5G Will Reshape the Global Telco Sector in 2020

5G Will Reshape the Global Telecoms Sector in 2020

December 10, 2019

The Economist Intelligence Unit , Chief Telecoms Analyst Matt Kendall says global mobile penetration will rise rapidly in 2020, broadband expansion will slow and fixed lines will fall.

According to the latest EUI Industries in 2020 report, as the rollout of 5G is expected to gather pace, operators will struggle to provide these services profitably.

The report claims global mobile subscriptions will grow strongly in 2020, reaching USD 7.3 billion. Growth is projected to be particularly rapid in Asia, the Middle East and Africa, where mobile penetration will grow by 11% compared with 2019.

However, in most regions, the number of fixed lines will continue to decline. The sole bright spot will be fixed broadband subscriber lines, which will reach nearly USD 1.1 billion in 2020. There are also substantial risks to these forecasts, including the US-China trade war, Brexit and the backlash against China’s Huawei’s dominance; the latter of which remains a sore point given Huawei’s dominance in providing vital 5G hardware.

Investment in 5G and fibre fixed-line services is likely to be a top priority for operators in 2020, but they will face challenges. The rollout will require a coordinated approach between regulators, governments and operators, to ensure that spectrum is released on time and at affordable prices. Even so, telecoms companies will find it hard to monetise 5G technology. Among consumers, only tech-savvy early adopters will be willing to pay a premium, so operators need to persuade businesses that 5G can revolutionise the way they operate.

According to EIU Chief Telecoms Analyst Matt Kendall, making 5G profitable may prove to be a challenge in 2020.

“The global telecoms sector can bank on yet more global growth during 2020, but the challenge will be to make that growth profitable. Most subscribers are unwilling to pay more for extra telecoms services or faster speeds. Operators will try to come up with compelling use cases, but many of them are likely to have cut costs during 2020 in order to improve their average revenue per user,” says Kendall.

To access the full report, click here.

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