Ericsson expects 190m 5G users by year end despite sluggish Europe and North America

ericsson-mobility-june-2020.png
Image: Ericsson

Ericsson has increased its estimate for the number of global 5G users by the end of 2020, from 13 million to 190 million in its latest instalment of the Ericsson Mobility Report.

The report said the boost occurred despite estimates in Europe and North America being lowered due to the impact of the coronavirus pandemic and flow-on effects, such as nations delaying spectrum auctions, with China experiencing a surge in its 5G uptake. 

By the end of 2025, the telco equipment vendor now expects 2.8 billion 5G subscriptions — a slight increase on the 2.6 billion figure from November — which would account for 30% of all mobile services.

“LTE will remain the dominant mobile access technology by subscription during the forecast period,” the report said.

“It is projected to peak in 2022 at 5.1 billion subscriptions and decline to around 4.4 billion subscriptions by the end of 2025 as more subscribers migrate to 5G.”

Ericsson said it had adjusted its forecast for how long GSM and EDGE-only 2G services would linger, thanks to a slowing decline in India.

Breaking its 5G numbers in 2025 by region, 74% of North American services are expected to be on 5G, followed by 60% in North East Asia, 55% in Western Europe, 27% of services in Central and Eastern Europe are forecast to be 5G, 21% of services in South East Asia and Oceania are predicted to be 5G, with India on 18%. Behind India is Latin America on 13%, Middle East and North Africa on 9%, and Sub-Saharan Africa on 3%.

The report said consumers would begin to see “performance-optimised” 5G devices in 2021 that would improve power consumption and allow 5G to penetrate into the low and mid tiers of the smartphone market.

Ericsson said it expects the number of voice over LTE (VoLTE) services to more than double from 3 billion worldwide at the end of 2020 to 6.4 billion in 2025, mostly off the back of 2G and 3G network shutdowns forcing carriers to adopt the technology.

The company is predicting mobile data volumes to grow by 31% annually, with video increasing from 63% of the 33EB transferred each month in 2019 to 76% of the 164EB predicted each month for 2025. In 2025, Ericsson said it expects 45% of traffic will be carried over a 5G network.

By 2025, the report said India would have 410 million more smartphone users, and with an average data use of 25GB per month, the country would transfer 21EB of data each month.

In terms of network coverage, Ericsson said 4G coverage would increase by 10 percentage points from 2019 to 90% global population coverage by 2025, while over the same time period, 5G would increase from 5% to a range of between 55% to 65%.

Last week, Ericsson announced it had won 5G contracts in China, having signed agreements with all three of the nation’s major telcos — China Unicom, China Telecom, and China Mobile — but it did not provide details of the deals.

At the same time, the company also said it would experience a hit of around 1 billion Swedish krona during the second quarter from asset write-downs of pre-commercial product inventory for the Chinese market.

In its first quarter results released in April, Ericsson reported 5G was driving its network equipment sales, with the segment reporting 35 billion krona in revenue, up 5%, and almost 6 billion krona in earnings before interest, tax, and amortisation (EBITA), up from the 5.5 billion reported for the first quarter last year.

Overall, the company had net sales of 49 billion krona in net sales, up 2%; operating income of 4.6 billion krona, down 10%; and EBITA of 4.63 billion, down on the 5.2 billion for the same period last year.

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