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World on cusp of the 5G era

March 7, 2022

The annual Mobile World Congress hosts some of the world's largest communications companies

Jonathan Kriegel

CEO

Last week’s Mobile World Congress (MWC) explored how fifth-generation (5G) networks can transform multiple industries – including fintech, entertainment, and media. The discussion simultaneously highlighted how more investment is needed to help the technology manifest its full potential globally.

Jose Maria Alvarez-Pallete, Chairman and CEO of European telco Telefónica, pointed to 5G as a building block of a 21st-century digital infrastructure that makes new digital services accessible to everyone possible.

“Blockchain, quantum computing, the network edge, artificial intelligence (AI) and the new immersive worlds of Web 3.0 and the Metaverse – none of this can exist without ultra-broadband connectivity provided by 5G and fiber networks,” he said. “Underpinning this will be the most advanced telecommunications infrastructure to move the world forward.”

“Looking ahead, 5G is the catalyst for innovation. It will transform every industrial sector and underpin the next phase of the digital society,” added Vodafone CEO Nick Read.

5G progress to date

Newly released figures from GMSA Intelligence suggest that the world is only just entering the 5G era, with over a billion live 5G connections expected by the end of this year. By 2025 that figure is expected to account for 25% of total mobile global connections when most of the world still accesses the mobile Internet using 2/3/4G networks.

“180 mobile operators in 70 markets worldwide had launched 5G services at the end of last year. Mobile traffic grew by more than 40% in 2021, which is just the beginning”, commented Mats Granryd, Director General of the GSMA.

Granryd estimates that today just under half of the world’s population is not connected online – almost 3.7bn people. That includes around 450m people living outside areas not covered by mobile broadband (the coverage gap) and 3.2bn people in coverage but not yet using the mobile Internet (the usage gap). The latter is being reduced with over 1.4bn more people covered today than five years ago, but there are still the 450m that remain. And for many people in rural areas and emerging economies, mobile is the only way to get online.

Substantial investment in bringing 5G to every corner of the world is already in the works. The GSMA expects the telecommunications industry will spend US$6bn on infrastructure upgrades between now and 2025, 85% of which will be spent on 5G. Nevertheless, some countries and regions of the world are further ahead in their 5G journeys than others, particularly China and South Korea, along with some Gulf Cooperation Council (GCC) states like the United Arab Emirates (UAE), Saudi Arabia, and Bahrain.

While the US is catching up, Europe, Latin America, and other parts of the world need more investment and a political impetus, according to telecommunications insiders. Vodafone estimates that South Korea now offers 5G coverage to 90% of its population, while China enjoys 60% 5G coverage and the US 45%. However, in Europe, the equivalent figure is less than 10%, while Africa remains still rolling out 4G infrastructure.

Government impetus plays a significant role

For example, South Korea implemented the world’s first commercial 5G network as early as 2019. The country’s government created a Digital New Deal policy designed to establish a leading role in future technologies, including big data and AI alongside 5G. The plan was funded by US$62bn of funding over five years, with 5G infrastructure earmarked as the critical component.

Along with its state-owned counterparts, China Telecom and China Unicom also benefited from substantial government incentives. To that end, the South Korean government pledged to spend US$41m on building 5G and cloud computing infrastructure for use by its public sector, followed by an additional US$541m to encourage the convergence between 5G and AI. By the end of 2022, China Mobile expects to have rolled out over 1m 5G base stations, with 5G subscribers exceeding 330m.

Joakim Reiter, chief external and corporate affairs office at Vodafone, says the same impetus and support offered by the government in South Korea and China needs to be extended into other regions of the world if they are to close the gap.

“5G is no longer a telco issue, it’s a presidential issue for the whole of government, and we need a comprehensive platform mainstreamed into every part of the equation to make sure 5G is a key enabler for everything they do. He said that there needs to be a 5G New Digital Deal in every country,” he said.

Vodafone believes that 5G connectivity will be fundamental in helping different countries maximize their chance to exploit opportunities for jobs and growth created by new digital services. Deloitte agrees, predicting that 5G will contribute over US$2tn to the global economy over the next ten years.

Mobile World Congress gave telcos a platform to celebrate their contribution to helping that economy survive the pandemic by connecting billions of remote workers, students, and consumers. And the industry will play an equally critical role in expanding digital opportunities to other parts of the global economy in the times to come.

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