There will be around 200 million 5G mobile connections in the U.S. and Canada by 2025, according to a new report, The Mobile Economy North America 2018, from GSMA Intelligence. These 5G connections will account for 49 percent of the projected total market by 2025, pushing the 5G adoption rate in North America ahead of Europe, China, Japan, and South Korea.
The report forecasts that almost half of all North American mobile connections by 2025 will be running on 5G networks. Because of this, GSMA predicts that this region will migrate to 5G at a much faster rate than markets in Europe and Asia. By 2025, connections are expected to be around 30 percent in Europe and the key Asian markets.
GSMA Intelligence compiled data from previous generations (primarily 4G Advanced), country census data, NASA data to predict changes in census, economic indicators, analysts, and information from the operators to make the report.
Pablo Iacopino, director of ecosystem at GSMA Intelligence, said that a few factors distinguish the North American mobile operators. Primarily speaking about the U.S. market, he said that the support from government institutions (particularly with 5G spectrum allocations and infrastructure deployment), the convergence of telecoms and media in the U.S., past consumer adoption of new technologies including smartphones and 4G, and operator investment in fiber and the 4G network created a “solid foundation for the upcoming 5G network deployment.
The race to 5G is on — a number of mobile operators have announced their mobile 5G commercial launches in the next three years. According to the GSMA report of the global mobile economy, China, the U.S., and Japan will lead in 5G connections by 2025 with Europe continuing to make progress on its 5G deployments.
Verizon said this week it will launch its pre-standard 5G service in four markets on October 1. AT&T plans to launch its mobile 5G service in a dozen markets this year, though it has yet to announce an exact launch date. And T-Mobile and Sprint are targeting their 5G launches for 2019. Canadian operators Bell, Rogers, and Telus have been more coy about their 5G plans, but GSMA predicts their 5G launches for 2020. NTT DoCoMo plans to fully launch its commercial 5G by 2020, and SK Telecom plans to launch its commercial 5G in the second half of 2019 — these two operators were recently ranked by Juniper Research as the ‘most promising’ 5G operators.
According to GSMA, after these launches, 5G adoption will grow as fast as 4G adoption did in North America, faster than any other region in the world. The U.S. and Canada were among the first countries to reach 50 percent adoption of 4G — doing so in 2015. GSMA notes that this fast adoption is driven by supply and demand factors, including rapid tech rollouts and an engaged customer base.
Iacopino said that “The US will be one of the leading markets for all the new technologies that are expected to benefit from 5G superior network capabilities such as faster speeds, lower latency and greater capacity.” He based this assumption primarily on the high consumer spend on mobile services in the U.S. — which accounts for 25 percent of global mobile revenue.
Economic Impact of 5G
As operators continue to roll-out next generation mobile technologies and services, including 5G and IoT, the economic impact of this industry continues to grow. GSMA says the North American mobile industry’s contribution to the economy is expected to increase by 32 percent to reach $1.1 trillion by 2022, comprising 4.9 percent of total GDP. This is up from $83 billion in 2017.
GSMA notes that North American operators are offsetting industry pressure — including increasing regulatory pressure, large mergers and acquisitions involving media and telecoms, competition from internet players — with revenue opportunities from IoT and 5G. Indeed, GSMA says that capex spiked and peaked in 2017 as mobile operators spent to prepare for 5G.
“Between 2018 and 2020 a further $122 billion will be invested, mostly driven by network maintenance and early 5G rollouts,” according to the report. These 5G rollouts will require small cell deployments, new antennas, and transmission upgrades.