5G will account for 60% of global mobile service revenues in 2026: Omdia

Omdia said that South Korea leads in 5G coverage with 40% of the population, followed by Hong Kong and mainland China

5G will account for nearly 60% of global mobile services revenue in 2026, coming from 40% of subscription volume, according to Omdia.

Omdia expects more 5G subscriptions to be added in 2022 than in the past three years since the technology’s commercial launch in 2019.

“Although 5G is still in its infancy, accounting for only 5% of all mobile connections, 5G mobile service revenues are expected to experience rapid growth over the next few years, driven by the rapid adoption of 5G devices and increasing spending by 5G customers as they increase their use of data and digital services,” said Maria Rua Aguete, senior research director at Omdia.

“We predict that by 2026, 40% of all mobile subscriptions will be 5G, totaling 4.8 billion. In addition, annual 5G mobile service revenues are expected to reach $540.01 billion globally by 2026, accounting for 60% of global mobile phone revenues,” she added.

According to Omdia, the growth in 5G mobile service revenues will bring overall mobile service revenues to $911.61 billion worldwide in 2026, up from $798.57 billion in 2019.

China had 357 million 5G subscribers at the end of 2021, followed by the United States, Japan and South Korea.

However, in terms of the percentage of the population with 5G connections, South Korea leads, with over 40% of the population having a 5G connection. South Korea is followed by Hong Kong with 39% and China with 30% population coverage.

“In terms of monetizing 5G and increasing ARPU, although direct evidence of 5G’s impact on ARPU is still fragmented, as 5G SIM card penetration remains low on many markets and COVID restrictions are lifted/reintroduced, telecom operators should provide a strategy that makes 5G attractive to its users and that 5G is extremely likely to have an overall positive effect,” said the analyst.

Omdia also believes that gaming, video streaming, augmented reality and virtual reality are among the top factors driving consumers to select 5G plans. Telcos have more often adjusted their pricing models by adding additional data tiers or data allowances, or speed tiers, rather than new 5G-based services. The analyst advised operators to look to bundle “rich” 5G applications and services to drive demand.

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