• The latest Mobility Report from Ericsson suggests 5G will soon account for more than a quarter of all mobile subscriptions worldwide
• That’s fantastic, right?
• From an industry stats perspective, maybe, but that growth isn’t moving the financial needle for the telcos

The latest Mobility Report from giant cellular infrastructure vendor Ericsson might make for frustrating reading if you’re a mobile service provider because, apparently, 5G is a runaway global success: By the end of this year, only several years after the first large-scale launches, the number of 5G subscriptions worldwide is set to reach 2.3 billion, accounting for more than a quarter of all cellular connections worldwide. 

Fantastic, right? Maybe for the network equipment vendors, which already have their 5G kit revenues in the bank, and the smartphone sector, which has something new to pitch, but not so much for the telcos. 

That’s because, despite the amazing uptake for consumer 5G services, the operators that have sunk tens of billions of dollars into their new networks are still wondering when they might get a return on their investments. Telcos around the world may have a lot of 5G customers, but those customers aren’t paying much (if any) more for their 5G packages and telco revenues (once the impact of inflation is accounted for) are stagnating.

Let’s take a quick look at those numbers from Ericsson, one of the companies that banked billions from the sale of its 5G gear.   

According to the vendor’s calculations, 5G subscriptions increased by 163 million during the third quarter of this year to total 2.1 billion and look set to hit 2.3 billion by the end of the year, when North America is expected to have the highest 5G subscription penetration rate, at 71%, followed by North-east Asia, at 51%, the GCC (Gulf Cooperation Council) countries, at 47%, and western Europe with just 41%. 

As the chart above shows, 5G subscription numbers are set to continue to increase throughout the rest of the decade and are forecast (by Ericsson) to reach 6.3 billion by 2030, with 5G set to overtake 4G as the dominant mobile technology in 2027. 

As you’d expect, the world’s most populated countries have been driving this growth – China and the US in particular up to now – and will continue to do so, with India fuelling a sizeable chunk of the 5G uptake in the years ahead: According to the report, the number of 5G subscriptions in India is projected to reach at least 270 million by the end of this year,  accounting for about 23% of all cellular connections in the country. That’s an extraordinary number considering that the two market leaders, Reliance Jio and Bharti Airtel, only launched their 5G services in late 2022, having pumped tens of billions of dollars into their network infrastructure. 

Now the country’s third main privately owned operator, Vodafone Idea (Vi), is ready to join in, with plans to launch its commercial 5G services in early 2025 – see Vi to shake up India’s 5G market with early 2025 launch.

As a result, by 2030, the Ericsson forecasters expect India’s operators to collectively have 970 million 5G connections (around three-quarters of the country’s total).  

So, 5G is gaining traction around the world and, according to a recent report from the GSMA’s Intelligence unit, enterprise users regard 5G as important to their digital transformation efforts. 

Despite these trends and statistics, 5G is regarded as a disappointment (at best), at least in terms of the impact it has had on telco revenues. It’s often hard for the service providers to admit this in public because it looks like they have either failed to capitalise on 5G’s potential or have been hoodwinked by the companies that promised a pot of gold at the end of the 5G rainbow. 

But there are instances where even the most ardent 5G supporters have admitted that 5G has been a damp squib, most notably when South Korea’s SK Telecom, one of the first telcos to launch commercial 5G services, noted in a whitepaper in 2023 that despite a great deal of expectation, there has been “no killer service” for 5G – see 5G reality bites hard in South Korea.

Not everyone agrees, it should be noted: Deutsche Telekom CEO Tim Höttges recently described 5G as a success story, at least for his company – he put that success down to a focused investment strategy that has delivered meaningful returns – see DT CEO – “We are changing the narrative on 5G”.

But Höttges is the outlier – most operators and wondering when, or if, they will ever get a return on their 5G investments. 

The current great hope for 5G is that the deployment of 5G standalone (SA) capabilities will enable telcos to offer up some of those “killer services” that have been MIA so far, with AI featuring heavily: See our report from BT’s recent 5G SA launch for more on this, but note too that it will be years before BT believes it will have updated its entire network to support 5G SA.

In addition, there are also great expectations for the impact of 5G-Advanced capabilities enabled by 3GPP Release 18, the specifications for which were ‘frozen’ (ready to be implemented) in June 2024 and are now starting to appear in the latest releases from vendors (with the term 5.5G sometimes being used to identify 5G-Advanced). 5G-Advanced enables (in theory) greater efficiencies (particularly energy savings) as well as advanced service delivery capabilities, including support for extended reality (XR) and enhanced RedCap – which is regarded as a potential boon for telco internet of things (IoT) services.  

But, as usual, introducing new features and capabilities sucks up resources and costs money. Will 5G SA and the introduction of 5G-Advanced relieve telco frustrations? It’s getting more and more difficult to be a 5G optimist these days, so you just have to hope, for the telco community’s sake, that these advances will provide something beyond fixed wireless access (FWA) broadband (great though that is) and enable the industry to announce, in all honesty, that 5G isn’t the damp squib it currently appears to be. 

Ericsson is one of the companies hoping it will all turn out well. 5G SA and 5G-Advanced “are expected to be key focuses for communications service providers (CSPs) for the remainder of the decade as they deploy new capabilities to create offerings centered on value delivery rather than data volume,” the company noted in its Mobility Report press release, seemingly without a hint of irony. “Of about 320 CSPs currently offering commercial 5G services, less than 20% are 5G SA. The densification of mid-band and 5G SA sites is seen as a key catalyst to capitalise on the full potential of 5G, including programmable and intelligent network capabilities.” 

That full potential needs to be realised sooner rather than later. In the meantime, be careful before you talk to network operators about the massive business potential of 6G…

- Ray Le Maistre, Editorial Director, TelecomTV