5G – Where Are We and Where are We Going?
5G gets a lot of press. If we are not hearing about new 5G smartphones, we are certainly bombarded with maps and statistics about how this carrier or that carrier has the best 5G network, but the question remains, where are we with 5G on a global basis, and where will we be in 5 years? While the average guy/gal in the street probably still does not care about 5G, as they probably have a Samsung (005930.KS) Galaxy S8 (released 4/21/2017) or an Apple (AAPL) iPhone 7 (released 9/12/16 here in the US, or a Huawei (pvt) Mate 20 Pro (released 10/16/2017) in China, but they will over the next few years when they finally get frustrated with apps that run slow, dropped connections, battery deterioration, or they are just embarrassed to be using a phone that is almost 5 years old. So the question remains, where are we now and where will we be with 5G in five years?
Ericsson (ERIC) puts out a summary of facts and figures concerning 5G and broadband generally each year and while it certainly has an optimistic point of view, not surprisingly so give Ericsson is among the top five 5G equipment vendors, but it does have extensive 5G data and some forecasts as to where the company expects 5G to be in a number of years, some of which we summarize here:
5G subscriptions have been growing at a very high rate, although we note that prior to 2019 there was no real 5G service available so 2020 growth is going to reflect the first and second real year for 5G subscriptions, and for most areas, just the beginning of real deployment. On a global basis, worldwide mobile subscriptions in 2019 were 7.93b, increasing by only 0.25% in 2020 to 7.95b, but are expected to grow by 10.4% during the period between 2020 and 2026 to 8.778b at a 2% CAGR. Here’s how it breaks down by region, including China and the Gulf Cooperative Council, which consists of Bahrain, Kuwait, Oman, Qatar. Saudi Arabia, and the United Arab Emirates. China and the GCC are also broken out separately:
Ericsson (ERIC) puts out a summary of facts and figures concerning 5G and broadband generally each year and while it certainly has an optimistic point of view, not surprisingly so give Ericsson is among the top five 5G equipment vendors, but it does have extensive 5G data and some forecasts as to where the company expects 5G to be in a number of years, some of which we summarize here:
5G subscriptions have been growing at a very high rate, although we note that prior to 2019 there was no real 5G service available so 2020 growth is going to reflect the first and second real year for 5G subscriptions, and for most areas, just the beginning of real deployment. On a global basis, worldwide mobile subscriptions in 2019 were 7.93b, increasing by only 0.25% in 2020 to 7.95b, but are expected to grow by 10.4% during the period between 2020 and 2026 to 8.778b at a 2% CAGR. Here’s how it breaks down by region, including China and the Gulf Cooperative Council, which consists of Bahrain, Kuwait, Oman, Qatar. Saudi Arabia, and the United Arab Emirates. China and the GCC are also broken out separately:
Looking at subscription data by technology shows how each technology fares in terms of subscription growth over the same 2020 – 2026 time period. As we are using rounded figures for calculating absolute growth and CAGR, our numbers differ slightly from those in the report, however the only significant difference of note is with 5G, where we calculate a 72.9% CAGR on rounded numbers and Ericsson calculates a 59% CAGR on rounded numbers. We note that while 2G and more recently 3G networks are being eliminated in the US, together they still represented 38.4% of subscriptions globally last year, and even in 2026 are still expected to represent 15% of global subscriptions, so while the technology might not be visible here in 2026, it will still be part of the global network.
5G itself is expected to grow faster than 4G, reaching 1b subscriptions roughly two years earlier than 4G, which began its rollout in 2009, although it will not see a greater share of global subscriptions than 4G (LTE) until 2027 or 2028. That said, even using Ericsson’s 59% CAGR through 2026, 5G will see very substantial growth in subscriptions. Breaking down the 5G subscription growth by region, while Latin America will see the most rapid subscription growth during the period, North East Asia, primarily China will see it share decline from 88.0% in 2020 to 40.6% by 2026. The 5G subscription share in 2020 and 2026 are depicted in Fig.1 and Fig. 2 below.
5G itself is expected to grow faster than 4G, reaching 1b subscriptions roughly two years earlier than 4G, which began its rollout in 2009, although it will not see a greater share of global subscriptions than 4G (LTE) until 2027 or 2028. That said, even using Ericsson’s 59% CAGR through 2026, 5G will see very substantial growth in subscriptions. Breaking down the 5G subscription growth by region, while Latin America will see the most rapid subscription growth during the period, North East Asia, primarily China will see it share decline from 88.0% in 2020 to 40.6% by 2026. The 5G subscription share in 2020 and 2026 are depicted in Fig.1 and Fig. 2 below.
Global 5G Subscription Share - 2020 - Source: SCMR LLC, Ericsson Mobility 2021
Global 5G Subscription Share - 2026 - Source: SCMR LLC, Ericsson Mobility 2021
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