How are mobile operators around the world benefiting from 5G business?

5G mobile communication services enable the creation of a complete mobile and connected environment by providing a variety of application scenarios and business models for enterprises and consumers. Furthermore, the faster data speeds and ultra-low latency provided by 5G technology will enhance the user experience when using 5G services such as cloud-based gaming; VR: Virtual Reality based gaming; ultra-high-definition video streaming and many other high-end applications.

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According to a report by the Ministry of Science, ICT and Technology of South Korea (MSIT), statistics in June 2022 showed that the average data usage per 5G customer reached 26.8 Gigabytes, which is 3 times higher than the average data usage per 4G customer (8.2 Gigabytes).

In China, statistics also show that the average data usage per 5G customer is more than twice as high as the average data usage per 4G customer.

Meanwhile, in Finland, 5G smartphone users from mobile operator DNA consumed 33 gigabytes of data per month in 2021, 15% higher than 4G smartphone users and almost 7 times higher than 3G smartphone users, while 5G modem users consumed 231 gigabytes per month, 115% higher than 4G modem usage.

5G mobile operators in some markets are already using content-based service plans to encourage higher monthly spending and give users access to enhanced 5G content services such as cloud gaming, ultra-high-definition video streaming, and augmented/virtual reality (AR/VR). These pricing and user experience incentives are contributing to average revenue per user (ARPU) increases of 10% to 20% as users upgrade from 4G to 5G.

Survey data shows that the average revenue per customer using 5G networks is 1.3 times higher than that of customers using 4G networks in the US and 1.6 times higher in Korea and China.

In addition, the 5G fixed wireless access market has also created a new revenue stream as the number of mobile operators investing in this market is increasing globally.

5G Fixed Wireless Access is a wireless broadband access solution based on broadband market demand, which maximizes the characteristics of wireless coverage, rapid deployment, and fiber-optic network performance. It will help mobile operators shorten their network construction cycle and save network construction costs.

5G fixed wireless access applications have brought good revenue streams to mobile operators in Gulf countries, the United States and some European markets such as Finland, Austria, Germany and Switzerland.

For example, Austria’s Magenta and Switzerland’s Sunrise have created new revenue streams by rolling out 5G fixed wireless access in areas without fiber connectivity. In Gulf markets, 5G fixed wireless access has increased mobile operator Zain’s revenue in Saudi Arabia and Kuwait by more than 30% compared to 4G, while US mobile operator T-Mobile has more than 1.5 million 5G fixed wireless access customers, contributing about 1.5% of the operator’s postpaid revenue.

In addition to generating new revenue streams from 5G enhanced content and deploying 5G fixed wireless access applications, mobile operators globally are also targeting private 5G networks as a new business area.

A private 5G network is a 5G mobile network dedicated to organizations and businesses to connect machines, vehicles, and people within a campus, in a factory, or within a certain range and separate from the public mobile information network.

Private 5G networks can provide low latency, high bandwidth and secure, reliable connectivity across a wide range of industries and sectors such as manufacturing, logistics, energy, mining and education.

The global private 5G network market size reached US$1.38 billion in 2021 and is expected to reach US$41.02 billion by 2030, growing at a compound annual growth rate (CAGR) of 49.0% during 2022-2030, according to a report by Grand View Research.

Assessing the coverage of 5G mobile networks, Strategy Analytics, a global analysis company, said that 5G networks covered 27% of the world's population in 2021 and continued to increase rapidly in the coming years as mobile operators globally accelerate the deployment of 5G networks.

According to the Global Mobile Suppliers Association (GSA), as of the end of June 2022, globally, 496 mobile operators in 150 countries/territories had invested in 5G, through trials or planned or actual deployments, of which 215 mobile operators had provided commercial 5G services.

The expansion of 5G coverage globally has also driven the increase in 5G smartphone consumption. As of the end of March 2022, mobile phone manufacturers had sold more than 500 million 5G smartphones. In the first quarter of 2022 alone, 5G smartphones accounted for 42% of global mobile phone sales. Smartphone experts at Strategy Analytics predict that 5G smartphones will account for 60% of global smartphone sales by the fourth quarter of 2022.

Global mobile services revenue is now growing at more than 4% per year, an unprecedented growth rate since 2012, with 5G services revenue making a significant contribution to this growth.

In Vietnam, as of June 2022, the Ministry of Information and Communications (MIC) has granted 5G testing licenses to 3 mobile operators including Viettel, VinaPhone and MobiFone in 40 provinces and centrally-run cities. In 2022, the MIC encourages businesses to continue testing 5G applications, assessing market demand and technical solutions to build the most effective business plan when officially licensed.

Assessing the potential of the 5G network, Mr. Denis Brunetti, President of Ericsson Vietnam, Myanmar, Cambodia and Laos, said that by 2025, 5G is likely to contribute to Vietnam's GDP growth of 7.3 to 7.4% because this technology can improve labor productivity and business performance. In addition, 5G also contributes to the social development and digital skills of Vietnamese people, thereby creating jobs related to science, technology, environment and production. By 2030, 5G is expected to bring Vietnamese mobile operators a revenue of 1.5 billion USD./.

References

[1]. https://www.telecomlead.com/5g/how-telecom-operators-benefited-from-5g-business-strategy-analytics-106022

[2]. https://www.grandviewresearch.com/industry-analysis/5g-services-market

[3].https://www.grandviewresearch.com/industry-analysis/private-5g-network-market#:~:text=The%20global%20private%205G%20network,49.0%25%20from%202022%20to%202030.

[4].https://ictnews.vietnamnet.vn/vien-thong/40-tinh-thanh-pho-da-duoc-phu-song-5g-415668.html

[5]. GSA: Evolution from LTE to 5G - July 2022