5G: continuous evolution leads to quantum shift

Nipun Jaiswal / Analysys Mason
18 Nov 2014

Mobile technology generations evolve and increment approximately every decade. The first generation of analog cellular telephony networks gave way to 2G in the 1990s, 3G in the 2000s and now 4G from 2010 onwards. The next shift will be to 5G from 2020 onwards.

As each technology generation changes so does the consumer behavior around mobile services. Core mobile services have evolved from voice/SMS in 2G, to voice/SMS/mobile data in 3G, to mobile broadband data in the 4G age. It’s a continuous evolution of the entire ecosystem: technologies, networks, services and consumers.

While mobile operators implement, commercialize and monetize their 4G networks and services, global research initiatives and standardization bodies are envisioning and developing new technologies for 5G. Progress on 5G research and development is positive and promising. Figure 1 shows a detailed timeline towards 5G development, standardization and eventual commercialization.

Multiple stakeholders influence 5G development, including MNOs, governments, equipment vendors, standards bodies, and research institutions. Global initiatives now pioneering 5G development efforts include IMT-2020 (China), 5G Forum (South Korea), ARIB 2020 and Beyond AdHoc (Japan), METIS 2020 and 5G PPP (European Union) and 5GIC (UK).

In regional terms, Asia-Pacific and the European Union are leading efforts to define and develop 5G technology. US initiatives are primarily public/private partnerships with university-based researchers. 5G trials are expected to begin around 2018 followed by commercial deployments from 2020 onwards.

5G drivers

The top-three drivers for 5G are the same as those for 4G: growth in mobile traffic, M2M device connections, and smartphone take-up.

Analysys Mason forecasts indicate that the CAGR of mobile data volume will be 42.5% worldwide for 2014-2019. Growth will be driven by increasing basic Internet connectivity in emerging markets and complementary connectivity in developed markets. By 2019, 13% of SIM-enabled devices will be 4G and will generate 79% of mobile data traffic.

This highlights the correlation between proliferation of mobile data traffic and succession of a technology generation (4G vs 3G/2G). Analysys Mason expects data traffic growth to remain a strong driver for 5G.

In terms of M2M, there were 300 million M2M device connections worldwide at the end of 2013 according to Analysys Mason. We forecast this number to increase to 3.2 billion by 2024, representing a CAGR of 28% during the 10-year forecast period.

In terms of smartphone adoption, Analysys Mason research shows that the number of smartphone connections is set to grow 136% from 2014-2018 to reach 3.9 billion connections worldwide in 2018.

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