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Despite the negative effects the Covid-19 coronavirus outbreak has had on essential equipment production, distribution, implementation and device availability, 5G prospects remain bright and are likely to experience little lasting damage going forward, according to research from CCS Insight.
Updating its previous forecast for the 5G market, made earlier in 2020, CCS Insight has predicted strong global adoption despite near-term delays. This is based on the assumption that the global mobile phone market will make a full recovery by 2022, with shipment numbers exceeding those in 2019.
CCS Insight’s long-range forecast calculates that global 5G connections will pass one billion in 2022, before surging to 3.2 billion by the end of 2025. This will be equivalent to nearly one mobile connection in every four worldwide in 2025. Rapid availability of 5G in lower priced smartphones will spur adoption despite wider challenges in the consumer electronics market.
Drilling deeper, the analyst said the current health crisis would have only a moderate and short-term effect on 5G adoption, caused by relatively minor delays in the roll-out of 5G networks and sale of spectrum, as well as macroeconomic uncertainty after governments lift lockdowns. These trends, it added, would be partially offset by widespread availability of 5G smartphones and accelerating momentum for 5G in China.
“The arrival of new chipsets and fierce competition in the shrinking global mobile phone market will lead to a quick introduction of 5G in more moderately priced smartphones in 2020,” said CCS Insight’s vice-president of forecasting, Marina Koytcheva. “We’re going to see prices of supporting devices tumble below $400 faster than previously expected, a trend that will be instrumental in 5G becoming more accessible to a much wider demographic.”
Beyond its prediction of short-term disruption in the first half of 2020, which will have some ripple effect in the rest of the year and into 2021, CCS Insight said it was clearer than ever that mobile networks are a critical part of national infrastructure. It expects investment in 5G to continue at speed in the next few years, as telecoms operators look to boost the capacity and efficiency of their networks. This is regarded as a leading source of optimism for 5G, in stark contrast with the current gloomy outlook threatening many other industries.
The study found that overall 5G momentum has continued in many countries, despite inevitable delays and restrictions caused by the pandemic. Adoption in South Korea was reported as remaining strong, with more than six million 5G connections about a year after the networks went live. Japan’s three main operators have now all launched 5G, albeit later than first expected. And in Europe, 5G networks are now up and running in 17 countries, including Belgium, the Netherlands, Norway, Poland and Sweden, which all saw their first commercial launches during the lockdowns.
Despite being the epicentre of the pandemic and seeing a subsequent massive hit to its electronics production facilities around the Wuhan area, such as those from Apple and other leading consumer electronics providers, China was said to be on track to reach almost 100 million 5G connections in 2020 and to pass the one billion mark by 2024. The research found that already two-fifths of handsets bought in China are 5G-enabled, with total 5G device sales on track to exceed 100 million in 2020. CCS Insight noted that network deployment continued to pick up pace too, as China pushed to deploy one million 5G base stations before the end of 2020.
“Strong desire from local operators to make up for delays caused by Covid-19 in the first quarter, combined with enthusiastic support from the government, wide availability of more affordable 5G handsets and the unrelenting ambition of local network equipment and handset manufacturer Huawei, will spur demand,” said Kester Mann, director of CCS Insight’s consumer and connectivity research division.
Yet despite these positive expectations for 5G, CCS Insight cautioned that global uncertainty caused by the pandemic meant its forecast also carried significant risk. It pointed out that potential downsides included slower-than-expected recovery of the mobile phone market; a longer or more severe global recession that halts purchases by consumers and businesses and telecoms operators’ ability to deploy networks at pace; escalation of the geopolitical tension that has ramped up during the crisis; and wider spread of misinformation and conspiracy theories that have led to mindless acts of violence against 5G infrastructure.
One specific area where CCS Insight said disruption to the world economy would noticeably slow adoption of 5G more is the industrial internet of things (IIoT), including smart cities. CCS Insight said industrial companies and city authorities were shifting their short-term priorities, which would lead to some delays in adoption of 5G connectivity, with China again a notable exception. The forecast showed that by 2025, 270 million IoT devices would be connected to 5G networks worldwide.
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