Throughout 2023, some 30 new markets will launch 5G mobile services, making 5G a truly global technology that is much more than a connectivity speed upgrade
The rollout and adoption of 5G have been faster than that of previous mobile network generations. As of January 2023, 229 operators in 87 markets had launched mobile 5G services. Throughout 2023, some 30 new markets will launch 5G mobile services; importantly, many of these will be developing markets across Africa and Asia, making 5G a truly global technology and taking the total number of connections to 1.5 billion by the end of the year. 5G is expected to benefit the global economy by more than $950 billion in 2030, or more than 15% of the overall economic impact of mobile, according to latest research by GSMA – the organisation representing most of the global mobile industry.
Image:Estimated Global 5G contribution by 2030; Source:GSMA
Much of this benefit will materialise in developed regions, including East Asia and the Pacific, North America and Europe, which are expected to see strong growth in the next five years. Towards the end of the decade, low- and middle-income countries are expected to realise an increasing proportion of 5G economic benefits as the technology starts to achieve scale and widespread adoption.
Services & Manufacturing industries to gain
The services and manufacturing industries will benefit the most from 5G technologies over the next decade. The impacts on other economic sectors are expected to be of lower magnitude but will increase as they start to incorporate 5G use cases.
The technology is expected to benefit all economic sectors of the global economy, although some industries will benefit more than others due to their ability to incorporate 5G use cases in their business. Over the next 10 years, 46% of benefits are expected to be realised in the services sector and 33% in manufacturing, driven by applications such as smart factories, smart cities and smart grids.
As 5G adoption continues to scale, the monetisation imperative will grow, per GSMA Intelligence. Awareness of 5G is high, but a significant share of consumers still does not see a reason to pay a premium to upgrade from previous generations. GSMA Intelligence survey evidence suggests that around 50% of people see 5G as predominantly a speed upgrade rather than something genuinely new compared to 4G. This has led to increasing competition and price pressure, which can be seen in the form of retail prices for 5G tariffs that are often on a par with those for 4G (or at a small premium).
Digital services to drive revenue
The greatest opportunities for operators are likely to come from the link between mobile devices, 5G and digital services. GSMA Intelligence research shows that 5G users are more interested in adding digital services and entertainment content to their mobile contracts compared to 4G users (50% for 5G users across the nine categories of add-ons, compared to 38% for 4G users). This highlights how 5G can drive greater smartphone usage beyond communications services and facilitate new revenue opportunities for operators by developing their own services and partnering with third parties. Initiatives such as Verizon’s +Play demonstrate the range of content partnerships that operators can explore across entertainment, gaming, education, news, fitness and other areas.
The Metaverse opportunity
The Metaverse, which is still in its infancy, will nevertheless be a key driver for 5G adoption as it provides new opportunities for operators, with an increasing number of them taking steps to unlock potential new revenue streams across different market segments. These include new 5G monetisation opportunities and content delivery models, improved customer experience and device sales – such as the following:
- Orange Spain has launched a virtual store environment in the metaverse, offering the consumer the ability to browse and experience products.
- KT in South Korea has partnered with local start-up TCAG to create a Cloud-based streaming digital twin gallery, allowing users to explore various artworks in the Metaverse regardless of time and place.
- Telefónica has actively embraced the Metaverse and held its first Telefónica Metaverse Day in September 2022, where it provided more details about its Metaverse strategy and roadmap while showcasing a number of immersive experiences.
Although it is still early days for the Metaverse, over half of operators are working on defining their enterprise Metaverse agenda or have already done so. The respective figure for the consumer Metaverse is somewhat smaller (one in three), with operators in Asia Pacific leading the way compared to other regions (43% of operators in Asia Pacific versus 30% in North America, which comes in second place regionally). The proportion of operators without a Metaverse strategy (63% for consumer Metaverse and 43% for enterprise Metaverse) highlights the need for innovation and partnerships to identify use cases and network requirements.
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