CCS Insight forecasts that 5G connections will reach 1 billion worldwide in mid-2023, taking less time than 4G LTE to reach that milestone.
- As early as 2022, China will account for more than half of all 5G subscribers. By 2025 — following deployment in most world regions — it will still represent more than four in ten 5G connections globally.
- South Korea, Japan and the U.S. are fighting it out to be the first to launch commercial 5G networks, but China will take an early lead in the number of subscribers.
- 5G roll-out in Europe will trail by at least a year.
“We see China playing a far more influential role in 5G than it did in 4G. Size, scale and economic growth give China an obvious head start, but we expect network deployments to be much faster than in the early days of 4G,” CCS Insight VP of forecasting Marina Koytcheva said.
“China will dominate 5G thanks to its political ambition to lead technology development, the inexorable rise of local manufacturer Huawei and the breakneck speed at which consumers have upgraded to 4G connections in the recent past.”
As early as 2022, China will account for more than half of all 5G subscribers. Even by 2025 — following deployment in most world regions — it will still represent more than four in ten 5G connections globally. South Korea, Japan and the US are fighting it out to be the first to launch commercial 5G networks, but China will take an early lead in the number of subscribers. Despite the EU’s lofty ambitions, network roll-out in Europe will trail by at least a year.
The chart below provides a summary of CCS Insight’s 5G forecast:
5G subscriptions, 2018-2025
Source: CCS Insight Market Forecast: 5G Subscriptions, 2018-2015
In the longer term, CCS Insight sees 5G adoption taking a broadly similar path to 4G LTE technology. Subscriptions to 5G networks will reach 2.6 billion in 2025, equivalent to more than one in every five mobile connections. However, CCS Insight cautions there are still some uncertainties.
These include how and where network operators will deploy vast numbers of new base stations, the lack of clear business case for operators, and consumers’ willingness to upgrade their smartphones. In Europe, market fragmentation, the availability of spectrum and the influence of regulators bring additional challenges.
CCS Insight sees mobile broadband access on smartphones as the principal area of 5G adoption. By 2025, it will represent a colossal 99% of total 5G connections, according to the forecast.
“The unrelenting hype that has surrounded 5G for several years has seen a diverse range of applications put forward as the main drivers of adoption,” CCS Insight principal analyst for operators Kester Mann said.
“Some of them will be relevant at different times of the technology’s development, but the never-ending need for speed and people’s apparently limitless demand for video consumption will dominate 5G networks.”
Nevertheless, CCS Insight says fixed wireless access, positioned as a complementary service to fixed-line broadband, as 5G’s first commercial application (but not standardized by ITU-R or specified by 3GPP). The U.S. will be an early adopter, led by leading advocates like AT&T and Verizon. However, the long-term opportunity will remain small and the forecast sees it representing only a tiny fraction of total connections.
Despite the industry’s seeming obsession that in the future everything will be connected, 5G will account for a relatively low number of connections in the Internet of Things (IoT) during the forecast period.
Here, 4G networks will satisfy demand until narrowband technology is fully supported within the 5G standard. Network operators have only recently begun investing in LTE related LP-WAN technologies such as NB-IoT and Cat-M to support devices that have life spans of several years. Significant numbers of 5G connections in this area are unlikely before the second half of the 2020s, according to the forecast.
So called “mission critical” services such as autonomous driving — regularly touted as a “killer” application in 5G — will have to wait even longer to come to fruition.
Geoff Blaber, VP Research, Americas at CCS Insight commented that “5G is about creating a network that can scale up and adapt to radically new applications. For operators, network capacity is the near-term justification; the Internet of Things (IoT) and mission-critical services may not see exponential growth in the next few years but they remain a central part of the vision for 5G. Operators will have to carefully balance the period between investment and generating revenue from new services.”
5G enthusiasm in Asia:
“High-income Asian markets are likely to be among the first 5G markets,” says the GSMA Intelligence Unit report. “For Korea and Japan, their Olympics in 2018 and 2020 [respectively] provide global showcases. China has a national ICT agenda with 5G an integral part.”
But the industry body cautioned against expecting too much too soon. “We anticipate 5G adoption will take longer than 4G because of slower network rollouts and uncertainties around the value proposition relative to LTE,” says the report. “Europe is a possible exception. The EU sees 5G as an opportunity to retake a leadership position in technology, and even now 4G is still relatively immature.”
Lukasz Nowicki, a principal at research firm Delta Partners was bullish on APAC’s 5G prospects in an October 2017 research note. “From the moment Ericsson showcased the potential of 5G networks in a Swedish lab in 2014, operators, equipment vendors, and device manufacturers joined the chorus of 5G enthusiasts,” says Nowicki. “They praise the near-zero-latency and above 1Gbps speeds enabling the emergence of futuristic and aspirational use-cases like augmented reality, virtual reality, and low latency ultra-reliable IoT.”
“Asia is an attractive market for 5G, with the estimated number of users reaching 670 million by 2025, accounting for 60% of the global 5G market,” says Nowicki.