A new mobility report by Ericsson has predicted that by the end of 2020, more than 1 billion people will be living in 5G coverage areas, and 5G subscriptions are forecasted to reach 3.5 billion in 2026. Will 5G be mainstream in 2021?
5G commercialization is moving at a rapid pace. The 5G technology evolution is expected to revolutionize every industry as it will underpin healthcare, automotive systems, manufacturing, gaming experience, augmented reality, and IoT devices. The telecom industry has advanced its 5G efforts with an increase in the adoption of open-source software and multi-vendor collaboration for software-defined networking (SDN).Â
With an acceleration in 5G deployments worldwide, Ericsson released a new report called Ericsson Mobility reportOpens a new window , which revealed that by the end of 2020, 5G population coverage is projected to cover 15% of the world’s population and is forecasted to reach 60% in 2026. From the U.S., to Europe to China and the Asia Pacific, every country wants to dominate the lucrative 5G industry. Let us take a look at the growth of 5G in 2020.
China Will Lead 5G Subscriptions
Ericsson has forecasted that by the end of 2020, the number of 5G subscriptions will reach 220 million. This 5G uptake is expected faster than 4G (LTE), and the main factor contributing to this rise is China. Currently, North-East Asia has the highest 5G subscription penetration. As per the report, China’s 5G ambition is driven by a national strategic focus, tough competition between communication service providers (CSPs), and the availability of affordable 5G smartphones.Â
According to Gartner, Greater China leads the world in 5G developmentOpens a new window , with 49.4% worldwide investment in 2020 attributed to the region. Currently, the country’s three major telecommunications carriersï¼China Mobile, China Unicom, and China Telecom plan to spend $25 billion on 5G deploymentOpens a new window , and telecom equipment maker Huawei aims to establish 800,000 5G base stations by the end of 2020.
Zhang Jin, a researcher from the China Center for International Economic Exchanges, saidOpens a new window , â€œChina has actively promoted 5G construction and local consumers are also holding an open mind to embrace the technology, which laid a relatively solid foundation for 5G development in the country.â€
Is China’s massive 5G expansion a cause of worry for other countries?Â
Ron Westfall, senior analyst, and research director at Futurum Research, explainedOpens a new window , â€œI don’t view China’s early lead in 5G subscription as a cause for alarm among 5G decision makers outside of China in terms of geopolitical and economic competitiveness advisements.Â
â€œThis does not deny that China’s 5G moves need to be monitored closely on a constant basis due to major considerations such as national security and supply chain integrity. However, the 5G race is a marathon and not a sprint and it’s way too soon to declare China’s ecosystem an early winner in the contest.â€
The Growth of Fixed Wireless Access (FWA)
FWA Connections (2019 â€“ 2026)
Source: Ericsson Mobility ReportOpens a new window
5G FWA offers increased network capacity and high-speed internet over high-frequency mmWave, and it is expected to reach a market size of $88.5 billion by 2027Opens a new window . Ericsson has predicted that FWA connections will reach over 60 million by the end of 2020 and over 180 million by the end of 2026, accounting for 25% of total mobile network data traffic globally. The research found that FWA offerings have doubled since December 2018, with Western Europe showing the highest FWA adoption (93%) in October 2020, followed by North America (80%) and the Asia Pacific (48%).Â
The widespread adoption of FWA is due to the demand for high-resolution digital services, cost-effective broadband alternative, and wide network coverage with minimum power consumption and latency. With FWA, CSPs can offer high-speed broadband connection to rural and suburban areas, thus providing support to businesses where there is limited availability of fixed services, such as DSL, cable, and optical fiber.
5G Networks Will Introduce Critical IoT Connectivity
According to Ericsson’s report, 5G networks will introduce critical IoT, the enabler for various time-critical use cases. The company says critical IoT connectivity is needed for time-critical applications that demand data delivery within a specified time duration with a certain guarantee. Some of the time-critical use cases across various sectors include cloud gaming, healthcare, industrial automation, public safety, and transportation, which perform time-sensitive operations and demand reliable connectivity.
5G To Bolster Mobile Cloud Gaming
5G will play a crucial role in making cloud gaming a profitable business opportunity for gaming companies and CSPs. A poll conducted by the mobile video industry council revealed that cloud gaming will contribute 25-50% of 5G data trafficOpens a new window by 2022. By 2021, time-critical 5G communications ecosystem with end-to-end network slicing and edge computing will bolster cloud gaming services with a quality of experience (QoE).Â
Additionally, 5G will increase partnerships between CSPs, gaming service providers, and edge cloud providers and bolster future development of immersive gaming experiences. Currently, Microsoft partnered with SK Telecom for its Project xCloud cloud gaming service, while Google partnered with Verizon for Stadia Pro and NVIDIA partnered with LG U+ for its NVIDIA GeForce NOW service. These partnerships reveal that CSPs can create new revenue streams in cloud gaming services.
Global Mobile Data Traffic
Global Mobile Data Traffic (2015 â€“ 2026)
Source: Ericsson Mobility ReportOpens a new window
As per the Ericsson report, the global mobile data is expected to reach around 51EB per month by the end of 2020 and will grow by a factor of about 4.5 to reach 226EB per month in 2026. The explosion of mobile data traffic is due to improved device capabilities, data-intensive content, and large data plans. As per the report, 54% of the total mobile data traffic will be carried by 5G networks by 2026, further driving the adoption of VR and AR experience, video contents by over-the-top (OTT) platforms, and gaming services.
A recent World Economic Forum report concludedOpens a new window that 5G networks will contribute $13.2 trillion in economic value globally by 2035. With such high economic value, 5G is poised to bring a new era of digitization to society. Concrete 5G investments, acquisitions, and partnerships by the telecom industry can open new business opportunities and revenue streams. However, 2020 was supposed to be the year of 5G, but the pandemic slowed down those plans. Only time will reveal if 2021 will be the year when the world will enter the 5G era or if the telecom industry will only broaden its 5G strategies without an actual launch.