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After being launched commercially in 2019, the next-generation mobile infrastructure juggernaut is steaming, with more 5G subscriptions to be added in 2022 than in the previous three years, leaping from 540 million 5G connections at the end of 2021 to more than 1.3 billion by the end of this year, research firm Omdia has said.
Furthermore, the study forecasts that 5G will account for almost three-fifths of global mobile service revenues in 2026, coming from 40% of subscriptions by volume.
Outlining the key drivers for the surge, Omdia senior director Maria Rua Aguete, speaking at the 5G Forum in Seville, said growth was being driven by the rapid adoption of 5G devices and higher spending by 5G customers as they increase their usage of data and digital services. “Although 5G is still in its infancy, representing just 5% of all mobile connections, 5G mobile service revenues are set for rapid growth over the coming few years,” she said.
“We are expecting that by 2026, 40% of all mobile subscriptions will be 5G, totalling 4.8 billion. Furthermore, annual 5G mobile service revenues are expected to reach $540.01bn worldwide by 2026, representing 60% of global mobile revenues. The growth in 5G mobile service revenues will drive overall mobile service revenues to $911.61bn globally in 2026, up from $798.57bn in 2019.”
Looking at the geographic territories leading the 5G race, the study found that China was in the lead in 2021 with 357 million subscribers, followed by the US, Japan and South Korea. The UK is in fifth place with more than nine million 5G connections.
However, the study also noted that looking at the industry in terms of percentage of population with 5G connections would make South Korea the leader, with more than 40% of the population having a 5G connection. South Korea was followed by Hong Kong at 39% and China at 30%. In the UK, only 8% of the population had a 5G connection.
Regarding 5G monetisation and increase in ARPU, the report said that direct evidence of the impact of 5G on ARPU was still fragmented, as 5G SIM penetration remains low in many markets and Covid restrictions are lifted and reintroduced. To respond to this, Aguete suggested that telcos should provide a strategy that makes 5G attractive to its users, and that it is extremely likely 5G will have an overall positive effect. Moreover, Omdia saw gaming, streaming video, augmented reality (AR) and virtual reality (VR) as some of the key drivers for consumers to have 5G plans.
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The study also found that telcos that had previously not engaged with 5G were those which had most frequently added a new pricing model as “data tiers”, simply by adding extra data allowances to cater for a new or wider audience.
While “speed tiers” also gained momentum in 2021, only 10% of operators offering 5G have added 5G-rich services to 5G during 2021. AIS Thailand was cited as an example of this, claiming 2.2 million “high-value” 5G subscribers two years after launching 5G, and is shown to have experienced a corresponding ARPU uplift of about 10-15%. This was thanks to larger data volume consumed and additional benefits such as AR/VR services, 5G cloud games and multiple SIMs.
Aguete concluded by recommending that telcos look to bundle-rich 5G apps and services to drive demand and satisfy consumer user-needs for more advanced connectivity.