Over the last 30 years, the mobile telecommunication industry has demonstrated its capability to connect and transform the society through its network generations – 2G, 3G, and 4G. The next generation of cellular network – 5G has the opportunity to further enhance the existing services and also enable new business models, and innovative consumer as well as enterprise use cases. 5G delivers much higher data throughput, resulting enhanced mobile broadband experience for end users. In addition to high bandwidth, 5G’s ultra-low latency and massive machine type connectivity is also enabling critical IoT use cases, further accelerating digital transformation across industry verticals. 2019 witnessed the launch of commercial 5G networks around the world. South Korea became the first country to launch 5G commercial services in April 2019. Since then, 5G networks have been going live in different countries, with major telecom operators raced to compete and gain a competitive advantage. As of October 2020, around 65 countries have at least one operator with live 5G network.
5G population coverage is the basis for user growth for operators
The introduction of 5G services has created several new opportunities for end users, vendors, operators, and all other stakeholders. For telecom operators, 5G brought with it a mix of optimism and concern. While optimism is related to the plethora of new applications and its commercial impact; concern is about the odds of losing to competitors if they are not fast enough in their network build-outs. The very fast part of the 5G battle is about building the network infrastructure. Expanding 5G population coverage remains the prerequisite and the pivotal requirement for mass uptake of the service. For transitioning to 5G and ramping up its adoption, it is imperative for operators to roll-out the network in largest population centers and also to enhance its reach in semi-urban and rural areas to eventually blanket an entire nation.
Adoption of 4G can be considered as the key reference point for understanding the adoption of 5G services. While 4G took few years to take off; 5G is witnessing a faster adoption rates on the back of steady investments for coverage expansion by operators. In terms of adoption, 5G is already the fastest growing cellular technology generation ever launched by the telecommunications industry. The growth of 5G subscriptions will be sustained by adding more unique users, facilitating unconnected people to adopt cellular connectivity, and off course upgrading legacy networks (2G/3G/4G) users to 5G. With several countries are already shuttering their 2G and 3G networks, 5G network is expected to replace the legacy networks eventually. The higher 5G services coverage levels will enable operators with greater flexibility to turn off their legacy networks at a more accelerated rate.
Along with coverage expansion, availability of spectrum and 5G enabled devices are other critical factors that drive the adoption of 5G services. In the spectrum front, governments and regulators globally are fine-tuning their spectrum allocations as telecom operators get ready with their 5G launches, while also supporting them with their network coverage expansions in countries where 5G has launched already. On the other hand, 5G enabled devices are increasingly getting proliferated due to decline in prices as well as launch of flagship 5G handsets by major handset manufacturers. While vendors like Samsung and Huawei already made available several 5G enabled smartphones, the recent launch of Apple’s first 5G enabled smartphones – iPhone 12 series will further accelerate user shift towards 5G. Moreover, the growing availability of 5G devices will also encourage telecom operators yet to build their 5G infrastructure to begin with the planning of the network.
Consumers demand consistent 5G coverage
5G is set to transform the mobile broadband experience for consumers. There is no doubt in the fact that there is a strong interest among consumers to get a taste of the next generation 5G cellular service. While possibilities are endless, 5G network connectivity is enabling consumers to download a full-length movie in a flash, video streaming and conferencing in high definition, transform living through IoT or smart home technologies, and immersive experience with AR/VR adoption in gaming and education among others. In the 5G era, the significance of mobile platform will become more profound as more and more of services are digitized and accessed via a mobile device. One of the critical factors that impact the 5G user experience is consistent network coverage. Drop in performance when users leave a concentrated 5G coverage zone, and enter into areas where coverage of 5G is not extended can impact the customer experience negatively. A broad 5G footprint is significantly crucial for operators to deliver an enhanced experience to end users and support the rapid migration to 5G.
Case study:
- South Korea: South Korea is one of the most advanced markets in terms of 5G network deployments. South Korean mobile network operators (MNOs) – SK Telecom (SKT), Korea Telecom (KT) and LG Uplus have been successful in achieving the fastest 5G subscription growth rate globally. 5G coverage is reported to have reached around 90% of the South Korean population as of June 2020. To expand 5G coverage to rural areas, South Korea’s Ministry of Science and ICT (MSIT) along with the three MNOs also launched a taskforce in September 2020. By the end of second quarter (June 2020), SKT’s 5G subscriptions reached 3.348 million, adding around 700,000 subscribers from the last quarter. KT’s 5G subscriptions rocketed to 2.237 million, up sharply from 419,000 from June 2019. LG Uplus reported 1.785 million 5G subscriptions, up from 387,000 at mid-2019. The high 5G adoption rate is aided by early launches, continuous coverage expansions, government investments, and the tech-savvy consumers who rapidly adopt new technologies. In August 2020, 5G speed test conducted by MSIT in the capital Seoul and six other major cities recorded average download speed of 656.6 Mbps. Leveraging the high-speed 5G network, MNOs’ focus has been on introducing diverse range of attractive services like cloud gaming, ultra-high definition (UHD) video streaming, augmented reality (AR)/virtual reality (VR) in live concerts among others. One of the trio – SKT reported a 7 times increase in use of VR services, 3.6 times increase in video streaming services usage and 2.7 times increase in use of gaming application by 5G subscribers when compared with LTE subscribers.
Conclusion:
5G network technology will play its part in ensuring that the mobile industry remains a source of value creation and a growth driver for economies globally. A strategic lever for a successful mass adoption of 5G services is the large scale availability of the network. Telecom operators will have to continue rapid deployments of the 5G network to meet the ever-increasing demand for mobile broadband services. In addition, a wider 5G network reach will ensure delivery of consistent performance for all the 5G consumer applications. Moreover, amid rising competition, expanded 5G population coverage is the most pivotal success factor and a major competitive differentiator for 5G operators. Although 5G started as an urban-focused technology, operators will have to expand its footprint nationwide to deliver a consistent experience to end users.
