5G will account for almost 60% of global mobile service revenues in 2026; China leads in 5G subscriptions with over 357 million users
5G will account for nearly 60% of global mobile service revenues in 2026, up 40% from volume subscriptions, according to findings from independent analyst and consultancy Omdia.
In his findings presented at the 5G Forum in Seville, Spain, Omdia senior media and entertainment director Maria Rua Aguete expects 5G subscriptions to increase in 2022 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 poised to grow over the next few years, driven by the rapid adoption of 5G devices and to increased spending by 5G customers as they increase their use of digital data and services, Aguete found.
Omdia predicts that 40% of all mobile subscriptions will be 5G, estimated at US$48 billion ($69 billion) by 2026.
Annual 5G mobile service revenue is expected to reach US$540.01 billion ($764 billion), or 60% of global mobile service revenue.
Growth in 5G mobile service revenues will drive overall mobile service revenues to $911.61 billion ($1.3 trillion) worldwide in 2026, from US$798.57 billion ($1.1 trillion). dollars) in 2019.
Who is leading the 5G race?
According to Aguete, China leads in 5G subscriptions in 2021 with 357 million subscribers, followed by the United States, Japan and South Korea. The UK is fifth with over nine million 5G connections.
Over 40% of South Korea’s population has a 5G connection in percentage terms. It is followed by Hong Kong at 39% and China at 30%. In the UK, only 8% of the population has 5G.
“In terms of monetizing 5G and increasing ARPU, although direct evidence of 5G impact on ARPU is still fragmented as 5G SIM card penetration remains low on many markets and COVID restrictions are lifted/reintroduced; Telcos should provide a strategy that makes 5G attractive to their users and that 5G is extremely likely to have an overall positive effect,” Aguete recommends.
Omdia identifies gaming, video streaming, augmented reality and virtual reality as key drivers for consumers to adopt 5G plans.
Telcos that weren’t interested in 5G developments mostly added a new pricing model as “data tiers”, simply adding additional data allowances to cater to a new or wider. “Speed levels” have also gained momentum in 2021.
Only 10% of operators offering 5G added 5G-rich services to 5G in 2021.
AIS Thailand claimed 2.2 million “high-value” 5G subscribers after two years of 5G launch and saw a corresponding increase in ARPU of around 10-15%, thanks to greater volume of data consumed and to additional benefits, namely AR/VR services, 5G cloud games and multiple SIM cards.
“Telecom operators should turn to bundle-rich 5G applications and services to drive demand and indicate consumer user needs for more advanced connectivity,” Aguete says.
This first appeared in the CommsWire subscription newsletter on May 12, 2022.
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