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Emerging markets on par with rest of world in 5G roll-outs

Despite limited 4G penetration, so-called developing nations get on board with 5G faster than developed markets

Received wisdom has often suggested that, with a few exceptions, emerging markets have always been behind developed countries in adopting the latest-generation mobile networks, yet a study from ABI Research has found that when it comes to 5G subscriptions, emerging countries are defying the standard assumptions and displaying faster adoption.

ABI’s 5G in emerging markets application analysis report found that the compound annual growth rate (CAGR) of 5G subscriptions in emerging markets is predicted to be 26% between 2020 and 2030 – an impressive rate, according to the analyst, considering the global CAGR of 5G subscriptions is only a slightly higher 28% in the same period.

Looking at the drivers for growth, ABI noted that the underlying impediments on 5G deployment in emerging countries were based on the capital-intensive 5G infrastructure and the declining financial health of the emerging markets’ telecommunications sector. These factors, ABI said, were compounded when considering the additional logistical and financial factors for countries such as Vietnam or Thailand that have larger rural populations. Operators in these countries were advised to exhaust all options that can help alleviate the financial burden of 5G roll-out.

“The pace of the 5G roll-out in emerging markets will be expedited by a combination of regulatory enablement, enabling technologies, such as edge computing and OpenRAN (ORAN) , and the broader use cases that 5G brings forward,” said Miguel Castaneda, industry analyst at ABI Research.

ABI suggested that emerging countries should also pay heed to factors that contribute to the growing impetus of 5G roll-outs. Changing consumer demographics, the proliferation of smartphone usage and availability of affordable 5G devices have spurred an exponential increase in emerging countries’ data consumption.

Despite having a rural population of around 65%, ABI Research forecasts India’s mobile data traffic, based on 1.2 billion subscribers, to balloon to 160.4EB (exabytes) by 2025. If this growth is realised, the figure would exceed the combined mobile data traffic of developed countries such as South Korea, the UK and Germany in the same year, which is 159.7EB.

“Emerging countries that strongly rely on agriculture or manufacturing production would also stand to benefit from the digital transformation capabilities of 5G enterprise,” Castaneda added.

Looking at the ramifications of the surge in data consumption, device affordability, and potential of broader use cases should therefore prompt regulators and operators in adopting proactive strategies in establishing their respective 5G networks. Countries such as India and Vietnam are building their own 5G ecosystem through local telecommunication and software suppliers.

ABI said developments and innovations in fixed wireless access (FWA) created more financial incentives for 5G roll-out into rural regions and helped governments in emerging markets to fulfil their national coverage plans.

Moreover, the analysis noted that 5G-enabling technologies such as distributed edge computing, the ORAN initiative and network slicing have given emerging countries more tools in accelerating the pace of a more digitised economy. Regulators also play a critical role as they can initiate enabling policies and initiatives to improve the business case of 5G roll-out for financially strapped operators in these emerging countries.

“As the Covid-19 pandemic impacts the social fabric and economic activities of our countries, emerging markets are constantly reminded of the importance of a connected world. 5G will address the issue of supply chain resiliency and provide new business models in enterprises,” Castaneda concluded. “These deployments can serve as a great complementary technology for key national initiatives, such as the Thailand 4.0 Smart City Initiative, India’s Smart City Mission and the Vision of Indonesia 2045.”

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