by Hong Kong at 39 per cent and China at 30 per cent. In the UK, only 8 per cent of the population has a 5G connection.”
Regarding 5G monetisation and increase in ARPU, Aguete said that although that direct evidence of the impact of 5G on ARPU is still fragmented, as 5G SIM penetration remains low in many markets and COVID restrictions are lifted/re-introduced, telcos should provide a strategy that makes 5G attractive to its users and that it is extremely likely that 5G will have an overall positive effect.
Omdia understands that gaming, streaming video, AR and VR are some of the key drivers for consumers to take 5G plans.
Telcos who were previously not engaged with 5G, have most frequently added a new pricing model as ‘data tiers’, simply by adding extra data allowances to cater for a new or wider audience. ‘Speed’ tiers have also gained momentum in 2021. Only 10 per cent of operators offering 5G have added 5G-rich services to 5G during 2021.
AIS Thailand claimed 2.2 million ‘high-value’ 5G subscribers after two years of the launch of 5G and have experienced a corresponding ARPU uplift of about 10-15 per cent, thanks to larger data volume consumed and additional benefits i.e., AR/VR services, 5G cloud games, and multiple SIMs.
Rua Aguete concluded her presentation by recommending that telcos look to bundle rich 5G apps and services to drive demand and sate consumer user-needs for more advanced connectivity.