By Nermin Mohamed, Head of Telecommunications Solutions at Wind River
In Part 1 of our blog series, we looked at the fast 5G adoption, despite the challenges of a global pandemic. In the space of a few months, it seemed the entire world went remote, depending on wireless technology in almost every facet of daily life. From remote work and schooling to online shopping, gaming, and telemedicine, everyone needed fast, secure connectivity. 5G was ready for the challenge.
The explosive growth of 5G
The pandemic that emerged in 2020 clearly showed that wireless technology plays a crucial role in keeping people and societies connected, as well as supporting economic growth and productivity. Companies and individuals alike have increased their online activities as the world has been learning how to deal with the current situation. As a result, the demand for fast, secure, and powerful networks has greatly accelerated, opening the door for 5G adoption.
Worldwide, 5G has powered its way into workplaces and homes faster than any previous technology. 5G added more than 225 million subscribers in one year, a number that took 4G LTE four years to hit.[i] 5G is indeed the fastest growing mobile technology in history. More than 40 countries have stood up 5G networks and many others have deployed at least partial 5G mobile technology. The world is on track to reach the milestone of one billion 5G-connected users by 2025.
A closer, regional look at 5G adoption
5G is truly a global success story, with each country contributing part of the picture. From South Korea to South America, the adoption rates show nothing but growth ahead.
South Korea, the first country to deploy a large-scale 5G network, continues to lead in the 5G adoption sweepstakes, with plans to have two-thirds of mobile subscriptions running on 5G networks by 2025. By comparison, the US is aiming for 55% adoption and China and Japan are both targeting 47% in the same time period, while Europe has sights on a projected adoption rate of 29%.[ii]
China has become a leader of 5G rollouts since launching their first commercial 5G networks in 2020. Mobile operators in the country have already built more than 160,000 5G base stations that cover more than 50 cities, aiming to expand coverage and capacity while expanding offerings to cover both consumer and enterprise customers.
The US and Canada (North American region) experienced 47% quarterly growth in Q3 2020, as 5G networks and 5G devices became readily available to more consumers. By the end of the same quarter, the region saw 3.4 million subscribers, which was a gain of more than one million connections.
Europe has rolled out 5G networks at a slower pace than other regions, but by end of 2020, more than 18 countries now offer 5G commercial services, including Austria, Germany, Poland, Spain, the UK, Ireland, Italy, Finland, and Hungary. In the Gulf region, most countries are expecting to have more than 20% of their subscribers running on 5G by 2025. Not to be left behind, almost every country in South America and Southeast Asia is investing in 5G, although adoption currently lags behind other regions.
Emerging 5G use cases and markets
The world is definitely getting onboard with 5G, hungry for the power, speed, and coverage the new networks bring to business and to individuals. While existing uses, such as remote work and telemedicine are moving to 5G, there are also new use cases fueling the growth of 5G.
These new or changing market segments require the massive data throughput and lower latency of 5G, along with its ability to manage a massive number of connected devices. For example, manufacturing is slated to be the fastest growing 5G market for the next several years, while the global smart grid sector will more than double its multi-billion dollar growth in the same period. Meanwhile the emerging 5G-based cellular vehicle-to-everything (C-V2X) is poised to reshape the entire transportation industry.
These and other emerging markets are challenging Telcos to turn to new models for design and support. To ensure 5G success over the next five years, operators globally are planning to about $1.1 trillion capex, with roughly 80% of that devoted to 5G networks.
With this adoption growth, where is 5G headed in 2021?
With the 3GPP specifications now complete for 5G Releases 15 and 16 and with Release 17 specifications fully underway, operators are transitioning to standalone architecture and deploying the intelligent edge. Both edge computing and artificial intelligence are now considered critical elements to the delivery of ultra-low latency and the support of new applications while reducing the cost of network operations.
2020 was an unexpected year for everyone, in so many ways. In the midst of all the uncertainty, one thing was clear: a strong telecommunications structure is critical for individuals and for businesses.
In the third and final part of our series, we will look at trending changes that impact Telcos and the path ahead to make 2021 a better year for all of us.
[i] 5gamericas. 5G is the Fastest Growing Mobile Technology in History. December 2020.
[ii] Statistica. 5G: South Korea Stays in the Lead. December 2020.