The future looks bright for 5G across the world, but particularly in North America, which is poised to generate record revenues for service providers for the foreseeable future. That’s the key takeaway from a just-published report by mobile industry group GSMA, which forecasts dramatic growth in mobile data use through 2025, when nearly half of all cellular connections will be using the new, high-speed standard.
According to GSMA Intelligence, 5G’s growth across North America won’t be spread evenly across countries, but it also won’t be held back by a lack of population coverage. Today’s report suggests that 5G will reach 80% population coverage by 2021, but actual user connections will take until 2024 or 2025 to make substantial use of that service availability. The United States is expected to see the fastest 5G growth, lagged slightly by Canada, while the Caribbean will likely still have little to no 5G penetration by 2025.
Though 5G adoption currently appears to be somewhat evenly spread across the United States, Asia, and Europe, with South Korea holding an especially strong position, 5G connections will likely begin hockey stick-style growth in both the U.S. and Canada in 2020, overtaking leading Asian nations in total customers by 2021 or 2022. Europe will have markedly fallen behind the pack by 2021, GSMA predicts, and will remain behind the others for years.
One of the key reasons for 5G’s expected strength in North America is increasing demand for mobile services, combined with consumer willingness to pay for them — a factor that has motivated carriers to invest in 5G hardware. In 2019, 5G network build-outs will be responsible for more than half of carriers’ capital expenditures, reaching 87% of spending by 2025.
The GSMA notes that U.S. and Canadian carriers have seen increased customer migration to higher priced but higher value unlimited data plans, along with an uptick in data traffic. By 2025, customers are expected to use an average of 55.6GB of mobile data per month, up from 10GB per month in 2018, a nearly 5.6 times increase. Additionally, mobile carriers are using 5G to enter the home broadband market, which should further expand demand going forward.
Beyond consumer services, industrial use of 5G will become huge over the next 15 years, contributing an estimated $657 billion to the North American economy. Professional and financial services will account for 38% of that figure, with information and communications technology (ICT) at 22%, and manufacturing and utilities at 19%. Public services will represent 15% of the number, with agriculture and mining at 5% — a surprisingly low estimate given the impact 5G is expected to have on monitoring and automation in these sectors.
Unsurprisingly, the GSMA suggests that the next major step for North America is to expand availability of mid-band radio spectrum for 5G, including the 2.5GHz, 3.5GHz, and 3.7-4.2GHz frequency bands identified in the U.S. FCC’s 5G FAST Plan. But incumbent users may continue to impede re-provisioning of these frequencies for mobile use, and carriers may only be able to acquire small blocks of mid-band spectrum.
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