GSMA: 5G SA and 5G-A are booming, and operators will continue to increase investment

According to a research report released by the Global System for Mobile Communications Association (GSMA), by the end of 2023, there will be 1.6 billion 5G devices worldwide, with approximately 600 million new devices added in 2023. By 2030, 5G connections will continue to grow rapidly, and the number of 5G devices will account for 56% of all mobile connected devices.

As of last month, 261 operators in 101 countries around the world have launched commercial 5G services, and another 90 operators in 64 countries have committed to launching 5G technology. Although only 47 of these commercial 5G services use independent networks, which is lower than SMA's forecast for 5G SA, GSMA pointed out that there are another 89 deployment plans in the near future, which will greatly increase the number of operators adopting 5G technology because they hope to take advantage of the benefits of true 5G, including network slicing, ultra-reliable low-latency services, simplified network architecture, and more.

Discussions between the GSMA and operators have shown that 50% of operators listed network slicing as one of their two main options when determining the benefits of launching 5G SA. Network slicing is expected to bring more 5G monetization opportunities.

Currently, many operators are relying on 5G-based fixed wireless access (FWA) to achieve this goal. As the GSMA points out, "FWA has proven to be an important use case for 5G technology, and many operators are prioritizing this solution in their overall 5G launch strategy." As of January this year, 117 operators in 57 markets around the world have launched 5G wireless broadband services. In other words, more than half of the world's 5G markets have 5G FWA.

These 5G monetization opportunities are increasing with the development of the next generation technology, 5G-Advanced, whose standards are about to be finalized and the first deployments may begin later this year.

In fact, GSMA survey data shows that more than half of operators hope to deploy 5G-Advanced within a year of the standard being released. GSMA claimed in the report: "As a result, increased deployment of 5G SA and 5G-Advanced will kick off a new round of 5G investment in 2024, especially in the world's leading markets."

This is good news for vendors. Huawei has been a major advocate of 5G-Advanced (which the company also calls 5.5G) and spoke out on the issue at Mobile World Congress 2024 (MWC24).

For all operators, there are big benefits to investing in 5G: 5G multicast services, low-cost IoT support and enhanced integration with satellite resources are high on the list of potential use cases listed by the GSMA. For more advanced operators, spending on 5G SA and 5G-Advanced technologies, as well as driving 5G adoption in less developed markets, means their capital expenditures won’t fall much over the next few years.

GSMA pointed out in the report that by the end of 2022, the global mobile capital expenditure/revenue ratio will be 19%, which may be the peak of the 5G investment cycle. However, the report pointed out that "however, global mobile operators' capital expenditures are still expected to reach US$1.5 trillion during 2023-2030. Operators must deal with high operating costs, which are typically 4 times the cost of capital expenditures. This will prompt operators to accelerate the automation of networks and services and other measures to save operating costs."

That will be a big expense for operators, the GSMA said, but with global mobile revenues set to reach $1.25 trillion by 2030, they should be able to afford it.