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Despite the ongoing Covid-19 pandemic, connections to 5G networks worldwide will triple this year to 670 million and remain on track to reach 3.6 billion in 2025, according to research from technology analyst firm CCS Insight.
Putting behind it the effects of sluggish developments in certain territories during 2020, 5G is now expected to show strong adoption in the next 18 to 24 months, as macroeconomic recovery, accelerating network deployments and plummeting prices of 5G-capable phones combine with a greater appreciation for high-quality connectivity among consumers and businesses as the pandemic passes.
Looking at the top end of the growth spectrum, CCS Insight forecast that by the middle of the decade, more than three-quarters of mobile phones in the advanced markets of North America, Western Europe and Asia–Pacific will have transitioned to 5G networks.
The study showed South Korea and China as continuing to stand out for their excellent speed of deployment of 5G. It showed that as many as one-fifth of mobile phones in South Korea were on 5G networks already, and China was on course to achieve this milestone in 2021. CCS described the pace of 5G adoption in China as “astonishing”, with seven out of 10 smartphones sold in the first three months of 2021 featuring 5G capabilities.
After being first to launch 5G and then promoting it only tentatively for almost two years, US carriers have started pushing 5G hard in the past six months, particularly since 5G-capable iPhones became available. Thanks to this push, the country will regain its status of a 5G front-runner in 2021.
By contrast, progress in Western Europe has been mixed, with delays to spectrum auctions during the pandemic holding up network deployment in some markets, such as France, and what the analyst called government posturing over the role afforded to Huawei has brought uncertainty. However, these delays were not as lengthy as many feared, it said, and some operators have moved quickly to sign agreements with alternative providers of network infrastructure.
The analyst added that as a result of spectrum allocation, network progress and the growing prevalence of 5G phones, which will account for more than half of phone sales in the region in 2021, most Western European countries are now not too far behind the region’s pioneers, Switzerland, the UK, Finland and Germany.
Importantly, CCS stressed that 5G growth will not be confined to the most advanced markets in the next five years, even if less developed economies are slower to launch 5G as they continue to reap the benefits of 4G. India was cited as one such country, where fierce competition between mobile operators and ambitions for home-grown technology could lead the adoption of 5G.
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The research also showed that two other areas of growth for 5G have received plenty of attention, but will have limited a effect in the next five years. The internet of things (IoT) is set to benefit from 5G, but the pandemic has caused delays to standards and commercial deployment, so the number of connections in this space will remain unimpressive until at least 2025. Also, 5G fixed wireless access was likely to remain a niche technology, confined to a supporting role alongside traditional fixed-line networks in many markets, said CCS.
“Although our near-term expectations have been dented, we remain optimistic that the global mobile industry will overcome these temporary challenges and will achieve 3.6 billion 5G connections worldwide in 2025,” said Marina Koytcheva, vice-president of forecasting at CCS Insight, commenting on the study. “We have to give a nod to the role that smartphone-makers are playing in getting 5G handsets into people’s hands, with prices set to drop as low as $150 in 2022.
“The global mobile phone market was dealt a significant blow by the pandemic and shrank by 13% in 2020. Although its growth will remain sluggish in 2021 at just 6%, suppressed by volatile demand and short supply of major components, the 5G segment will flourish and one in three mobile phones sold worldwide in 2021 will feature 5G.”
But despite its optimism, the analyst said risks to the exact mode and speed of 5G adoption remain, ranging from the unpredictable nature of the pandemic and the uncertainties facing the world economy, to the short supply of components for smartphones and other smart devices. It did believe, however, that the mobile industry has firmly stepped on the path of upgrade to 5G and short-term challenges will do little to hinder its long-term progress.