This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Read our privacy policy

Shaping the future with 5G rollout

5G rollout is driving a massive digital revolution and boosting the global economy. For telcos, gearing up with 5G is the key to succeeding in the future digital society.Here's how they can do that.

By Zhu Bing
Jan 2020

5G rollout is driving a massive digital revolution and boosting the global economy. For telcos, gearing up with 5G is the key to succeeding in the future digital society. 

The world is preparing for the mass rollout of 5G networks. Together with artificial intelligence (AI), the Internet of Things, cloud, and immersive realities, 5G is driving digital transformation. 5G is set to change societies, economies, and industries by disrupting how we connect in the future. It has the potential to connect people to things, as well as connect individuals to families, businesses, and the public sector. To maintain their market position and economic performance, telcos must start preparing for a 5G future. 

The 5G roadmap

Building on the legacy of its predecessors, 5G is transforming the world digitally. While 4G transformed the “connected consumer” into a “digital consumer”, says Pablo Iacopino, Director of Ecosystem Research at data research firm GSMA Intelligence, 5G is now transforming the “digital consumer” into a “digital society.”

The transition to this digital society will be made possible because of the large base of existing digital and mobile users. One of the benefits these users will gain from 5G is enhanced mobile broadband (eMBB), as 5G provides faster download speeds and expanded coverage. As well as offering users an enhanced mobile experience, eMBB also boosts the average revenue per user (ARPU) of telcos, as it enables them to offer diverse services such as real-time augmented and virtual reality, enhanced digital signage, and fixed wireless access (FWA). By providing access to the Internet using FWA, rather than fixed lines, 5G can connect the estimated 1 billion homes worldwide that lack a regular broadband connection. 

One country already enjoying the benefits of 5G is South Korea. As the first country in the world to deploy a 5G commercial network, it has seen astonishing 5G growth rates. In 2019, the number of 5G users grew to 3 million in under a year, and it is estimated that by early 2020, there will be over 5 million users. South Korea holds the world’s highest penetration rate of 5G. By 2020, it is estimated that 10 percent of Koreans will be 5G users.  

This widespread adoption has been extremely beneficial for Korean telecom operators. Thanks to new, 5G-supported AI and virtual reality services, Korean carriers saw their average handset data traffic per user increase by 65 percent and their ARPU increase by 75 percent. One Korean telco that adopted 5G, LG Uplus, is expected to increase its revenue by 7 percent by the end of 2019. 

In the Philippines also, the rollout of 5G is bringing with it multiple advantages. FWA helps Philippine telco Globe Telecom provide over 1 million home broadband connections. This accounts for 26 percent of the Philippines’ total home broadband connections and has increased Globe Telecom’s penetration rate from 12 percent to 17 percent. Globe Telecom has also introduced new features like immersive gaming or live sports events. Innovative prepaid broadband plans have also made broadband services more affordable and accessible. After FWA was introduced in 2017, Globe Telecom’s broadband revenue increased from 13 percent to 15 percent and ARPU increased by 41 percent in 2018. 

Digital revolution, economic prosperity

Beyond telcos, 5G will drive a massive digital revolution and boost the global economy. 5G is a cross-sector innovation, whose projects encompass 19 sectors, notably automobile, energy, health, media and many others. The deployment of 5G will also fuel sustainable long-term returns on the global economy. Stakeholders such as telecom operators are financially supporting 5G’s global implementation. More than US$83 billion will be invested in radio access networks (RAN) over the next 5 years. Investments are also directed towards transport networks and IT spaces.

While the deployment of 5G requires financial investment, gearing up with this technological innovation will bring profitable long-term returns. Ultimately, 5G makes business faster and cheaper. A 2019 IHS Markit research forecast that 5G will have enabled a US$13.2 trillion output in the global economy by 2035. That is nearly equivalent to the combined spending of consumers in China, Japan, Germany, the UK, and France in 2018. The economic returns of 5G are also expected to be sustainable. For instance, a study of the 2020-2035 period estimated that 5G’s stream of annual contributions to real global GDP should yield a net value of US$2.1 trillion. 

Gear up for a brighter future

5G is an ecosystem of various products and apps, which involves multiple stakeholders. To lower operating costs and ensure the faster and more efficient rollout of 5G, collaboration is key. For example, two telecom operators in the UK, Vodafone and O2, are network sharing to optimize investment and network efficiency. “In many parts of the world, we’re already seeing operators collaborating and rolling their networks out,” says Shaun Collins, CEO of research and advisory firm CCS Insight. 

Indeed, besides benefiting technologically, telecoms operators will benefit economically from the successful global launch of 5G. The first-wave 5G markets have resulted in revenue growth and this is forecast to continue growing over the next 15 years. Gearing up with 5G is likely to be the factor that determines success in the future digital society.