15 December 2020, London: GSMA Intelligence has published its annual “Global Mobile Trends” research report, sharing insights for the global mobile industry following the Covid-19 pandemic. The report forms part of an annual report series where we take an end-of-year view of the most important trends shaping the telco and wider TMT sectors.
Beyond Covid-19, our report analyses the telecom industry’s underlying trends, such as 5G adoption, which are building momentum and shaping the telecom sector outlook. Other trends include network transformation and the shift to open RAN; enterprise digitization; changes to consumer entertainment consumption from streaming and immersive reality; and the 4G smartphone wave in emerging markets. Provided there is a gradual economic recovery in 2021, we expect activity in each of these areas to gather pace,” said the GSMA Intelligence’s Head of Research, Tim Hatt.
Navigating the Covid-19 pandemic
In higher income countries, there was a negative impact of 4-8% in telecom revenues. In the same countries, this decrease is around half the comparable drop in GDP (Gross Domestic Product) since the start of 2020.
The Covid-19 impact on telecom revenue is primarily concentrated in four areas: roaming, due to a lack of international travel; lower handset upgrades due to retail store closures; challenges in corporate and small- medium-sized enterprise (SME) markets, and general consumer spend pressures, particularly in the prepaid mobile segments.
However, operators’ resilient mobile and fibre networks have met the demands of increased data traffic, spiking to 50-100%. The increases were driven by home entertainment and work from home communications, such as video and voice calls.
5G rollouts continue apace
While 2020 saw some early slowdown in new 5G launches due to the pandemic, activity has recovered; 113 mobile operators have launched a 5G network in 48 countries. We forecast operators will spend 80% of sector CAPEX ($890 billion) on 5G networks over the next five years
Consumer adoption of 5G will reach 20% of global mobile connections by 2025. That said, adoption rates will be higher among countries at the forefront of 5G: the U.S., China, South Korea, Japan, the Gulf states, Australia and parts of Europe
The near-term outlook in 2021 depends, to a large extent, on the timing of an economic recovery from the pandemic given pressures on consumer incomes. However, a continued fall in 5G smartphone prices will help; in the GSMA Intelligence’s global consumer trends survey for 2020, 37% of consumers said they intended to upgrade to 5G, compared to 30% in 2019. While the increase is welcome, it also highlights the challenge for the mobile industry to convince the mass market of 5G’s value compared to 4G.
On the enterprise front, 56% of operators see manufacturing as the highest potential for 5G, serviced with a mix of Internet of Things, cloud and private networks.
The Open RAN wave
As a new technology generation, 5G provides mobile operators with an opportunity to evolve or transform the way they build digital mobile networks. The timing of 5G also aligns with the availability and commercialization of open networking technologies, such as Open RAN (Radio Access Network). Open RAN is a paradigm shift in the way networks are made and operated. It helps the industry reduce costs and increase agility to unbundle network assets to monetize use cases such as edge compute. It also helps increase competition among network equipment vendors; 57% of operators intend to introduce new vendors into their network supplier roster.
4G is powering the mobile internet in emerging markets
By 2025, 4G will account for 57% of the global mobile customer base, by the far the largest share. Smartphone and 4G adoption are rising in many high growth emerging markets. For example, in India, the world’s second most populous country, smartphone penetration is now approximately 70%, with 85% of these smartphones running on 4G networks. We anticipate the trend will continue over the next five years as smartphone prices fall and there is an increase in availability of local content to make the internet more relevant to users.
Global regions and markets
The report provides analysis on the responses of the following markets and regions to the pandemic: North America, Latin America, Europe and CIS (Commonwealth of Independent States), the Middle East and North Africa, Sub-Sahara Africa, India and Greater China.