Global technology intelligence firm, ABI Research, forecasts that the 5G market will accelerate and reach 2.6 billion subscriptions in 2026, making a significant contribution to mobile operator revenue of US $942 billion.
“Driven by heavy investment of Chinese operators, China is the key contributor of 5G market, holding more than two-thirds of the worldwide 5G subscriptions at present. The United States is second in 5G adoption with more than 50 million subscribers, followed by leading markets Japan and South Korea. “Operators’ effort to expand 5G networks, combined with quickly increasing 5G smartphone penetration, will drive 5G subscriptions to reach 507 million at the end of 2021, almost double from 2020,” comments Khin Sandi Lynn, Industry Analyst of ABI Research.
5G key drivers
As well as rolling out their 5G networks, mobile operators implementing strategies to promote 5G adoption, and boost revenue, is a key driver in meeting the predicted 2.6 billion subscriptions in 2026 figure. For example, Verizon launched a “5G upgrade campaign”, a promotional program to encourage its customers to upgrade to 5G devices. China Mobile’s strategy was to launch a new set of applications, including 4K live streaming and cloud-based 5G games, to drive the 5G user base and revenue.
As the 5G user base continues to increase, some operators have witnessed improvement in the mobile average revenue per user (ARPU) in recent quarters. Similarly, 5G network deployments for industry verticals such as healthcare, automotive and smart transportation, industrial applications, etc., are expected to drive mobile operator revenue in the years to come.
Mobile traffic, mainly driven by the need to stay connected during the pandemic, surged almost 60% to exceed 591 exabytes in 2020. “Increasing use of mobile networks to access video content, digital payments, online retail, and video conferencing have been contributing to the traffic growth. Ongoing 5G rollouts will drive the adoption of higher data packages as well as the use of data intensive applications such as video streaming and gaming to fuel mobile traffic growth in the forecast period,” Lynn explains. Indeed, ABI Research forecasts that mobile traffic will expand more than 5 times in 2026 compared to 2020 and that more than half of mobile traffic will be generated by 5G networks.
New 5G services
As operators speed up 5G network infrastructure upgrades, it is important for operators to capture revenue-generating opportunities by forming new services. “While video is among the major drivers of higher-speed connectivity, the ability to bundle 5G mobile packages with AR/VR based services for education, healthcare, and social networking can boost 5G business potential in the consumer market. Leveraging 5G capability and end-to-end network slicing can also enable operators to capture enterprise opportunities to deliver performance-guaranteed services and maximize the ROI,” concludes Lynn.