Despite geopolitical and macro-economic challenges, telecommunications service providers across the globe continue to invest in 5G.
This is according to the June 2023 Ericsson Mobility Report, which projects that 5G mobile subscriptions will reach 1.5 billion globally by the end of the year.
The projection is in line with GSMA Intelligence’s forecasts that 5G mobile connections will scale from 1 billion in 2022 to 1.5 billion in 2023, globally.
Ericsson’s bi-annual report indicates the latest figure will represent growth of 500 million subscriptions in one year.
Around the world, 240 commercial 5G networks have been launched so far, and around 35 have deployed or launched 5G standalone, it highlights.
By the end of 2028, Ericsson forecasts 5G subscriptions will reach 4.6 billion globally, making up more than 50% of all mobile subscriptions.
During the first quarter of 2023 (Q1 2023), the report indicates total 5G subscriptions reached 1.1 billion, up by 125 million.
The most notable 5G uptake is still concentrated in North America, becoming the region with the highest 5G subscription penetration at 41%.
In North East Asia, the penetration was 30%, followed by the Gulf Cooperation Council countries at 18% and Western Europe at 13%.
For the Sub-Saharan Africa region, 5G adoption is still nascent, with investments continuing to be channelled towards deploying 3G and 4G networks.
South African mobile network operators, for example, have begun rolling out 5G services in the country, albeit still mostly concentrated in the big cities.
According to the report, much like the rest of the globe, nations in Sub-Saharan Africa are expected to continue to invest in network infrastructure, driven by a large youthful population and high demand for connectivity.
Investments in network infrastructure, it states, will enable new growth opportunities for service providers, driven by advanced mobile data and value-added services, like mobile banking and payments.
“Migration to 4G networks continues. 4G will be the main contributor to new subscriptions up to 2028, accounting for more than half of all mobile subscriptions at the end of the period.
“While 2G remains an important technology in the region due to low-priced devices, affordability of service plans and a large number of rural subscribers, 2G subscriptions are projected to continuously decline between now and the end of 2028, at which point they will account for 29% of total subscriptions.
Angela Wamola, GSMA head of Sub-Saharan Africa, previously told ITWeb that many of the countries in the region are still putting their investments into deploying 3G and 4G.
In the case of 5G, it is forecast to have the fastest growth rate in subscriptions, attributed primarily to coming from a low base.
“More than 10 countries in Sub-Saharan Africa have launched commercial 5G networks to date, with more planned, raising the forecast for 5G subscriptions to 13% of the total subscription base in 2028,” states the Ericsson report.
5G business value
Based on the report, service providers in the top 20 5G markets have seen a 7% revenue increase in the past two years.
To determine the findings for revenue gains, the Ericsson report states that a list of the top 20 5G markets was identified, based on 5G subscription penetration ranking.
For each service provider in these markets, relative revenue development was calculated, using the first quarter of 2017 as a reference point.
Based on the analysis, there is a strong correlation between increased 5G subscription penetration and service revenue, it notes.
When data from Q4 2022 is added to previous analysis, it is evident the positive revenue trend is continuing.
“The launch of 5G services in the top 20 5G markets is followed by positive revenue development of 3.5% compound annual growth rate over the last two years, or a total of 7%.”
According to the report, historically, service providers have found it challenging to increase consumer prices for mobile subscriptions in line with inflation.
“With the current surge of inflation across many areas, some service providers have now started to adjust their tariffs in relation to the consumer price index. So far, adjustments have been significantly lower than inflation and this practice is still far from commonplace.”
The report states 5G has created new value for consumer and enterprise customers, with service offerings of larger data buckets, higher speeds and improved user experiences.
“For service providers, the additional value provided to consumers and enterprises translates into opportunities for upsell and revenue increase.
“As 5G networks and ecosystems mature, with more services and applications being developed and offered, even more value for customers will be unlocked.”