Omdia: Concern for 5G evolution
February 24, 2023
5G subscriptions increased by 446 million in 2022 versus 592 million for 4G, thirteen years after 4G’s initial launch. Ahead of Mobile World Congress, Omdia research has found that only 31 per cent of mobile operators offered 5G in 2022. This is expected to rise to 59 per cent by the end of 2023 with 4G expected to dominate for many years.
Omdia forecasts global 4G subscriptions will begin to decline from 2024 onwards, while retaining a majority share of all mobile connections until 2027.
Multiple factors have slowed down the transition to 5G such as lower handset sales driven by cost-of-living crisis and inflation, poor network coverage, low performance gain perception , and lack of 5G specific applications. Furthermore, an increasing portion of mobile connections – approximately 30 per cent – are not handsets and will be slower to convert to 5G (e.g., IoT, connected tablets/laptops, wearables).
“5G subscription reporting in 2022 has led us to reduce our 2023 forecast by 7.2 per cent -approximately 150 million subscriptions,” advises Omdia Senior Market Forecaster, Garinder Shankrowalia. “We anticipate the industry will regain this loss from 2025, once global market conditions are improved.”
Omdia believes it is important for mobile operators to continue investing in next generation mobile networks to enable the application emergence and the overall digital economy to grow. However, having multiple cellular technologies running concurrently on mobile networks is having an adverse effect on operators whereby launching 5G increases complexity and cost for little return in the short term.
“There needs to be a ‘net-zero’ approach to network development, removing the old as the new gets deployed,” states Omdia Research Director Ronan de Renesse. “Operators are already starting to move capital from next generation network deployment to 3G decommission projects and digital transformation. Key stakeholders should remain realistic about the prospects for 5G and re-evaluate the business case before moving on to the next step.”
Omdia forecasts 5G will account for 5.9 billion subscriptions in 2027 equivalent to a population penetration of 70.9 per cent.