Study: Commercial 5G in 94 markets
April 11, 2023
Commercial 5G launches rebounded in the second half of 2022 as operators in developing markets turned on their networks, according to research firm Kagan’s 5G Tracker, which lists at least 238 mobile operators serving 94 markets worldwide that had launched commercial 5G services as of year-end 2022.
Developing markets, especially in Africa, took the spotlight for recent commercial 5G launches as operators in many developed regions had already launched 5G in previous years. The switch from non-stand-alone (NSA) to stand-alone (SA) 5G is slowly picking up, but the lack of demand for 5G itself has caused some operators to be tentative on making the switch.
Ericsson and Nokia remained the leading 5G infrastructure vendors in terms of total customers and associated network deployments, while Huawei Technologies was still the leading vendor in terms of total 5G small cell unit shipments and related deployments, thanks to its massive home market, where more than 2.31 million 5G small cells were active at the end of December 2022.
Twenty-four new operators were added to this list in the second half of 2022. Africa had nine new launches in this period, the most since Kagan began tracking 5G launches in 2018. These included Orange SA in Botswana, Safaricom PLC in Kenya, Société Française de Radiotéléphone (SFR) SA in Réunion, MTN Group Ltd. in Nigeria and Zambia, Telkom SA SOC Ltd. in South Africa, Vodacom Group Ltd. in Tanzania and Unitel SA in Angola.
Unlike other regions, Africa has been lagging in 5G deployment due to poor existing infrastructure, late 4G adoption, ambiguous regulatory oversight and a variety of economic factors that have precluded companies from investing in the new technology. The African markets that have already launched commercial 5G services have done so with strong government support, especially in the release of spectrum and fostering a clear, forward-looking regulatory environment.
As most operators in developed markets have already deployed commercial 5G services, Kagan expects launches in the succeeding months to come from developing markets in Africa, Asia-Pacific, Eastern Europe and Latin America.
Vodafone Group PLC remains the leading 5G operator worldwide as its recent launch in Tanzania brought its worldwide 5G footprint to 15 markets. Vodafone, together with other multinational operators such as CK Hutchison Holdings Ltd. and Orange SA, are shifting gears from initial non-stand-alone, or NSA, to stand-alone, or SA, deployments.
At least 48 operators in 30 markets worldwide had launched commercial stand -alone 5G networks as of year-end 2022. Major operators in the USA — AT&T Inc., DISH Network Corp., T-Mobile US Inc. and Verizon Communications Inc. — and in mainland China — China Mobile Ltd., China Unicom and China Telecom Corp. Ltd. — have already launched SA 5G. Other markets where major operators have deployed SA 5G include Brazil, Canada, Italy, Japan and Singapore.
The ultimate drivers for the choice of NSA 5G over SA are cost and ease of deployment. NSA is cheaper and easier to deploy since it can utilise an existing 4G core network to connect to the 5G radio access network, or RAN. In contrast, SA 5G uses a dedicated 5G core network, which requires heftier investments in new infrastructure and equipment.
Deploying NSA 5G is a strategy for some operators to gauge initial demand for 5G before spending money on building an SA network. This is, however, a particular concern for many operators in developing markets where 4G adoption is still low. Deploying NSA 5G allows for backward compatibility, which means users with existing 4G devices will be able to connect to the network.
The lack of availability of spectrum specifically dedicated for 5G also contributed to the decisions made by those that deployed NSA 5G. Kagan especially saw this in 2020 when the onset of the COVID-19 pandemic cancelled most spectrum auctions and awards worldwide, which forced some operators to launch 5G using 4G spectrum through Dynamic Spectrum Sharing.
The 3GPP, the organisation responsible for developing the 5G standard, has defined a timeline for the deployment of SA 5G with an overly optimistic expectation that “most operators” worldwide will have deployed SA 5G by 2023. The transition from NSA to SA 5G, however, remains an operator-led endeavour worldwide, with each operator working on its own, slower timeline with no specific mandate from regulators.
Millimetre wave, or mmWave, 5G is still proving to be unpopular in many markets that have launched commercial 5G services, except for the US. As of December 2022, only 33 operators worldwide were using mmWave spectrum for their commercial 5G networks, most of which are in the U.S. and its overseas territories. One key outlier is Australia, where the National Broadband Network, NBN Co Ltd., is investing substantially in mmWave 5G technology.
Markets outside the US that have adopted mmWave, such as South Korea, have been burdened with the hefty capital and operating expense of dense mobile networks. Demand for 5G use cases best served by mmWave, such as low latency applications, remains low and still fails to make a compelling business case for using higher frequency bands. Even mainland China, the world’s largest 5G market, has not yet deployed mmWave 5G.
In contrast, at least 180 operators worldwide are using mid-band spectrum for 5G. Mid-band spectrum, specifically 3.5 GHz to 3.7 GHz, remains the initial spectrum of choice for many operators launching their first commercial 5G networks. Even some of those that initially launched with dynamic spectrum sharing 4G spectrum, such as operators in Eastern Europe and Latin America, have shifted their networks to 3.5 GHz to align with global standards.
The popularity of mid-band spectrum frequencies is mainly because of their adjacency to existing spectrum for 4G and later technologies, which makes them more amenable for mobile technology use as opposed to mmWave bands, which were only officially sanctioned by the International Telecommunication Union for mobile use in November 2019. On top of this, mid-band 5G has a mature ecosystem as a result of support from China and most European Union markets.
US operators have been aligning themselves with this trend following the successful auctions of mid-band spectrum by the FCC, namely Auction 105 (3.5 GHz CBRS) in August 2020, Auction 107 (3.7 GHz C-band) in February 2021 and Auction 110 (3.45 GHz) in January 2022. These auctions allowed AT&T and Verizon to beef up their mid-band 5G to compete with T-Mobile, which had a head start with its 2.5 GHz deployment for 5G.