East Asia continues to dominate the global 5G consumer market. The first market to launch, South Korea, has the highest adoption with nearly 20 per cent of connections in the country now using 5G. China, in turn, leads the way on connections volume with more than 200 million connections and while Japanese operators didn’t launch until March 2020, they have posted impressive growth rates in every quarter.

Overall, these three markets now make up more than 90 per cent of global 5G connections and continue to expand.

Is anywhere else ready to try to catch them up?

Why has the region had such an impressive start?
All of these markets have a sizeable addressable customer base. China in particular with its huge population stands out, but that is nowhere near the full story.

Operators in East Asia have gone all in on the latest mobile technology, decommissioning 2G and 3G networks to ensure resources can be concentrated on 4G and 5G networks. While there has been similar activity in North America, the majority of MNOs in Europe continue to operate with both 2G and 3G networks alongside 4G and 5G.

Another key factor is the amount of these populations which are ready to embrace the latest mobile technology. GSMA Intelligence research shows more than half of consumers in both China and South Korea said they planned to upgrade to 5G even in the very early days of 5G in 2019. By 2020, the figure had grown in both markets, with two-thirds of consumers in China planning to upgrade to 5G if they haven’t already.

By contrast, only 38 per cent of US consumers intended to upgrade, while interest in Europe was even lower. To be fair, each of the surveyed European markets did show an increase in upgrading to 5G between 2019 and 2020. Yet, the most recent results suggest that around three-quarters of consumers in markets, including France and Germany, have no interest in upgrading their services.

Are the next major players in the US?
The US is the biggest 5G market outside of East Asia. The major operators in the country were quick to launch 5G, but started out at a small scale covering dense urban areas in a few carefully selected cities. Now, US MNOs are taking the next step.

Verizon’s Premium Unlimited plans are attracting new customers to its 5G network with features including Disney Plus, Apple Music and cloud storage alongside unlimited connectivity. At the same time, the operator is planning to double the number of mmWave 5G sites expanding its coverage and densifying existing coverage areas.

AT&T is also optimistic about the future of 5G, and while it is yet to announce any user numbers, the operator is expecting growth comparable to 4G at a similar stage of maturity.

The T-Mobile US and Sprint merger gave the operator the widest coverage in the country along with the second-largest customer base, so the MNO has some serious potential to grow its 5G connections.

Network enhancements including improvements to 4G and upgrades to 5G are already making a big difference. Based on data from Ookla, average speeds increased by around 50 per cent across the three major operators between July 2020 and January 2021. With a record-breaking spectrum auction now complete, bringing much needed mid-band spectrum to the market, 5G is set to be a major technology in the US in 2021.

Are European MNOs ready for the challenge?
While European MNOs launched later than the early adopters in South Korea and the US, 5G has been available in markets including Italy, Spain, Switzerland and the UK since the first half of 2019. For the most part, however, these launches were not followed up with significant expansion, and major markets including France did not launch 5G at all until the latter part of 2020.

The Covid-19 (coronavirus) pandemic clearly had an impact. After being hit heavily by the virus, lockdowns were put in place across the continent, decreasing customer propensity to spend. With ARPUs already significantly lower than those seen in markets like the US and Japan, and without the economies of scale available in China, expensive network rollouts were always going to be affected.

This could be about to change, however.

Following a flurry of 5G launches in 2020, nearly half of the 5G networks in the world are based in Europe. In addition, Q4 2020 saw four European markets awarding dedicated spectrum, including three assignments in the low-band range where Europe had been lagging. And while 2020 was certainly a year to forget, there are signs that the second half of this year will see a return to some sort of normality.

Since the launch of 5G, we have been waiting for a definitive use case that would drive up adoption. While we haven’t seen that yet, we are reaching the stage in which a new phone from Apple, Samsung, Huawei or even a smaller vendor, will most likely come with 5G as a standard feature. And so, with coverage now increasing out from the city centres and ordinary tariffs allowing 5G, next-generation connectivity will become the norm rather than the exception.

East Asia clearly has a head start in this, and even by 2025 connections from China, Japan and South Korea will make up more than half of global 5G connections.

By the end of this year, however, we will see the other major markets move a long way towards catching them up.

– Matthew Iji – director, Mobile Networks & Services, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.