The fifth generation of mobile connection is just around the corner. Just like it happened with 4G, 5G will eventually become the leading mobile technology. The only difference is that this time it's not the U.S. or Japan, but China that is pioneering the cutting edge of mobile technology.
According to a report published by CSS Insights, 1 billion people will be using 5G connections by 2023. The mobile industry analysts forecasts that China will account for half of all 5G users by 2022. The report predicts that China will maintain a sizeable hold until 2025, accounting for 40 percent of global 5G connections that year. This adoption is expected to take place faster than 4G, but several factors might hinder its progress.
China will dominate 5G thanks to its political ambition to lead technology development, the inexorable rise of local manufacturer Huawei , and the breakneck speed at which consumers have upgraded to 4G connections in the recent past, Marina Koytcheva, VP Forecasting at CCS Insight, told CNBC.
According to the report, China will take the lead in 5G users, while Japan, the U.S. or South Korea will launch the first commercial 5G network. Meanwhile, Europe is expected to trail behind by at least a year.
Although 1 billion people are expected to use5G by 2023, the report doesn't foresee the new mobile generation having a dramatic presence in the Internet of Things (IoT). There are no clear expectations on how it will affect autonomous cars, and CSS states that such mission critical services will have to wait even longer to come to the fore.
CSS cautions there are still some uncertainties pertaining how and where network operators will deploy vast numbers of new base stations, the lack of clear business case for operators, and consumers' willingness to upgrade their smartphones. It all depends on users buying new devices that take advantage of 5G. Otherwise there's no point in continuing investing in it. Meanwhile, Europe is expected to face its own challenges, stemming from market fragmentation, the availability of spectrum, and the influence of regulators.
According to the forecast, mobile broadband access on smartphone will be the principal area of 5G adoption, representing a colossal 99 percent of total 5G connections by 2025.
Kester Mann, Principal Analyst, Operators at CSS Insight said: The unrelenting hype that has surrounded 5G for several years has seen a diverse range of applications put forward as the main drivers of adoption. Some of them will be relevant at different times of the technology's development, but the never-ending need for speed and people's apparently limitless demand for video consumption will dominate 5G networks.
However, CSS Insight sees fixed wireless access as 5G's first commercial application. The report forecasts that the US will be an early adopter, boosted by leading advocates like AT&T and Verizon. However, the long-term opportunity will remain small and the report expects it to represent only a small fraction of total connections.
Although the industry is apparently obsessed with everything being connected in the future, 5G will account for a relatively low number of connections in the Internet of Things (IoT) during the forecast period. 4G will fill the gap and will continue to satisfy demand until narrowband technology is fully supported within the 5G standard. Network operators have only just begun investing in LTW technologies such as NB-IoT and Cat-M to support devices that have life spans of several years. According the report, significant numbers of 5G connections in this area are unlikely before the second half of the 2020s.
Other services, the so-called mission critical services, such as autonomous driving - regularly touted as a killer application in 5G - will have to wait even longer to come to the fore.
Geoff Blaber, VP Research, America at CCS Insight comments: 5G is about creating a network that can scale up and adapt to radically new applications. For operators, network capacity is the near-term justification; the Internet of Things (IoT) and mission-critical services may not see exponential growth in the next few years but they remain a central part of the vision for 5G. Operators will have to carefully balance the period between investment and generating revenue from new services.