Over the last three years, since the time 5G was first launched, the 5G ecosystem has continued to move from strength to strength, helping service providers grow their revenue and market share while providing innovative use uses to their users. It is for this reason that the 5G deployments have accelerated globally in all geographies, particularly in the Middle, Asia Pacific and Europe regions.
As per the latest data released by GSA in January 2023, 243 commercial 5G networks have been launched globally, while 515 service providers are investing in 5G. Further, more than 1700 5G devices have been announced across the globe. 5G users increased from 819 million in June to 924 million in September 2022 and have likely crossed one billion by December 2022, thus covering 36% of the world’s population, according to Strategy Analytics.
All this means that 5G is growing three times faster than 4G. The 5G’s growth globally is impressive, considering it was launched in 2019 and it continued its growth trajectory even during the pandemic.
Revenue Increase of 5G Global Operators Worldwide
A key reason behind the fast growth of the 5G ecosystem globally is that it is helping service providers improve their revenue and increase their users as well. While the previous technologies were about improved speed and coverage, 5G allows operators to increase their subscriber base by enabling them to provide new use cases for different industry verticals.
China and South Korea were the earlier adopters of 5G and mobile service recovery has made a “strong recovery” in both market since the launch of 5G. “From falling 4-5% per annum in mid-2019, they are now growing 3-4% per annum…Higher-value services are the cornerstone of 5G propositions in these markets and the high level of adoption of 5G is helping to amplify this effect,” says
Globally, 5G service providers in all geographies are witnessing a significant increase in their business. All 22 leading 5G operators in China, South Korea, and other countries achieved significant business growth from mobile services. Further, nearly 125 (72%) of the 173 global 5G operators have seen revenue growth from mobile services, and 5G is the crucial reason for this. According to Strategy Analytics, mobile service revenue is growing by 3-4% annually for service providers and 5G is a key factor behind this improved performance.
Similarly, Thailand’s AIS has recorded ARPU growth of 10-15% and had 5.5 million 5G subscribers in September 2022, which is around 12% of its subscribers. On the other hand, Elisa in Finland reported a revenue increase of €3 per month as a result of 5G upgrades in Q3. 5G now accounts for 33% of smartphones on its network, according to Strategy Analytics.
Business success of 5G operators
One can evaluate the success of the major 5G operators to find out how 5G is helping them grow their revenue. Take the case of China Mobile, one of the largest 5G service providers in the world with its network covering more than one billion people in China. At the end of December 2022, China Mobile had more than 1.27 million 5G base stations. Enthused by the positive response to its 5G services, the operator plans to build more than one million 5G base stations by the end of this year.
On the other hand, Telefonica is a perfect example of how 5G is helping service providers in growing revenue opportunities in both consumer and business segments. Telefonica’s focus on using smart bundling (including FMS) and network parity through its 5G services has led to cumulative revenue growth of about 5% between 2020 and 2022.
Another example is that of Zain KSA, which has seen its growth surge by eight times during the last three years after it launched Fixed Wireless Access (FWA). The service provider recorded a 30% increase in ARPU for wireless home customers compared to 4G to 5G. South Africa’s first 5G FWA operator, Rain, reached the ‘break-even’ point in just three years, highlighting the latent demand for high-speed and low-latency services powered by 5G. This helped it to deliver significantly improved benefits, up by 9.7% to touch 3.6 billion South African Rands, to its investors.
The first-mover advantage is crucial in helping service providers gain market share as is evident in the case of Zain Kuwait, which was the first operator to launch 5G services in the Middle East. 5G traffic now accounts for more than 40% of its total wireless traffic, thus helping it emerge as the number one country in GCC countries in terms of 5G offload ratio.
Several other service providers, like Elisa and DNA in Finland, HKT in Hong Kong, True and AIS in Thailand and Vodafone in Germany, among others, are in the process of expanding 5G coverage to provide new and novel use cases to their subscribers.
The business success of the 5G service providers clearly demonstrates that 5G is helping service providers increase market share and gain a crucial first-mover advantage while delivering superior experiences and use cases to their subscribers. This indicates that the service providers must accelerate the deployment of 5G and grow the coverage across all regions in their respective service areas.