China announced it has started commercial 5G deployment nationwide. The country is set to become the largest provider of 5G subscriptions by next year, according to new forecasts from ABI Research.
5G is growing much faster than anticipated and is set to overtake 4G LTE connections by 2025, the research firm said, reflecting about 3 billion 5G connections with 4G declining to 2.2 billion by the same year. According to ABI, there will be 12 million 5G connections worldwide by the end of this year, accelerating to 205 million by the end of 2020.
“Despite the challenges faced by early adopters and the relatively high prices of 5G-capable smartphones in 2019, ABI Research expects 5G to reach the mass market mid-2020, by which time China will start to dominate in terms of connections, and as a result, market interest and technology expertise,” said Dimitris Mavrakis, research director at ABI Research. “The infrastructure value chain is maturing, handset vendors are manufacturing mid-tier 5G handsets, and consumers are now discovering higher speeds, better user experiences, and new services, including Cloud Gaming and AR/VR applications. All of these will contribute to the explosion of consumer 5G in 2020.”
ABI said China has 5G deployed in 50 cities even before the official launch. Chinese operators expect to have 143 million subscribers at the end of 2020, representing 70% of total connections worldwide. By contrast, U.S. operators will reach about 28 million subscribers by the end of next year and by 2025 China will amass 1.1 billion 5G subscribers with the U.S. at 318 million.
“Globally, ABI Research expects mobile service providers to spend nearly $1.2 trillion in the next 5 years to build out their networks and will generate nearly $6.2 trillion in service revenues from the consumer market alone,” Mavrakis said. “Although most mobile 5G subscribers will be in China, mobile service provider revenues will still be higher in the United States in 2025, mainly driven by higher subscription prices.”
So far, 485,000 5G smartphones shipped to China in the third quarter. Vivo, a mid-range domestic vendor, accounted for 54.3% with Samsung coming in second with 29% of the market followed by Huawei and Xiaomi.
