Tom Wang - stock.adobe.com

5G set for 2.6 billion subs by 2026

Increasing use of mobile networks to access video content, digital payments, online retail and video conferencing all contribute to 5G traffic growth, with ongoing roll-outs driving the adoption of higher data packages

Despite a slight decline in the worldwide mobile subscriber base resulting from the Covid-19 pandemic, global mobile network operators have continued to expand their 5G network deployments, hitting 264 million subscriptions by the end of 2020, and are set to reach 2.6 billion by 2026, ABI Research has said.

The forecasts are from the analyst’s Network Technology and Market Tracker, which calculated that mobile traffic surged almost 60% to exceed 591 exabytes in 2020, with one of the key dynamics being the need to stay connected during the pandemic. The analyst expects mobile traffic to expand more than five times in 2026 compared with 2020. More than half of mobile traffic will be generated by 5G networks.

And as the 5G market continues to accelerate, ABI believes it will make a “significant contribution” to total mobile operator revenue of US$942bn.

The analyst added that as the 5G user base continues to increase, some operators have witnessed improvement in the mobile average revenue per user (ARPU) in recent quarters. Similarly, it expected 5G network deployments for industry verticals such as healthcare, automotive and smart transportation, and industrial applications to drive mobile operator revenue in the years to come.

Looking at the regions that are driving 5G, the study noted that through heavy investment of local operators, China was found to be the key contributor of the 5G market, generating more than two-thirds of worldwide 5G subscriptions at present. The US was second in 5G adoption, with more than 50 million subscribers, followed by leading markets Japan and South Korea.

ABI also found that alongside 5G network roll-outs, mobile operators were rapidly implementing strategies to promote 5G adoption and boost revenue. It noted Verizon launching its “5G upgrade campaign”, a promotional programme to encourage its customers to upgrade to 5G devices. It also cited China Mobile, which launched applications such as 4K live streaming and cloud-based 5G games to drive the 5G user base and revenue.

“Increasing use of mobile networks to access video content, digital payments, online retail and video conferencing have been contributing to the traffic growth,” said Khin Sandi Lynn, industry analyst at ABI Research. “Ongoing 5G roll-outs will drive the adoption of higher data packages as well as the use of data-intensive applications such as video streaming and gaming to fuel mobile traffic growth in the forecast period.”

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Going forward, ABI noted that as operators speed up 5G network infrastructure upgrades, it was important for operators to capture revenue-generating opportunities by forming new services. It added that operators’ effort to expand 5G networks, combined with quickly increasing 5G smartphone penetration, will drive 5G subscriptions to reach 507 million at the end of 2021, almost double from 2020.

“While video is among the major drivers of higher speed connectivity, the ability to bundle 5G mobile packages with AR/VR [augmented reality/virtual reality]-based services for education, healthcare and social networking can boost 5G business potential in the consumer market,” said Lynn. “Leveraging 5G capability and end-to-end network slicing can also enable operators to capture enterprise opportunities to deliver performance-guaranteed services and maximise the ROI.”

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