5G to shape mobile industry in 2020

Even though 2019 was a pivotal year for fifth-generation (5G) technology, the latest mobile generation will start to move the needle in 2020.

This is one of the highlights in the latest GSMA report, titled: The Mobile Economy 2020, compiled by GSMA Intelligence, the research arm of the GSMA. The report provides the latest insights on the state of the mobile industry worldwide.

The race to deploy 5G intensified over the past year, with the Trump administration rallying its allies to cut Huawei out of planned 5G networks amid a trade war with China. The Chinese telecoms giant has managed to shrug off the cross-fire, getting a boost from countries like the UK and SA.

GSMA Intelligence forecasts indicate there will be 1.8 billion 5G connections by 2025, representing 20% of total mobile connections across the globe. “5G is gaining pace. It is now live in 24 markets, numerous 5G smartphones have been launched, and 5G awareness and the intention to upgrade among consumers are both on the rise.

“By 2025, 5G will account for 20% of global connections, with take-up particularly strong across developed Asia, North America and Europe. To support this generational shift and further drive consumer engagement, operators are expected to invest around $1.1 trillion worldwide between 2020 and 2025 in mobile capex, roughly 80% of which will be in 5G networks.”

The Sub-Saharan Africa region; however, will only see 31 million 5G connections by 2025, which is 3% of the global average, predicts the report.

In SA, telecoms regulator, the Independent Communications Authority of SA, is finalising plans to auction 4G and 5G spectrum bands. The Department of Communications and Digital Technologies has also partnered with Huawei SA in 5G efforts, kick-starting 5G training for a group of 100 final-year IT students at Walter Sisulu University last month.

According to GSMA Intelligence, 5G will gather steam in Latin America, Commonwealth of Independent States and parts of Africa in 2023 and beyond.

The report points to the Internet of things (IOT) being an integral part of the 5G era. “Between 2019 and 2025, the number of global IOT connections will more than double to almost 25 billion, while global IOT revenue will more than triple to $1.1 trillion.

“The smart home is a critical battleground, with fragmentation being a major challenge to integration and adoption. There are, however, early signs that smart speakers could be at the centre of a smart home revolution in 2020.”

Mobile continues to make a significant contribution to the global economy, notes the report.

In 2019, mobile technologies and services generated $4.1 trillion of economic value added, which is 4.7% of gross domestic product, across the globe.

This figure will reach $4.9 trillion by 2024 as countries increasingly benefit from the improvements in productivity and efficiency brought about by increased take-up of mobile services.

“The mobile ecosystem also supported 30 million jobs, directly and indirectly, and made a substantial contribution to the funding of the public sector, with $490 billion raised through general taxation. By 2024, mobile’s contribution will grow by $820 billion, approaching $5 trillion, and accounting for 4.9% of GDP.

“Further ahead, 5G technologies are expected to contribute $2.2 trillion to the global economy between 2024 and 2034. Crucial sectors such as manufacturing or utilities (particularly in China) and professional or financial services (especially in MENA and North America) will benefit the most from the new technology.”

Data from GSMA Intelligence shows there will be more than 600 million new subscribers by 2025, with nearly two-thirds from Asia-Pacific and Sub-Saharan Africa.

Currently, the world counts 5.2 billion unique mobile subscribers. By 2025, that number will reach 5.8 billion, meaning 70% of the global population will be subscribed to mobile services, indicates the report.

Furthermore, four in five connections globally will be smartphones by 2025, with smartphone connections in Sub-Saharan Africa expected to nearly double.

The report further foresees 1.2 billion more people will be using mobile Internet by 2025, moving from 3.8 billion in 2019 to 5 billion over the next five years.

Global mobile data usage will grow almost fourfold by 2025, spurred by increased smartphone adoption and availability of affordable high-speed network services, it states.

“By the end of 2019, 5.2 billion people subscribed to mobile services, accounting for 67% of the global population. Adding new subscribers is increasingly difficult as markets become saturated and the economics of reaching rural populations become more difficult to justify in a challenging financial climate for mobile operators.

“Despite this, there will be around 600 million new subscribers by 2025 – mostly in India, China, Pakistan and Nigeria – for a total of 5.8 billion subscribers to mobile services.”

* Graphics courtesy of GSMA Intelligence.