Outlook for 5G takeup ‘positive’, report finds

Outlook for 5G takeup 'positive', report finds
Despite some initial slowness this year, the 5G market is set for rapid expansion from 2020 onwards, reaching a billion connections one year quicker than 4G.

The prospects for the rollout of 5G services and devices are strong for the medium- and long-term, although the technology will first have to weather some initial uncertainties, a new report has forecast.

Research by CCS Insight found adoption of 5G will occur faster than for 4G, with one billion 5G connections set to be in use around the world by 2022. This will be around a year faster than it took 4G to reach this milestone, while it will reach 2.8 billion connections by 2025.

However, while the pace of growth will increase substantially from 2020 onwards, the industry should not expect too much excitement this year. CCS noted that although networks around the world are scheduled to go live later in 2019 – with early adopters including AT&T and Verizon in the US, KT Telecom in South Korea and O2 and Vodafone in the UK – there are several factors that will contribute to initial slowness in the rollout to consumers.

One of these is uncertainty over what impact any restrictions on the use of Huawei equipment will have on the rollout of services. It was recently reported that the Chinese manufacturer would only be permitted to access 'non-core' parts of the UK's 5G network, and the likes of BT and Vodafone have warned that if they are forced to look elsewhere for vital equipment, deployments of 5G could be delayed by up to a year.

Another issue is the limited availability of 5G-enabled devices. Although several manufacturers have confirmed plans to launch 5G smartphones this year, the first wave will be characterised by high prices and limited support for frequency bands. 

As a result, CCS Insight expects fewer than ten million 5G smartphones will be sold worldwide in 2019. However, the situation is likely to change rapidly as more manufacturers adopt the technology, leading to greater competition and a wider range of devices to choose from.

Marina Koytcheva, CCS Insight’s vice president of forecasting, said: "Fierce competition coupled with subsidies and incentives in certain markets will ensure rapid price erosion of 5G devices in 2020. This will facilitate fast adoption of 5G by smartphone users."

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