- As of mid-July 2020, 93 commercial 5G networks went live across the world.
- Global mobile 5G connections will dramatically increase to over 1.7 billion within five years since the initial roll-out in early 2019, and China alone is projected to make up roughly 47% of the total connections by the end of 2023.
- In 2023, 5G penetration (the percentage share of total mobile connections) in US & Canada will reach over 50%, and Europe will see its 5G proportion at the average of 26%.
Since the early commercial launch of 5G mobile services in April 2019, the pioneer operators in developed telecom markets have been progressively promoting the wide-scale deployment and adoption of 5G networks. As of mid-July 2020, 93 commercial 5G networks are live across the world, mainly distributed in Europe, East Asia and Oceania, Middle East, and North America regions.
Exhibit 1: Europe, Asia & Pacific Have the Most 5G Live Networks
Under the guidance of the “5G Action Plan”, European states showed clear ambition of getting ahead in the global race to 5G commercialization, with Elisa, Telia, Swisscom, Sunrise, Vodafone, TIM, and EE being in the first batch of operators rolling out 5G mobile services worldwide. By the end of 2020, all member states of the European Union are expected to have commercial 5G services, making Europe the home nearly half the live 5G live.
The East Asia and Oceania region is leading the growth of 5G mobile connections; in May 2020, the accumulated 5G connections in China and Korea surpassed 30 million and 6.8 million, respectively. According to Counterpoint’s Market Outlook service, global 5G connections will dramatically increase to over 1.7 billion within five years since the initial roll-out, and China alone is projected to make up roughly 47% of the total connections by the end of 2023.
Exhibit 2: China, North America, Western Europe will Experience Higher 5G Penetration
Until then, 5G penetration (the percentage share of total mobile connections) in US & Canada and China will reach over 50%. Europe will take on unbalanced development in each sub-market with 5G penetration reaching an average of 26%. India, as the second-largest smartphone market, is still transitioning to LTE, although Reliance Jio, with nearly 400 million subscribers, is expected to lead the 5G adventure in the nation and launch commercial services in 2021. 5G adoption, though, is likely to be limited to higher income groups, leading to a relatively low proportion of 5G connections by 2023.
So, 5G will outpace 4G LTE in terms of network deployment and connection growth during each initial roll-out period. 5G is also benefiting from a stronger ecosystem. Telecom equipment vendors had been playing a critical role in accelerating 5G progress. Huawei and Ericsson were awarded the most commercial 5G contracts, Nokia was a bit behind. But by adding open interfaces to its telecom equipment, Nokia is seeking leadership in the open RAN ecosystem. ZTE is still in fourth place, with contracts mainly from Asia Pacific, Europe, and the Middle East, while Samsung already became a key 5G equipment partner for operators in South Korea, and America.
Exhibit 3: Huawei, Ericsson Lead in Commercial 5G Contracts
Despite the slow-down of 5G network construction in markets hit severely by the COVID-19 pandemic, primarily due to the constraints on construction activity, equipment and material supply, as well as the postponing of 5G spectrum auctions and standardization efforts, the development momentum of 5G is unlikely to be interrupted.
The pandemic has introduced significant impact to people’s lives. As people now spend more time at home, data traffic on operators’ networks increased significantly during the lockdown. Besides, the recent move towards physical distancing encourages industry players to exploit new opportunities like virtual meetings. At this point, the pandemic is likely to accelerate the 5G growth through the forecast period.