• Customer adoption of 5G services is growing quickly around the world
• India and North America are highlighted as noteworthy regions of 5G development
• Telcos are starting to see their 5G monetisation aspirations materialising, according to a new study from Ericsson
• The vendor has reported a positive link between 5G contract uptake and rising mobile service sales

Are 5G investments finally having a positive impact on mobile operator revenue growth? Yes, according to giant mobile network infrastructure vendor Ericsson, which has noted a positive link between 5G subscription penetration and mobile service revenues in the top-20 5G markets, where sales have increased by 7% over the past two years.

That conclusion, and many others, are to be found in the Swedish vendor’s latest Mobility Report, in which Ericsson also noted that investment in 5G rollouts has continued “to hold firm” despite challenges in the economic and geopolitical landscape.

Perhaps the most valuable insight for telcos is the identification of “a strong correlation between increased 5G subscription penetration and service revenue” – at least across the leading 20 markets in terms of 5G adoption. 

As per Ericsson’s categorisation, the following countries have been identified as the top 5G markets: Australia, Bahrain, China, Denmark, Finland, Hong Kong, Ireland, Japan, Kuwait, Monaco, Norway, Qatar, Saudi Arabia, Singapore, South Korea, Switzerland, Taiwan, the UAE, the UK and the US.

According to Ericsson’s report, 5G service launches in these countries have been followed by “a positive revenue development” of 3.5% compound annual growth rate (CAGR) in the past two years (2021 and 2022), or a total increase of 7% (see graph above).

This trend, according to Fredrik Jejdling, EVP and head of networks at Ericsson, “shows the growing value of 5G, benefitting users and service providers alike”.

Despite surging inflation hitting customers’ disposable income levels, Ericsson found that 5G service launches have enabled operators to “proactively drive a shift to higher mobile tariffs, while adding value for consumers.” That value is in “larger data buckets, higher speeds and improved user experiences”, which for telcos has translated into opportunities for upsell and revenue increase.

And it doesn’t stop there – the vendor is bullish that there will be “even more value” unlocked for customers and, one might expect, for telcos as they introduce more services and applications with the ecosystem maturing.

Of course, the conclusion is self-serving – as a vendor of 5G network equipment, Ericsson wants the world to believe there is a positive 5G return on investment story and it has found a set of statistics that provide that exact narrative. 

Rapid 5G subscription growth 

Overall, the mobile 5G subscription count is expected to hit 1.5 billion by the end of 2023, an increase of 500 million, or 50%, in just one year. That number will continue to rise, with the Ericsson team expecting global 5G subscriber numbers to reach 4.6 billion by 2028.

In terms of geographical breakdown, the Ericsson research team highlighted North America and India as key regions of 5G development. 

The North American region has seen stronger 5G service than Ericsson’s research team had expected, compared to the vendor’s previous forecasts: The region boasts the highest 5G subscription penetration in the world, reaching 41% at the end of 2022, ahead of north-east Asia at 30% penetration.

In India, “huge network deployments” have been seen under the government’s Digital India initiative since 5G was launched there in October 2022, and the Ericsson team estimates that India had about 10 million 5G subscriptions at the end of 2022, but with country-wide 5G coverage expected within the next year or so, uptake is expected to be rapid and widespread. Ericsson expects India to boast 700 million 5G connections by the end of 2028, equivalent to a 57% penetration rate and, if Ericsson’s projections are correct, this would make India the fastest-growing 5G region globally.

Echoing concerns recently raised by European Commission industry chief Thierry Breton, the report notes that western Europe is lagging behind other developed regions, with a 5G penetration rate of just 13% at the end of last year. But western Europe’s lot is expected to improve, with Ericsson forecasting the region to rank second in the world by 2028 with a 5G penetration of 88%, behind only North America, which has an expected rate of 91% by that time.

Around 240 commercial 5G networks have been deployed globally so far, while standalone (SA) 5G has been deployed or launched by 35 telcos. The most common 5G services for consumers, as per the report, are enhanced mobile broadband (eMBB), fixed wireless access (FWA), gaming, and services based on augmented reality (AR) or virtual reality (VR).

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV