Omdia: Growth of 4G over 5G in 2022 raises concern for 5G evolution

Multiple factors have slowed down the transition to 5G such as lower handset sales driven by cost-of-living crisis and inflation, poor network coverage, low performance gain perception, and lack of 5G specific applications. Furthermore, an increasing portion of mobile connections – approximately 30% – are not handsets and will be slower to convert to 5G (e.g., IoT, connected tablets/laptops, wearables).

Omdia Senior Market Forecaster, Garinder Shankrowalia, said: "5G subscription reporting in 2022 has led us to reduce our 2023 forecast by 7.2% -approximately 150 million subscriptions. We anticipate the industry will regain this loss from 2025, once global market conditions are improved."

Omdia believes it is important for mobile operators to continue investing in next generation mobile networks to enable the application emergence and the overall digital economy to grow. However, having multiple cellular technologies running concurrently on mobile networks is having an adverse effect on operators whereby launching 5G increases complexity and cost for little return in the short term.

Omdia Research Director Ronan de Renesse said: "There needs to be a 'net-zero' approach to network development, removing the old as the new gets deployed.  Operators are already starting to move capital from next generation network deployment to 3G decommission projects and digital transformation.  Key stakeholders should remain realistic about the prospects for 5G and re-evaluate the business case before moving on to the next step."

Omdia forecasts 5G will account for 5.9 billion subscriptions in 2027 equivalent to a population penetration of 70.9%.

Ronan de Renesse will be speaking at high-profile telecoms events this year including MWC and Network X.

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