5G reality check: the expected and unexpected

One year into the new world of 5G, network rollouts are gathering pace. But is the next generation of mobile technology delivering on expectations? In this report, we provide a progress check on the state of 5G, covering rollouts, consumer adoption, network performance, new services and financial performance.

We have increased our network rollout forecast to 61 markets by the end of 2020, chiefly due to 5G launches from all three of China’s operators. Our long-term outlook is that 5G will account for 20% of the global mobile base by 2025.

Early 5G network tests on download speeds are promising, with average speeds around four times higher than 4G speeds. However, current 5G networks are non-standalone, meaning the RAN is 5G but with a 4G core. The user experience can be radically different when the connection is tethered to an LTE cell site, with some tests finding 5G connections that are slower than 4G.

A number of key 5G use cases are reliant on low latency (i.e. below 10 ms), which will require standalone networks. Our research has found that 70% of operators are planning to deploy SA 5G within three years. Meanwhile, spectrum allocation for 5G is accelerating, but operators should also consider other technologies, such as carrier aggregation and dynamic spectrum sharing, to maximise resources.

In terms of pricing and revenue, consumers have indicated a willingness to pay 10–20% extra for 5G services, while our analysis based on 4G revenues and our consumer survey suggests an average mobile service revenue boost of 1.6% within the next two years. But this will not be enough to cover the costs of 5G network rollouts, while any sustained price rise will depend on widespread adoption of 5G’s “killer apps” such as gaming and VR/AR.