This article originally appeared on Reuters by Douglas Busvine.
BERLIN (Reuters) – China, the United States, Japan and Korea will account for more than half of the world’s subscribers to super-fast 5G mobile networks by 2025, leaving Europe lagging, a study showed on Thursday.
Europe, moving more slowly to build 5G networks, will lag in terms of consumer take-up. Yet the picture looks different in business, where 5G will be able to run ‘smart’ factories using connected robots, devices and sensors.
“It’s going to be a small cluster of countries that leads adoption in 5G, with the rest of the world following,” Tim Hatt, head of research at GSMA Intelligence, told Reuters.
“China, Japan, Korea and the U.S. – between those, you’re looking at well over half of worldwide 5G subscribers by 2025.”
The rapid rollout of 5G networks, with speeds fast enough to download a movie to a smartphone in seconds, has surprised many. Nokia, the world’s No.2 network vendor behind Huawei [HWT.UL], recently suspended its dividend to invest in upgrading the 5G gear it sells to carriers.
In Korea, 66% of mobile connections will be 5G by mid-decade, GSMA Intelligence forecast in a 100-page study, followed by the United States on 50% and Japan on 49%.
In terms of sheer numbers, China will predominate with 600 million 5G connections. Worldwide, 1.57 billion people are expected to adopt 5G by 2025 – or 18% of total mobile users.
Early experience shows that carriers can hike 5G prices by 15%-20%, offering ‘more for more’ unlimited data plans. But, if the past is anything to go by, those gains will eventually be competed away.
EUROPE LAGS – OR DOES IT?
With standards to enter force in a couple of years that will support the development of the industrial ‘Internet of Things’ (IoT), such usage is seen by European industry as a more promising way to recoup the vast outlays needed for 5G.
Rather than sell to enterprise clients, Hatt said carriers would be better off teaming up with them on projects in the IoT – a market that GSMA Intelligence forecasts will be worth $1 trillion in 2025, roughly equal to total mobile industry revenue last year.
Yet of that, only 5% will come from connectivity, forcing carriers to compete with global consulting firms and Silicon Valley tech giants like Amazon or Microsoft for the rest of the pie, said Hatt.
4G ROLLS ON
For developing nations, it’s the spread of affordable connectivity through older 4G technology – and not 5G – that will affect the lives of billions of people for years to come, the research arm of telecoms industry group GSMA found.
Looking to emerging markets like Nigeria, Mexico, India or Indonesia, a combination of cheap Android smartphones and affordable data still offers growth potential.
GSMA Intelligence forecasts that 59% of total worldwide mobile connections will be 4G in 2025.
“For a lot of these countries 5G is just not on the horizon right now,” said Hatt.
“That 4G generation (is) for the most part mobile only. They don’t have computers… This is a whole new ball game and the operators are pretty well positioned to take advantage of that.”