July 2021 in telecoms: MWC21 & more

Curated: GSMA Intelligence takes on Open RAN and Public Cloud developments

Last month saw the return of MWC Barcelona– the most anticipated event in the Telecoms industry calendar. No surprises then, that we saw myriad announcements and developments in the last month from a wide spectrum of topics.

For this edition of CURATED, we decided to shed some light on developments in two of the most hotly debated topics in the industry right now – Open RAN and Public Cloud. As usual, we bring you a combination of known and unknowns from the topic.

Open RAN: Going Global

Do you know?

As of today, 73 operators from 38 markets have either deployed or committed to Open RAN deployments. Scanning through the list of operators and their geographical presence, it is clear that Open RAN is now going global, touching developed and developing markets alike. Be it Axiata announcing plans to deploy Open RAN in multiple countries by end 2021, MTN announcing its Open RAN plans across its footprint, OR the partnership between Airtel and Tata to deploy indigenous Open RAN solutions–highlighting the rapid global spread.

 The momentum continues in other parts of the world also with UK government funding a 5G Open RAN testing lab and Deutsche Telekom switching on its “O-RAN town” with massive MIMO radio units for high performance. The foundation of Open RAN was laid with the creation of TIP in 2016, but 2021 is clearly the year when we are seeing Open RAN gain global momentum. We saw many interesting developments in Open RAN space in the last month, some of which are highlighted below:

So what?

All the above points towards two things for Open RAN – growing momentum, and deployments going global. Does this mean that Telcos who have not yet advanced their Open RAN plans need to jump on the bandwagon now?

There is no clear “Yes” or “No” answer. This will depend on the current situation and requirements of each individual operator. Their decisions will be driven by factors such as   – where they are in the lifecycle of their legacy networks, what is their CAPEX vs OPEX split in networks investment, are they looking to upgrade brownfield networks or building a greenfield 5G network. According to the GSMA Intelligence Operator in Focus Network Transformation survey, Telcos also see ownership/co-ordination, lack of internal expertise and integration into existing systems as the top challenges for adoption of Open RAN. While cost saving is often advocated as one of the benefits of Open RAN, a lack of clarity on ROI also acts as a hurdle.

The above challenges do not mean Telcos must necessarily reject Open RAN. Rather, telcos need to be aware of their requirements and network evolution plans. And in the present, Telcos still need to get the ball rolling by forging partnerships that allows them to undertake R&D on existing networks, understand use cases with Open RAN deployments, and undertake trials to better inform their deployment decisions.

Are the clouds over public cloud clearing in telecoms?

Do you know?

What did leading public cloud evangelist, Danielle Royston, tout for public cloud at MWC? She said simply – ‘GO ALL IN’! It is natural for an evangelist to make such a statement but she backed it up by advocating the perceived benefits of utilising hyperscalers and public cloud, IE TCO savings (in millions and billions), scalability and flexibility, leveraging hyperscalers’ data centres both to save costs and use  their regional and local presence to make edge computing viable.

There were plenty of public cloud partnerships being announced by telcos prior to 2021. Yet the announcement from US telco Dish in April and the presence of Cloud City at MWC Barcelona highlights the momentum we now see in the adoption of public cloud. The increasing intersection of telecoms and public cloud is reflected in the below announcements and is also mirrored in the forthcoming MWC LA theme of Telco Cloud.

So what?

There is clear momentum behind public cloud in the telecoms industry with progress on multiple fronts from network related developments to co-developing enterprise related solutions and also hyperscalers working on future-proof solutions. But the industry is still divided on the killer use case. Where some in industry see latency as the benefit (leveraging data centres for edge computing) of using public cloud, others see the same as a risk arising from using shared space on a public cloud. Beyond this, the adoption of public cloud is also facing headwinds from the speculated risks to privacy and data security. The data sovereignty rules in some market will also make it difficult for many operators to fully embrace the public cloud.

However, the multitude of enterprise opportunities in the 5G era are only expected to be supported by the new cloud native architecture of 5G, powered by AI solutions and edge computing made possible using the cloud. This makes it inevitable for telcos to embrace cloud technology; the choice is simply between public or private cloud. To capitalise on the benefits of public cloud and overcome the highlighted risks and challenges, the industry must work together. A WAIT and WATCH approach does not always guarantee success but working together and co-creating solutions certainly does.

The transition to public cloud will be a gradual and phased process and will be made possible with initiatives from across the cloud ecosystem. Hyperscalers are also taking initiatives to make this happen for telcos – Google Cloud joining O-RAN alliance, Azure launching private MEC, and AWS introducing local data processing on outposts are sign of things to come.

Finally, do you know that?

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference.

By Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

June 2021 in telecoms: what can’t you miss

Curated: GSMA Intelligence takes on Smart City developments and Telco tower assets

This year, June is a notable month for the telecoms and tech industry because it’s ringing MWC in my ears. I am clinging to my excitement as the ecosystem comes together later this month to learn about, and experience, the announcements/demos/launches that will shape the future of the industry. Of course, the event is Hybrid this year; that means you can take in all the updates from the industry in real-time from the comfort of your office/living room/bedroom…wherever you’ve gotten used to working from.

The theme of MWC21 is “Connected Impact”, and as we scan through our News Feed from the last few weeks, that this is corroborated in the business strategies, industry partnerships, and other announcements from ecosystem players. In this edition of CURATED, based on the recent news, the two topics we selected to take a deeper look at are Smart city developments and operator Tower monetisation efforts. As always, we want to highlight the news items that might not have gotten a lot of attention, and call out the topics they signal – and how they could play an important role in shaping the future of industry.

5G: Critical piece of the Smart City puzzle?

Do you know?

Global smart city connections are expected to experience a massive increase from 307 million in 2020, reaching 837 million by 2025 (see chart 1). Cities and countries have been focused on Smart city opportunities for years, but the market has, generally, developed only in selected areas (Smart Meters, Smart lighting), leaving broader smart city ambitions unrealised.

So, will 5G change things?

There is no dearth of narrative on how the ability of 5G to connect millions of devices per square km, the ultra-low latency, and high throughput creates an optimal canvas to paint the smart city landscape. BUT, what also differentiates 5G, and make it a key enabler, is the new virtual and cloud native architecture of 5G and its confluence with technologies like AI, cloud, and edge. The cherry on the cake is 3GPP including licensed LPWA technologies, the key tech for IoT, as part of 5G specifications.  

With 5G now available from 168 operators in 68 countries (mobile+FWA) already, telcos/vendors/software providers are making inroads by forging partnerships and announcing their plans. In few such recent developments:

So what?

5G has the potential to unlock an array of opportunities for the ecosystem players in the smart city space. It is evident from the flux of announcements – highlighting the recent momentum gained – that telcos and other ecosystem players have started venturing into this space to capitalise on the existing opportunities.

But to make the most of it, they will also need to be mindful of the challenges (funding challenges, lack of interoperability between solutions from different vendors, who will take the E2E ownership) that can impede the progress. There is no unanimous solution to all the challenges, but as always, the “timing of involvement” is key. Government/Municipalities will be at the front and centre in the Smart city development, however, it is important for the ecosystem players to get involved from the planning stage. Collaborating early can help unveil business models that allow for cost and benefit sharing alongside the allocated budgets from the government. Coming together at the planning stage also ensures creation of interoperable solutions and open platforms.

Ultimately, the early involvement can help to lessen the impact of these challenges, and creates an opportunity to maximise on the potential benefits.

Tower Monetisation: Moving from controlling to hiving off tower assets

Do you know?

Tower monetisation, in different forms, is becoming a mainstream financing option for Telcos. There is a clear shift in business models from controlling infrastructure assets, to co-sharing, and evolving into sale and leaseback models.

Why? With heavy debt burdens, and increased CAPEX levels to support the deployment of next-generation tech, operators need to find money somewhere and tower monetisation comes as a viable option.

The ongoing trend of monetising tower assets via sale option is also noted in the announcements from operators in the last few weeks.

So what?

The new model of tower assets (sale and leaseback agreements) poses a win-win situation for both operators and towercos. There are clear benefits for the telecom operators in divesting stakes from their tower arms. The funds unlocked can be used to reduce debt and make investments in new infrastructure, helps to maintain focus on their core business, and also drive opex efficiencies. From the lens of towercos also, the business model works as they earn revenues from multiple tenants on the same infrastructure, and this model allows for the scalability and flexibility required to build next generation infrastructure.

Where towercos are competing for a bigger slice of infra assets with all these acquisitions, they need to remember that while scale is important, so are the new features and innovations (like edge and cloud). To remain competitive in the long term, they should allocate part of their investments to create future-ready infrastructure that can also support new generation technologies and features, like AI, Edge, cloud.

Finally, do you know that…

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition at GSMA Intelligence

May 2021 in telecoms: What news should be on your radar?

Curated: GSMA Intelligence takes on 6G and Digital Healthcare

Last month, we kicked off our new monthly blog series to explore recent announcements and trends in the telecom industry. We look at WHAT is happening in the industry, HOW it is impacting telcos, and WHY it is important.

The insights are based on our Industry Feed, one of the most complete repositories of mobile news in the market, curated daily by our team of experts.

In the last couple of weeks, we saw announcements on cloud platform deals, operators deploying new 5G use cases, 6G related announcements, as well as updates on private networks deals and deployments. Against this backdrop, we selected two topics – 6G and Digital Healthcare – to take a deeper look at. 6G is hot off the shelf and Digital Healthcare is the need of the hour.

6G: is the clock ticking?

Do you know that…

Recently, we have seen an increasing buzz in the industry around “6G” also referred to as “beyond 5G”. Be it the launch of Next G alliance in Q4 2020 or the launch of the “first 6G satellite” by China in the same quarter, 6G is clearly on the radar of industry. Developments like China claiming that Chinese companies account for about 35% of the 6G related patent applications, and the establishment of 6G vision group within the ITU-R to define key capabilities of 6G, are some of the contributors in propelling the industry to announce their 6G plans. What might you have missed?

  • The U.S and Japan have joined forces to invest USD 4.5 billion in R&D, testing and deployment of secure networks for the next generation of communications (6G)
  • The German government has earmarked up to EUR 700 million to pump into 6G research by 2025. The initial investment of EUR 200 million will be injected to create 6G research hubs that will work towards preparing the next generation of communications by co-ordinating activities and working with other international bodies
  • Huawei, at the company’s global analyst conference, announced plans to launch 6G equipment in 2030. Reportedly, Huawei is also planning to launch two test satellites in July this year to explore 6G technology
  • Next G alliance announced the formation of working groups and the launch of its technical program. The National 6G roadmap working group is the key group and will address the full lifecycle of 6G commercialization

So what?

Where 5G connections accounted for only 4.21% of global connections by the end of Q1 2021 (Source: GSMA Intelligence), the recent announcements and initiatives on 6G leave many people pondering if now is the right time for the 6G clock to start ticking, or should we still be focusing on 5G. We know that commercial mobile 5G networks only saw the light of the day two years back in 2019 and they have a long way to go to reach their full potential; from exploring digital innovations supported by 5G across various sectors to the deployment of pending standards from 3GPP release 17.

BUT, what also can’t be ignored is that we must start defining the 6G roadmap in the near-term. Some might argue that 6G is still in a nascent stage pending even the industrial definition and any focus on 6G right now will disturb the growth of 5G. However, as 6G is expected to be deployed commercially by 2030, planning needs to get underway now to support the commercial deployment within this timeframe. This includes discussions on spectrum requirements, defining 6G standards, etc. And, in the here and now, it includes looking for ways to integrate would-be 6G innovations into 5G networks.

Digital Healthcare: how far from reality and what is the role of telecom operators?

Do you know that…

The global digital healthcare market is expected to grow at a CAGR of 25% from 2019-2025. The adoption of digital practices in the healthcare (telehealth, remote monitoring devices) began years ago, but COVID-19 accelerated the digital transformation of healthcare by exposing the challenges in conventional healthcare systems. Telcos, for their part, are rapidly progressing in the digital healthcare space with partnerships/M&A in the ecosystem. In a few such partnership announcements recently…

  • AT&T and Cherish Health partnered to help monitor COVID-19 patients. A wearable biosensor device from Cherish Health capable of monitoring the oxygen levels, temperature and heart rate of a patient is powered by the First Net network built by AT&T.
  • LifeLabs teamed up with TELUS Health to offers its MyCareCompass customers virtual counselling through the Babylon app from Telus Health.
  • T-Mobile – U.S.A and Zyter have collaborated to make virtual healthcare accessible to more people. Zyter will leverage the network footprint of T-Mobile to bring patients and healthcare professionals closer remotely.
  • Airtel – India joined hands with Apollo 24/7 to offer its Airtel Thanks customers virtual healthcare services (Airtel Thanks is an exclusive rewards program for valued Airtel customers which gives them access to a host of exclusive rewards, perks & privileges).

So what?

Digital healthcare opportunities have been on the radar of operators for quite some time now. Years ago, it began with M2M enabled glucose and blood pressure monitoring devices where data could then be accessed by healthcare professionals on a cloud platform. Fast forward to 2020, the strain caused by the pandemic on healthcare infrastructures and the need to stay-at-home gave a push to digital healthcare solutions like telehealth consultations, virtual care platforms and virtual pharmacies.

What’s at play for mobile operators? According to a GSMA Intelligence’s survey of operators in 2020, healthcare was among the top verticals deemed by operators as an opportunity in the 5G era to boost their revenues “beyond connectivity”. Predicted use cases of 5G like remote surgery are still a work in progress, but the availability of 5G already in 59 countries has put the long awaited digital healthcare initiatives on a fast track to success.

Riding on the back of these partnerships, operators are well on their journey to play a key role in the digital transformation of healthcare. Healthcare in a majority of the economies is big enough – and is only growing with situations like pandemic – to offer multiple opportunities to operators across the value chain such as connectivity providers, private network deployments, cloud storage, data analytics, developing virtual platforms, remote screening and diagnostics.

It would not be premature to say that Digital Healthcare is moving further in the direction of reality and that operators are busy carving out their space in the new healthcare system. TELUS Health sets a good example in this regard, the revenue from health services accounted for approx. 3.5% of total revenues (Fixed + Mobile + Broadband + Health) in Q1 2021.

Finally, do you know that…

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition at GSMA Intelligence

Accelerating the Omnichannel Retail Experience with IoT

Recently, Amazon announced the opening of its Amazon Salon in London, a hair salon to test “the latest industry technology,” such as augmented reality (AR). This development is hot on the heels of its “cashier-less” grocery store, which mimics a traditional grocery store but with the ability for shoppers to pay for their items without having to check out at a cashier. The store uses high-tech cameras linked to inventory stocks to achieve this experience.  

Combined with an easing of lockdown restrictions, it’s truly a great time to be living in London! (Though, to be fair, the London outlet joined over 20 stores already in operation across the U.S. under the “Amazon Go” brand.)  

While this move further signals Amazon’s ambitions to expand its share of the consumer wallet beyond online distribution, the greater significance is that it underlies the overall transformation of the retail sector, which has only accelerated because of the COVID-19 pandemic. Indeed, the pandemic has changed the face of retail forever: Brick and mortar stores with no online presence, and hospitality and tourism generally, have felt the negative impact of the pandemic the most, having to close doors to adhere to COVID-19 rules. But, even where business has been less impacted, the move to an omnichannel retail experience—integrating mobile apps, social media, in-store, and online shopping for a seamless customer experience—has been hastened. 

Data-Driven Digital Transformation

Of course, like so many other industries, the retail sector’s digital transformation must be data driven. According to the GSMA Intelligence Enterprise in Focus survey 2020, 63% of retailers deployed IoT as part of a wider transformation agenda. 69% of surveyed companies, in turn, have already deployed IoT solutions (see chart), with a majority having less than 500 connected IoT devices.  

Connecting the assets, however, is just the first step. The next step is to collect, and then analyze, data to gain meaningful insights to change business processes in line with strategic goals. What are those goals? Per the survey, the top three IoT objectives for retail companies are: 

  • QoS (45%) 
  • Customer loyalty (44%)  
  • Supply chain management (40%) 

Of course, technologies, such as SD-WAN, 5G, edge computing, AI, and IoT play a key role in enabling all of this.  

 IoT deployment status, retail

Revenue Generation is Top of Mind

When asked whether IoT was deployed to save on costs or to generate new revenue, IoT decision-makers were equally split in 2019 (50% each). In 2020, however, revenue generation came out on top (52%), with retail decision-makers being ever so slightly above the average at 54% (a 4% increase from 2019). Although this percentage change is small, it reflects a steady move towards using data-driven insights to create new revenue streams as a reason for IoT deployment. 

Real-Life Retail Applications 

So how about some real-life examples of the retail applications that are currently on the rise? 

Contactless Payments

Point-of-sale will remain the largest segment within retail:
Even before the pandemic, this transition has been supported by moves to cashless payments and government initiatives to stimulate electronic payments, such as those in India and Mexico. The coronavirus pandemic has taken the move to another level as it facilitates germ-free, fast, and safe transactions. Also, due to social distancing restrictions, roaming PoS is on the rise, with tablets/PoS being carried around by staff members, as pubs and restaurants move to ensure Covid-safety guidelines are being followed, while reducing congestion.   

Autonomous Checkout 

It’sthe final step in the journey retail has been undergoing to streamline the whole shopping experience:
From cashier-less self-checkouts, scan-and-go, click-and-collect and mobile checkout. Autonomous checkout, e.g. Amazon’s “just walk out” technology mentioned earlier, allows retailers to grow their operational efficiency and profit margins. What’s more, automating the process itself leads to a greater data capture and a better understanding of customer behavior, which in turn can inform retail strategy by AI-enabled personalized marketing and content management.  

Robotics 

Ocado, the Britishonline retailer, had already transformed itself into a technology company, investing in robotics, AI/ML, edge networking, and its Ocado Smart Platform (OSP). Its recent partnership with Oxbotica takes this forward, aiming to increase warehouse automation, via the use of robots for packing, transporting, and delivering groceries. Supported by a private LTE network to control 1,000 fast moving robots in its logistic center, we can see the shape of things to come.  

While the pandemic has boosted the rise of enterprise systems, such as ERP systems, payroll systems from on-prem to the cloud, it has also underlined the need to process data at the edge. By moving workloads to the network edge, devices can run algorithms to analyze data and act locally, sending only what’s needed to the cloud. At the same time, data security and ensuring data privacy is key—our data indicates that retailers that deployed IoT to ensure regulatory compliance have done so to adhere to data-security regulation.  

So, what comes next? 

5G is a given. And, as it matures, the retail sector already has clear expectations focused on higher speeds (65%), private networks (58%), and latency (52%). 5G, however, needs to be seen as a means to an end. After all, enterprises aren’t concerned with technology per se—they want to connect the physical and digital worlds. Today’s technology discussions—whether focused on AI/ML, IoT, 5G, edge, or SD-WAN solutions—need to be focused on delivering that. 

By Sylwia Kechiche, Principal Analyst for IoT & Enterprise, GSMA Intelligence

Sylwia will join MEF and other industry experts to discuss IoT and AI in retail on Wednesday, 26 May. Find out more and register.

Curated: GSMA Intelligence takes on mobile news

April 2021

In this new monthly blog series, we explore recent mobile industry announcements, and why they matter to you and the ecosystem. These insights are based on our Industry Feed, one of the most complete repositories of mobile news in the market, curated daily by our team of experts.

In the last few weeks, there were several developments in the mobile industry involving, but not limited to: Open Ran deals, 5G launches, coverage expansion, private networks demos/trials, industry partnerships, network/operator closures, restructuring…and more.

From these recent events, the team selected two market developments, and pondering their impact on the future of the industry:

Spin-off, Sell, or Shuffle – What is the latest with restructuring in telecoms?

Do you know that…

Recently two big operators announced new restructuring plans. Bharti Airtel shuffled its existing structure and announced a new structure that involves: (1) folding “Airtel Digital – the digital assets company” in the main holding company “Bharti Airtel”, and (2) creating a new 100% owned subsidiary “Airtel Limited” that will focus on the telecom business of the company (includes DTH business that will eventually be folded into the main telecom company). Separately, SK Telecom announced plans to spin off its telecom businesses into a new separate entity. The existing entity, also referred to as surviving entity, will house the telecom businesses (including SK Broadband), and a new holding company will be created that will oversee the leading tech subsidiaries of SK Telecom dealing into businesses ranging from semi-conductors to e-commerce. In another news, Indosat – Indonesia has joined the club of operators monetizing their tower/infrastructure business. The operator completed the third and final sale of its tower assets involving sale of 4,200 towers at a value of USD 750 million. The proceeds from the sale will be used to improve network performance and launch digital innovations.

So what?

Whether it’s a spin-off, organizational shuffling, or asset sale, the purpose and focus of restructuring is same: Monetize non-core businesses, unlock valuations of tech subsidiaries, tap digital innovation opportunities, and drive future growth in telecom business.

Not one size fits all! The same structure might not work for all the operators universally but what will work is the identification of assets/business that can be monetized in some or the other form and leveraging those assets. For some, it can be the tower business whereas for others it can be e-commerce companies or digital channels that will unlock valuations and drive funds too.

In another news…

Operators and Vendors step up their efforts on 5G private networks

Do you know that…

Operators are quickly moving from the partnership stage to trials/demos and deployment of 5G private networks. In recent announcements from U.S., AT&T has developed a 5G private network at Chicago’s MxD to help companies learn how private 5G networks can improve their manufacturing operations while Verizon, on the other hand, along with AWS, is testing private MEC at Corning’s Smart factory. Outside the U.S, TDC – Denmark and Ericsson came together some time ago and launched private 5G network pilot at grundfos plant, the findings and learning are now shared as valuable insights for future applications. From Asia, Singtel launched GENIE, a portable 5G platform to enable enterprises to experience 5G’s capabilities and trial use cases in their own premises. Meanwhile, Edzcom deployed private 5G networks at Mussalo and Hietanen shipping terminals and NOS installed 5G network at Sport Lisboa e Benfica stadium.

Industry partnerships are also very important and require the ecosystem to come together to deliver private networks set-up for enterprises. In last few weeks, we saw this as a number of players joining forces in separate deals to bring private 5G networks to life. Some of them are:

  • Orange partners with Ericsson to provide private automotive connectivity to Applus+ IDIADA
  • T-Mobile to deploy 5G campus network for Czech university
  • Claro, Embratel and Ericsson set up 5G Smart Campus in Sorocaba
  • Siriraj Hospital teams up with Huawei to develop a cloud-based unified management system

So what…

Now is the time for players to gain first mover advantage when it comes to 5G private wireless networks. LTE private wireless networks are already on the market, but 5G is expected to unlock new opportunities. Industrial IoT and a number of other enterprise use cases demanding low latency, high throughput and secure communication can be realised with 5G private networks.  There are various business models at play in the deployment of private networks; identifying your role in these models and early partnerships to seize on the opportunity will give an operator/vendor leading edge.

Finally, do you know that…

All the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow, without interference.

 

Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

Intelligence Brief: How has the Indian mobile sector survived Covid-19?

The outbreak of Covid19 (coronavirus) has impacted almost every country across the globe and India is no different. In fact, for the last two quarters, India was among the top ten most affected countries in terms of infections and deaths. Stats for the Indian telecom market, however, suggest it has remained on a stable footing; in Q2 2020, among the top ten most affected countries, eight reported a negative mobile revenue growth (year-on-year basis). India and Brazil were the only two countries to report positive mobile revenue growth.

Revenue growth is important, but only one part of the story. Let’s have a quick look at some of the key metrics to identify the overall impact:

Revenue and ARPU: Indian telecom operators reported strong growth in revenue during the quarter ended June 2020, thereby defying the economic slowdown from the countrywide lockdown of 68 days through the end of May. Together commanding a subscriber market share of more than 60 per cent – Reliance Jio and Bharti Airtel witnessed a strong ARPU uplift and an annual positive revenue growth of 33.7 per cent and 14.7 per cent respectively. On the other hand, Vi (earlier known as Vodafone Idea) reported a revenue and ARPU quarterly decline of 9.3 per cent and 6 per cent respectively during the quarter, mostly due to existing debt.
Lower churn levels: Jio reported a strong wireless gross addition of 15.1 million (36.4 per cent increase year-on-year) despite Covid-19 related restrictions across the country, owing to the increase in demand for data and heavy reliance on 4G networks in India. Monthly churn rates reached all-time lows in the last five years, owing to retail store closures. Bharti Airtel and Vodafone Idea reported churn at 2.2 per cent and 2 per cent respectively during the quarter ended June 2020.
EBITDA/EBITDA Margin: The leading two telecom operators, Reliance Jio and Bharti Airtel, reported an annual increase in pre-tax profit of 55 per cent and 35 per cent and margin growth of 4 percentage points and 6 percentage points respectively during the quarter ended June 2020, thereby defying the economic slowdown.

It is evident from the above that Indian telecoms weathered the Covid-19 storm well, but the bigger question is how? What makes India different from other countries in the list?

The power of people and ubiquity – India’s demographic is very different from all other most adversely affected countries. With a population of more than 1.3 billion people, India has a huge market base which helped cushion the overall impact of the crisis. LTE subscribers in India rose around 26 per cent year-on-year to around 644 million by June 2020. This clearly shows India’s reliance on mobile phones for various reasons.
Low fixed penetration giving mobile a window of opportunity – According to TRAI (the Indian telecom regulator), of the 683 million broadband subscribers in India as of May 2020, 664 million were using mobile broadband and 19 million were on fixed broadband. The market witnessed quite a surge in its data traffic due to the nationwide lockdown and new norm of remote working. The pressure created from this massive shift from the normal practices to the digital ones was likely to fall upon the mobile networks because of the limited fixed penetration and insufficient fibre layout in the Indian telco market.
Tariff hikes translated into incremental ARPU – The operators announced tariff hikes in the last months of 2019, immediately before the pandemic. These hikes were in the prepaid segment, accounting for nearly 90 per cent of India’s mobile subscribers. Now, the increased data traffic on mobile networks (see chart below, click to enlarge) resulting from Covid-19 combined with increased tariffs translated into growth in ARPU and revenues. This explains how Indian operators remained resilient during the Covid-19 storm.

[1]While it’s true that the Indian telco market has suffered less financial impact due to Covid-19 in comparison with other countries, uncertainty related to economic recovery of the country, pressure to meet ever increasing demand for data services, and competitive intensity still pose a great threat to the sector’s financial stability. So, how does the sector remain sustainable in the long term and deliver on the demands of the new normal? What steps/measures can aid operators?

More harmonised Spectrum: Due to the relatively limited extent of fixed infrastructure, the pressure from the extra traffic created by the shift to remote life is likely falling on the mobile network – primarily LTE. Satish Jamadagni, VP for network planning at Reliance Jio, recently claimed LTE cells in the country are at 90 per cent to 98 per cent capacity, compared to other countries at 40 per cent  to 50 per cent capacity. This clearly shows the appetite for more 4G spectrum in India.

Not just front end spectrum; telcos in India are also facing some backhaul constraints. Spectrum in the E-band and V-band is seen as a crucial backhaul option as the operators plan to modernise their existing 4G networks with 5G ready technologies. However, this spectrum is yet to be released by the government.

According to a recent GSMA Intelligence report [2], mmWave in India can offer opportunities in enhancing mobile broadband (eMBB) and fixed wireless access (FWA). In order to maximise the socioeconomic benefits of mmWave enabled 5G, the Indian government should consider providing timely access to the right amount and type of affordable spectrum, under the right conditions. This will ensure they are able to deliver the low-latency, high speed and high capacity capabilities of 5G.

Boost in Digital Infrastructure: Currently, India has the second largest pool of internet users but lags behind Asian peers like Korea, Japan and China in terms of fibre connectivity. It is believed that if the state governments facilitate RoW (Right of Way) to roll out digital infrastructure, it could not only accelerate the economic progress of states but also make them competitive and help realise various initiatives such as generating jobs, education, healthcare and smart cities.
Services beyond Core: According to a recent study conducted on major operator groups by GSMA Intelligence, services beyond traditional core contributed to approximately 22 per cent of total revenue, which is mainly driven by PayTV accounting for 28 per cent of non-core service revenue. Currently, when traditional services in India (accounting for more than 90 per cent of total revenues) aren’t expected to drive further growth, new (non-core) services can hold promise for better opportunities. Operators are already collaborating with vendors to provide enterprise solutions, such as Airtel recently partnering with Cisco to provide a wide range of cutting edge security solutions to its business customers as well as government entities.
Cross-sell fixed services: Digital dependence in terms of entertainment OTT apps, gaming, educational tech along with health tech is very evidently on the rise. To achieve higher ARPU, operators are already bundling their mobile services with OTT apps, but the converged players now need to provide reliability and high speeds that in India can be served by fixed networks. Converged players need to aggressively cross-sell their fixed services to meet growing demand.

It is clear the Indian telecom market has held up fine till now but there is a lot that needs to happen for the sector to not only survive but thrive in this economic crisis. LTE networks are already overburdened with rising data traffic demand. If the traffic is not diverged towards fixed network assets or additional spectrum is not made available, then operators could find it difficult to keep up with demand. Clearly, government has to be the facilitator while telecom operators and other players invest and create an infrastructure backbone. With the rise in demand for data and content, there will also be pressure on the market to  drive 5G momentum in the coming years.

– Divya Bhargava – Delhi team lead, and Pranika Chauhan – research analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/11/ib2.jpg
[2] https://data.gsmaintelligence.com/research/research/research-2020/the-impacts-of-mmwave-5g-in-india

Intelligence Brief: How has the Indian mobile sector survived Covid-19?

The outbreak of Coronavirus (Covid-19) has impacted almost every country across the globe and India is no different. In fact, for the last two quarters, India had been among the top 10 most affected countries in terms of infections and deaths. Stats for the Indian telecom market, however, suggest it has remained on a stable footing; in Q2 2020, among the top 10 most affected countries, eight reported a negative mobile revenue growth (year-on-year basis). India and Brazil were the only two countries to report positive mobile revenue growth.

Revenue growth is important, but only one part of the story. Let’s have a quick look at some of the key metrics to identify the overall impact:

Revenue and ARPU: Indian telecom operators reported strong growth in revenue during the quarter ended June 2020, thereby defying the economic slowdown from the countrywide lockdown of 68 days through the end of May. Together commanding a subscriber market share of more than 60 per cent – Reliance Jio and Bharti Airtel witnessed a strong ARPU uplift and an annual positive revenue growth of 33.7 per cent and 14.7 per cent respectively. On the other hand, Vi (earlier known as VodafoneIdea) reported a revenue and ARPU quarterly decline of 9.3 per cent and 6 per cent respectively during the quarter, mostly due to the existing debt.
Lower churn levels: Jio reported a strong wireless gross addition of 15.1 million (36.4 per cent increase on y-o-y basis) despite Covid-19 related restrictions across the country, owing to the increase in demand for data and heavy reliance on 4G networks in India. Monthly churn rates reached all-time lows in last 5 years, owing to the retail store closures. Bharti Airtel and Vodafone reported churn at 2.2 per cent and 2 per cent respectively during the quarter ended June 2020.
EBITDA/EBITDA Margin: The leading two telecom operators, Reliance Jio and Bharti Airtel, reported an annual increase in pre-tax profit growth of 55 per cent and 35 per cent and margin growth of 4 percentage points and 6 percentage points respectively during the quarter ended June 2020, thereby defying the economic slowdown due to Covid-19.

It is evident from the above that Indian telecoms weathered the Covid-19 storm well, but the bigger question is “how?” What makes India different from other countries in the list?

The power of people and ubiquity – India’s demographic is very different from all the other most adversely affected countries. With a population of more than 1.3 billion people, India has a huge market base which helped cushion the overall impact of the crisis. LTE subscribers in India rose around 26 per cent year-on-year to around 644 million by June 2020. This clearly shows India’s reliance on mobile phones for various reasons.
Low fixed penetration giving mobile a window of opportunity – According to TRAI (the Indian telecom regulator), of the 683 million broadband subscribers in India as of May 2020, 664 million were using mobile broadband and 19 million were on fixed broadband. The market witnessed quite a surge in its data traffic due to the nationwide lockdown and new norm of remote working. The pressure created from this massive shift from the normal practices to the digital ones was likely to fall upon the mobile networks because of the limited fixed penetration and insufficient fibre layout in the Indian telco market.
Tariff hikes translated into an incremental ARPU – The operators announced tariff hikes in the last months of 2019, immediately before the pandemic. These hikes were in the prepaid segment, accounting for nearly 90 per cent of India’s mobile subscribers. Now, the increased data traffic on mobile networks (see chart below, click to enlarge) resulting from Covid-19 combined with increased tariffs translated into growth in ARPU and Revenues. This explains how Indian telcos remained resilient during the COVID-19 storm.

[1]While it’s true that the Indian telco market has suffered less financial impact due to Covid-19 in comparison to other countries, uncertainty related to economic recovery of the country, pressure to meet ever increasing burden due to rising demand of data services, and competitive intensity still pose a great threat to the sector’s financial stability. So, how does the sector remain sustainable in the long term and deliver on the demands of the “new normal”? What steps/measures can aid operators?

More harmonised Spectrum: Due to the relatively limited extent of fixed infrastructure, the pressure from the extra traffic created by the shift to remote life is likely falling on the mobile network – primarily LTE. Satish Jamadagni, VP for network planning at Reliance Jio, recently claimed LTE cells in the country are at 90–98 per cent capacity, compared to other countries at 40–50 per cent capacity. This clearly shows the appetite for more 4G spectrum in India.

Not just front end spectrum; telcos in India are also facing some backhaul constraints. Spectrum in the E-band and V-band is seen as a crucial backhaul option as the operators plan to modernise their existing 4G networks with 5G ready technologies. However, this spectrum is yet to be released by the government.

According to a recent GSMA Intelligence report [2], mmWave in India can offer opportunities in enhancing mobile broadband (eMBB) and fixed wireless access (FWA). In order to maximise the socioeconomic benefits of mmWave enabled 5G, the Indian government should consider providing timely access to the right amount and type of affordable spectrum, under the right conditions. This will ensure they are able to deliver the low-latency, high speed and high capacity capabilities of 5G.

Boost in Digital Infrastructure: Currently, India has the second largest pool of internet users but lags behind Asian peers like Korea, Japan and China in terms of fibre connectivity. It is believed that if the state governments facilitate RoW (Right of Way) to roll out digital infrastructure, it could not only accelerate the economic progress of states but also make them competitive and help realise various initiatives such as generating jobs, education, healthcare and smart cities.
Services beyond ‘Core’: According to a recent study conducted on major operator groups by GSMA Intelligence, services beyond traditional core contributed to approx. 22 per cent of total revenue, which is mainly driven by PayTV accounting for 28 per cent of non-core service revenue. Currently, when traditional services in India (accounting for more than 90 per cent of total revenues) aren’t expected to drive further growth, new (non-core) services can hold promise for better opportunities. The operators are already seen collaborating with vendors to provide enterprise solutions, such as Airtel recently partnering with Cisco to provide a wide range of cutting edge security solutions to its business customers as well as government entities.
Cross-sell fixed services: Digital dependence in terms of entertainment OTT apps, gaming, educational tech along with health tech is very evidently on the rise. To achieve higher ARPU, operators are already bundling their mobile services with OTT apps, but the converged players now need to provide reliability and high speeds that in India can be served by fixed networks. Converged players need to aggressively cross-sell their fixed services to meet the growing demand.

It is clear that the Indian telecom market has been holding up fine till now but there is a lot that needs to happen for the sector to not only survive but thrive in this economic crisis. LTE networks are already overburdened with rising data traffic demand. If the traffic is not diverged towards fixed network assets or additional spectrum is not made available, then operators could find it difficult to keep up with demand. Clearly, government has to be the facilitator while telecom operators and other players invest and create an infrastructure backbone. With the rise in demand for data and content, there will be pressure on the market to  drive 5G momentum in the coming years.

– Divya Bhargava, Delhi Team Lead, GSMA Intelligence and Pranika Chauhan, Research Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/11/ib2.jpg
[2] https://data.gsmaintelligence.com/research/research/research-2020/the-impacts-of-mmwave-5g-in-india

Intelligence Brief: China on brink of breaking 200M 5G connection mark

Recently, the Ministry of Industry and Information Technology (MIIT) of China revealed more than 150 million terminals were connected to 5G networks, up from 100 million a month ago.

Based on this, GSMA Intelligence have updated the 5G forecasts. Where does it leave us? We now expect that, by the end of the year, 5G connections in China will surpass 200 million (see chart, below, click to enlarge). This means about one-in-eight of the total consumer mobile connections will use 5G networks.

[1]

The rapid growth can be explained by four drivers:

The post pandemic economic recovery. In Q3, quarterly GDP growth turned positive as most business activities are back to normal, including the retail market, which helps device sales. Moreover, a big e-commerce promotion day, the double eleven shopping festival in November, will help drive 5G device sales.
Increased options of 5G handsets with a wide price range. Vendors have started to shift their focus from 4G to 5G. Search handsets on major Chinese e-commerce platforms such as taobao or JD and the first few pages are dominated by newly released 5G models. Of course, the iPhone 12 5G is heavily marketed on major social media platforms but, beyond high-priced flagships, some 5G smartphone prices have dropped below CNY2,000 ($298). According to the official data from the regulator, 5G models have kept more than 60 per cent of total handset shipments since June.
The story looks similar to the 4G migration in 2015. We are at another junction: the new generation phones are becoming the norm. Following the history, we can expect 4G models would be kicked-out from the new lines in the future.
Attractive 5G data tariffs for data crunchers. 5G is available at a much cheaper per-GB-price than 4G. Far before the handset price dropped, operators started their promotions on 5G data tariffs. Those offers can be purchased without a 5G device, meaning customers can enjoy the price advantage on data, however they will only have 4G speed. This strategy generated a big gap between reported 5G package users from the operators and real connections. Many customers felt the 5G data price was attractive while the handsets were not. Recently, however, it appears many of them have purchased 5G handsets with the vendors’ promotion as mentioned above, which contributed to the jump over the last month.
Fast network rollout. Without a promising coverage, customers will still not be motivated to buy a new 5G handset. Luckily, Chinese operators have built 60,000 base stations, 20 per cent over their target set at the beginning of the year. The regulator prioritised 5G as a long-term strategic plan at the national level. This helps put pressure on operators to accelerate deployment.

The pay off
Monetisation of 5G consumers remains work in progress. No 5G premium is charged and the per-GB price is cheaper than 4G. Chinese consumers spend lots of time on their mobile phones. They watch TV content, short videos, live streaming and play games with mobile data. And they pay subscription fees to content providers and feed advertising revenue to platforms. But direct revenue from consumers to operators only comes from data package charges. 5G might, hopefully, shift consumers to a higher price band of data packages or take revenue from fixed broadband providers. We need to wait and see if year-end ARPUs do increase with 5G uptake.

Whether or not consumer 5G pays off at a sound pace, the deployment for the consumer segment can open opportunities for B2B 5G sales, including for the public sector. The network rollout usually follows a trace of population density and urbanisation, where those cities have big pressure on infrastructure maintenance, traffic management, and public resources allocation. 5G use cases of smart cities are exactly addressing those issues. Self-driving buses/taxis are also a benefit to public transportation, helping improve transport efficiency and safety. Trials of those use cases are happening in China. Therefore, operators can look for the synergy between B2B and B2C in the deployment cost.

The most important message from the jump of 5G connections is that customers are willing to pay for fast speeds and new use cases. After all, a new phone would be used for more than two years, which is long enough for innovation in consumer applications. While everyone expects B2B to be the most important incremental revenue opportunity in the 5G era, most of the B2B models can’t stand without the consumer segment. Now that 5G has kicked off, it is super important to track and assess future growth and value opportunities for all stakeholders.

– Gu Zhang 张谷  – senior forecaster, Core Data, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/10/GSMAIntelligence_China_5G_forecast_Oct2020.jpg

Intelligence Brief: Why is mmWave the new hotness?

Apologies if you’ve heard this story before, but one of the first projects I worked on as an analyst was a research piece focused on opportunities for the use of 28GHz spectrum in the US. Recent auctions had just taken place for what was being called Local Multipoint Distribution Service (LDMS) spectrum and people wanted to know what the market was for services in the band.

Ultimately, the use case that gained the most attention was broadband connectivity to enterprises, think fibre-like competition which would enable a new era of telco competition. And, ultimately, that use case didn’t actually propel those competitors to major success. Maybe it was because of their business cases. Maybe it was technology limitations: I recall a conversation at the time with a colleague who did not believe mmWave spectrum could be used for anything other than point-to-point connectivity.

Regardless, here we are 20-plus years later and mmWave spectrum is getting more attention than ever, and it’s worth considering why. Despite what the events of the past week suggest, it’s about more than just the:

iPhone 12. The headline news with the new iPhone is 5G compatibility. Whether or not that is critical for would-be iPhone users, it’s particularly important for operators which want to move traffic on to their new 5G networks. And, for operators in the US which want to get users onto mmWave 5G, there is compatibility for that too. It’s not the first smartphone with mmWave 5G, but the massive demand for the iPhone ensures it will generate lots of mmWave traffic, and information.
Spectrum assignments. The US might get most of the attention when it comes to mmWave (along with support from Apple), but it’s not alone in assigning the spectrum for 5G. Thailand, Hong Kong, Taiwan, Singapore and Finland have all assigned it. And Greece, Chile, Argentina, Brazil and Australia have awards planned. This means we will be seeing more demand for mmWave devices, more experience with how 5G works in the band and, of course, mmWave economies of scale.
6G. I’m sure the mere mention of the next G will cause many people to groan. Forget for a moment technology vendors and industry organisations like ATIS have begun talking-up 6G. We’ve already seen speculation on the spectrum it might operate in: sub-mmWave or Terahertz. Sure, this is approaching infrared light. More importantly, it also highlights the industry will need to figure out the economics and mechanics of mmWave 5G in the mid-term.
Data demand. On the topic of mmWave 5G economics, it all begins with a very simple premise: increased data demand driven by myriad high-bandwidth use cases will make the use of mmWave spectrum a necessity. Sure, you could argue new spectrum is never really needed. It’s possible to simply keep shrinking cell sizes and densify networks to dizzying heights. But there is a point where siting and the associated costs become untenable.
TCO. Data demand versus siting costs versus. infrastructure costs versus spectrum costs versus use cases all capture a dynamic which can be described in four words: Total Cost of Ownership (TCO). Where the TCO of using mmWave spectrum for 5G is greater than using other spectrum, there’s no reasonable expectation operators would put it to use. And, to be fair, evaluating this TCO has traditionally difficult given the newness of using it. But, circa 2020, we can begin to estimate mmWave 5G TCO. In fact, it’s something my team is currently engaged in. Initial results look positive: you can learn more by tuning into a presentation we’ll be giving as part of Qualcomm’s 5G Summit.

What’s not captured in the list above, though, may be the most important reason for all the attention: the fact that connecting our phones via mmWave spectrum is even possible. You don’t need to go back in time 20 years or more to find very real discussions about the viability of using high-frequency spectrum for personal communications. “It’s basic physics”, was a common refrain from many camps claiming it would never work. At best, they’d claim, the use case would be fixed, not mobile.

Put aside the potential and market momentum, the mere fact we now have mass-market phones and networks compatible with mmWave bands and networks is an impressive feat, and something worth the buzz all by itself.

– Peter Jarich – Head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

Intelligence Brief: Will 5G iPhone change the game?

Apple will hold a virtual media event today (13 October) at which it is expected a new iPhone with 5G capability will be unveiled.

The would-be successor to its most recent models, the iPhone 11 and lower priced SE, carries with it extra intrigue because Apple is a relative latecomer among handset manufacturers to the 5G era. While this would not be the first time Apple has eschewed a rush to market approach, the stakes are higher now with new iPhone sales constrained by longer upgrade cycles and, of course, the Covid-19 (coronavirus) pandemic.

There is also the question of whether Apple can inflect broader 5G adoption single-handedly by introducing the world to a feature it did not know it needed. We explore potential implications below both from the perspective of Apple and 5G take-up more broadly.

Rush to buy or wait and see?
The first question to understand is the likelihood of current iPhone owners to upgrade to a 5G model. The positive for Apple is that it commands a fiercely loyal customer base. Our survey data indicates more than 90 per cent of iPhone owners want their next phone to be another iPhone, well above any other handset manufacturer. Furthermore, with their higher-than-average levels of income, the Apple user base is better positioned to afford the new handset and the accompanying 5G mobile tariffs than its competitors.

A number of factors, however, indicate take-up may not follow a mass migratory path:

Upgrade intentions are still middle of the road. Our survey data (see chart, below, click to enlarge) suggests existing iPhone owners are no more likely to upgrade to 5G than others, with both it and Samsung just under 40 per cent in the US (the situation is similar in Europe). [1]
Retail constraints. Apple’s brand ethos, customer-friendly browse and try shopping, and reliance on the mobile operators as a distribution channel means it has historically benefited heavily from in-store sales. The Covid-19 (coronavirus) pandemic has resulted in widespread operator retail closures, which means that 35 per cent to 40 per cent of handset sales through the mobile operators will move online, or be delayed until social distancing measures are relaxed. Despite Apple’s own well-established brick-and-mortar retail network, reduced appetite for in-store shopping over the Christmas/holiday sales period could blunt new iPhone sales.
Income pressures. Set against a context of already-lengthening replacement cycles, discretionary income pressures brought on by Covid-triggered reduced work hours or unemployment could further slow purchase volumes beyond an initial wave of keen adopters in the holiday season. Part of this will come down to how a new iPhone is priced. In reviewing the more than 50 5G handset models released so far, the median retail price is just over $800 (Samsung and Huawei generally being at the higher end while Oppo and Vivo are at the lower end). Apple has traditionally released the base model of a given iPhone generation at $1,000, a 25 per cent premium to the prevailing rate, something Apple customers have been happy to pay in the past but may find less space to do so in the current economic environment.

For Apple, the next iPhone marks a crossroads
The iPhone has been the primary driver of Apple’s success as a business and indeed socio-cultural icon over the last ten years. However, smartphone saturation and lengthened replacement cycles in the US and Europe, which have increased from two years on average in the LTE era to three-and-a-half years now, has precipitated a period of reduced sales growth to the point where, in calendar 2019, iPhone revenue declined 6.6 per cent on the prior year and now account for around 45 per cent of Apple’s revenue compared to more than 60 per cent two years ago. This is, of course, before any exacerbating effects from the pandemic.

In this context, the expected 5G handset launch represents not only its next model, but a gateway into Apple’s strategy for the next ten years. Beyond device sales, the strategic imperative for Apple is retaining customers in its content and payments ecosystem, the glue of its business model. For the time being, this strategy rests on a range of media including video streaming, music and gaming (health also plays a role but generally not a monetisable one). The company does not regularly disclose user counts for these services, but we can infer a somewhat tepid level of take-up based on figures released in the past.

Music, for example, reached 60 million customers at the start of 2019, equivalent to a 6 per cent conversion rate of the iPhone base. Apple TV+, its streaming service, is rumoured to have a take-up rate lower still, with a portion of such customers getting it for free.

The 5G model offers the company a chance to take advantage of new technical capabilities in the standard, particularly low latencies. Following the move to bundle many of its services under the Apple One banner, the technology may provide a vehicle for Apple to revive some of its flagging services by including them alongside those which stand to benefit from the new technology, such as Apple Arcade or Apple TV+. With mobile gaming, in particular, touted as one of the key use cases for 5G, Apple is likely hoping its entertainment subscriptions will lure users into the Apple One bundle and lock them into its services ecosystem.

The takeaway point here is that while the new iPhone is likely to follow past iterations of incremental technical advances, 5G technology offers Apple an opportunity to reset and reorient its longer-term services strategy.

What could it mean for overall 5G adoption?
Size, influence, brand power and heritage all mean that what Apple does matters. This is particularly the case for the mobile operators deploying 5G networks and attempting to sell the merits of higher-value data tariffs on new use cases. In 2011 to 2012, the iPhone was positioned as a flagship handset by many mobile operators keen to capitalise on the newfound ability to stream videos on a mobile phone, something that had not been possible before at any sufficiently good quality. The result was a period of sustained positive revenue growth, with pricing premiums applied for the higher speeds.

The challenge now with 5G is overcoming the perception among consumers that it is just another speed upgrade given LTE is quite able to handle most of the things people currently do on their phones. In this sense, it matters hugely how Apple positions any new services, especially those based on AR or VR, which take advantage of 5G’s unique capabilities given its past precedent for introducing the world to features it did not know it needed. More than any other factor including price, it is this X factor which will determine whether the past halo effect of an Apple launch will spread to the broader handset and operator community.

Stay tuned.

– Tim Hatt – head of research and Jason Reed – lead analyst, Digital Consumer, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/10/GSMAi_iPhone_demand_US_2.jpg