Friday, 13 May 2022 13:18

5G to account almost 60% of global mobile service revenues in 2026; China leads in 5G subscription with more than 357 million users

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5G will account for almost 60% of global mobile service revenues in 2026, up by 40% of subscriptions by volume, according to findings by independent analyst and consultancy firm Omdia.

In her findings presented at the 5G Forum in Seville, Spain, Omdia senior director media and entertainment Maria Rua Aguete expects 5G subscriptions to go up in 2022 since the technology was launched commercially in 2019.

Although 5G is still in its infancy, representing just 5% of all mobile connections, 5G mobile service revenues are poised to grow over the coming few years, driven by rapid adoption of 5G devices and higher spending by 5G customers as they increase their usage of data and digital services, Aguete found.

Omdia projects 40% of all mobile subscriptions will be 5G, estimated at US$48 billion ($69 billion) by 2026.

Annual 5G mobile service revenues are projected to reach US$540.01 billion ($764 billion) representing 60% of global mobile revenue services.

The growth in 5G mobile service revenues will drive overall mobile service revenues to $911.61 billion ($1.3 trillion) globally in 2026, up from US$798.57 billion ($1.1 trillion) in 2019.

Who leads the 5G race?
According to Aguete, China leads in 5G subscription in 2021 with 357 million subscribers, followed by US, Japan, and South Korea. The UK is fifth with more than nine million 5G connections.

More than 40% of the population of South Korea has a 5G connection in terms of percentage. It is followed by Hong Kong at 39%, and China at 30%. In the UK, only 8% of the population has 5G.

“Regarding 5G monetisation and increase in ARPU, although that direct evidence of the impact of 5G on ARPU is still fragmented, as 5G SIM penetration remains low in many markets and COVID restrictions are lifted/re-introduced; telcos should provide a strategy that makes 5G attractive to its users and that it is extremely likely that 5G will have an overall positive effect,” Aguete recommends.

Omdia identifies gaming, streaming video, AR, and VR as key drivers for consumers to take 5G plans.

Telcos who were not interested in 5G developments have mostly added a new pricing model as “data tiers,” simply by adding extra data allowances to cater for a new or wider audience. “Speed tiers” have also gained momentum in 2021.

Only 10% of operators offering 5G have added 5G-rich services to 5G during 2021.

AIS Thailand claimed 2.2 million “high-value” 5G subscribers after two years of the launch of 5G and have experienced a corresponding ARPU uplift of about 10-15%, thanks to larger data volume consumed and additional benefits i.e., AR/VR services, 5G cloud games, and multiple SIMs.

“Telcos should look to bundle-rich 5G apps and services to drive demand and state consumer user-needs for more advanced connectivity,” Aguete says.

This first appeared in the subscription newsletter CommsWire on 12 May 2022.

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