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  • Thierry Spanjaard

5G: the truth is out there

It may be a bit late to ask questions about it, but one may wonder where the urge in the 4G to 5G evolution is. Already 4G was perfectly fit for our needs: it allows fast communications for mobile phones and, at the same time, thanks to 4G modems, brings internet access to many places that are out of reach from regular wire connections. Besides its additional usages such as IoT, the most visible market for end users is the personal communication one.

So, the answer is elsewhere.

According to IDC, yearly smartphone shipments have been decreasing for two years in a row. In 2017, the industry shipped 1.465 billion smartphones, a 1% contraction vs. 2016 record shipments. In 2018, only 1.405 billion smartphones have been shipped, or a 4% year-on-year drop.

Gartner anticipates that worldwide smartphone shipments will decline by the largest margin in the market’s history in 2019, prior to a rebound in 2020 fueled by the commercial implementation of 5G. According to the analyst firm, 5G launches will boost smartphone sales and fuel growth of 2.9% in 2020, and the share of 5G-capable phones will increase from 10% in 2020 to 56% by 2023.

As current smartphones are already very powerful machines, users are keeping them longer than before, and more specifically longer than smartphone vendors would like.

A generation change every ten years is seen as healthy for the industry. It triggers the need for mobile network operators to make their network equipment evolve and pushes end-users to change their cell phones faster. Strategy Analytics anticipates that there will be 1.5 billion 5G enabled smartphones in 2025, that will add on top of the regular replacement market rate.

As a result, vendors have entered a permanent communication fight to try to appear as first in some 5G-related field. For instance, among recent announcements:

  • Huawei, the leading Chinese equipment vendor, announced it has already shipped over 200,000 5G-enabled base stations globally. Huawei added it had received 50 commercial contracts to date for 5G base stations.

  • The three South Korean operators, SK Telecom, KT and LGU+, launched their 5G networks in April 2019, and already announce that they surpassed the 3 million 5G subscriber mark on September 9th. The country’s mobile operators have more than 90,000 5G base stations, nearly double the number installed at launch.

  • Xiaomi announced in September 2019 its first 5G compatible handsets, which had been developed in collaboration with China Mobile, China Unicom and China Telecom.

  • China’s three major mobile operators started signing up 5G customers in September and already registered more than 10 million user to whom they offer handsets from Samsung, Vivo, Xiaomi or ZTE.

  • Deutsche Telekom has already deployed a network of 66 5G antennas in Berlin, along with sites in Bonn, Cologne, Darmstadt and Munich.

  • After a small scale trial during the rugby world cup, Docomo, Japan largest mobile operator by subscribers, along with KDDI and Softbank announced their plans to launch commercial 5G service in March or April 2020, in time to have their networks up and running for the Summer Olympics in Tokyo.

  • China Mobile officially announced its first self-branded 5G smartphone, the Pioneer X1, and announced its intention to have deployed 50,000 5G base stations by year-end.

In the longer term, analysts see no limits! By 2035, ABI Research predicts that 5G will have generated US$ 17 trillion (EUR 15.5 trillion) in total economic growth.

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