14% Global SSA
1.5.2 Regional/Country 5G forecasts
Wide variations in 5G adoption
GSMAi forecasts significant regional variances in 5G adoption. This is driven primarily by the readiness of local markets for 5G, as well as the desire of both operators and governments in each region to be seen
as leaders in the 5G era. The GSMA provides deeper coverage of 5G developments in the regional 5G reports and the Mobile Economy reports.
FIGURE 1.5.2
REGIONAL 5G ADOPTIONS BY 2025, EXCLUDING IOT AND FWA CONNECTIONS (SOURCE: GSMA INTELLIGENCE)
1.5.2.1 US: leading in 5G adoption
North America, and specifically the US, will have the highest rate of 5G adoption, driven by early launches and the propensity of domestic consumers to rapidly adopt new technologies. By 2025, GSMAi forecasts 202 million 5G connections (predominantly smartphones) in North America, amounting to almost half of the mobile connections.
US mobile operators are targeting a phased approach to 5G network deployments, beginning with an NSA architecture, where 4G and 5G radio access technologies will be used in tandem. The provision of enhanced mobile broadband to the consumer market will be the core proposition in early 5G deployments in the US, with massive IoT and ultra-reliable, low-latency communications gaining scale at a later stage.
5G-based fixed wireless, as well as 5G-based services targeted at the enterprise sector, represent major opportunities for incremental operator revenue in the US. 5G offers a potentially lower cost and faster
means – compared to FTTH – of expanding high-speed offerings to households and businesses in some areas.
US operators are already working with other tech players and industrial companies to bridge ICT and vertical industries, and establish new solutions that can be initially tested and implemented on 4G networks with a view to exploiting enhanced 5G capabilities in the future.
1.5.2.2 Japan: accelerating 5G deployment Japan will closely follow the US on adoption, with forecasts of around 49% of connections being 5G by 2025, for a total of 95 million connections. Operators in the country have accelerated their deployment plans in recent months, with indications of limited commercial service in 2019 including a range of services during the Rugby World Cup running from September to November. This would represent an acceleration of previously communicated plans to showcase services during the summer Olympics of 2020.
Introducing the 5G Era
48
1.5.2.3 South Korea: aggressive and concerted 5G launch
South Korean operators (SK Telecom, Korea Telecom and LG U+) launched the world’s first commercial 5G services on smartphones in April 2019. They had earlier set a March 2019 date for commercial launch but surprised many with the announcement that their 5G services went live, although with limited coverage and focused on enterprise solutions, in December 2018. The accelerated deployment is a testament to Korea’s reaction to the intensifying global race to usher in the 5G era and its push for global leadership. In September 2017, SK Telecom showcased 360 degree video over pre-commercial 5G network in Seoul near Myoung-Dong, one of the densest urban areas in Korea.
Likewise, KT offered a glimpse of 5G at the 2018 Winter Olympics in Pyeongchang, when it provided immersive services and 360-degree video over a pre-commercial 5G network.
The 5G services launched in December 2018 are available only in the form of mobile routers providing connectivity, while operators plan to make nationwide coverage and services available to the consumer market as handsets become available in 2019. For example, auto-parts manufacturer Myunghwa Industry is now able to remotely perform real-time quality control analytics on its production line, by connecting super-high-resolution cameras to cloud-based AI over 5G connectivity.
1.5.2.4 China: will be the largest 5G market
China will play a key role in driving global 5G adoption rates, given the size of its market and the impressive rate at which it adopted 4G. All three Chinese operators have commercial launches planned by the end of 2020.
Initial 5G launch plans will focus on a limited footprint of dense urban centres to test network efficacy and consumer take-up levels before commitments are made to roll out into suburban and rural areas. In aggregate, China’s pre-commercial and commercial launch footprints will be among the largest in the world in terms of coverage and number of base stations.
China will be the largest projected market for 5G by some distance, with 450 million connections by 2025.
This will put it on a par with Europe in terms of 5G penetration at just under 30% of the total connections, and a little lower than the leading markets such as US, Korea and Japan. China sees 5G leadership as a key element in the country’s ‘Made in China 2025’ roadmap, which envisages 5G as helping to play a transformative role in China’s ambition to gain worldwide lead in a range of new technologies such as industrial IoT, cloud computing and AI. Chinese operators already account for two thirds of the overall IoT connections and also lead the adoption of low power wide area NB-IoT technologies that will become the base of Massive IoT. As a result, there is potential upside to existing forecasts if Chinese operators accelerate deployment plans beyond the main urban areas.
Chinese operators look set to adopt the SA deployment route for 5G networks from the beginning. This is in contrast to other regions of the world where most operators have indicated a preference for a NSA deployment. Standalone offers larger-scale economies and high performance as well as less complexity from legacy LTE integration, but it is more expensive in the early commercial stage.
1.5.2.5 Europe: efforts to accelerate 5G
Europe is keen to play a leading role in 5G, having trailed other developed regions in 4G adoption.
Reflecting these ambitions, the European Commission launched the 5G for Europe Action Plan in 2016 and established the 5G Infrastructure Public Private Partnership (5G PPP) in conjunction with the region’s wider ICT industry. National level initiatives are also underway supported by operators and governments.
5G coverage will reach three-quarters of the population in Europe by 2025. By this date there will be 203 million 5G connections, accounting for 29% of total connections. From a regional perspective, Europe will account for the third largest share of 5G connections by 2025, behind Asia Pacific and North America.
Introducing the 5G Era THE 5G GUIDE
49
1.5.2.6 Middle East: host to some of the earliest 5G rollouts
Middle East is a diverse region in terms of mobile market maturity, mobile internet adoption and 5G timelines. The major operators in the oil-exporting Gulf Cooperation Council (GCC) states are looking to be global leaders in 5G deployments and are rapidly moving from trials to early commercialisation.
Launch of 5G mobile services in the GCC region will begin in 2019, when the first 5G smartphones will be commercially available. Further ahead, 15 MENA countries have announced plans to launch 5G mobile services by 2025, which together account for more than half of the markets in the region. For example, UAE successfully trialled FWA in 2018 and is ready for 5G mobile commercial launch as soon as 5G devices are available.
Enhanced mobile broadband will be the key use case in early 5G deployments in the MENA region, while applications and services for enterprises are tested.
The opportunity for MENA operators to enhance the consumer experience through 5G networks, and hence drive incremental revenue, rests on linking 5G commercial propositions to developments in applications and content for immersive reality, eSports and enhanced in-venue digital entertainment (stadia, music venues). Some Middle East operators are already showcasing potential applications of immersive reality.
1.5.2.7 India: getting ready for 5G while deepening 4G
The Indian market is currently seeing a rapid migration to 4G, with over half the connection base set to be running over 4G networks by 2020 and operators investing heavily in LTE networks. Whilst India is unlikely to be a first mover in terms of 5G launches, there is growing discussion amongst operators and other industry stakeholders around the potential benefits of 5G. The government has created a high level forum that has made recommendation around spectrum, as well as other initiatives to support 5G including the development of India-specific 5G applications. Spectrum auctions are currently planned for the second half of 2019 that would potentially cover a number of bands relevant to 5G, including the 700MHz, 3.5GHz, 24GHz and 28GHz.
Initial commercial 5G launches are currently expected by 2020, in line with the government’s own targets.
Bharti Airtel has suggested that initial use cases could include FWA, whilst Reliance Jio has suggested an early launch of 5G with a focus on enhanced mobile broadband. Both operators and regulators are focused on the need to increase fibre deployments across the country to provide backhaul and enhanced backbone connectivity for future 5G deployments.
Introducing the 5G Era
50