Revenues are up in top 20 global 5G markets, Ericsson report says

There is a link between 5G penetration and rising service revenue, claims the latest version of the Ericsson Mobility Report. The June 2023 report found that in the last two years there has been a 3.5% compounded annual growth rate (CAGR), for a total of 7%, in the top 20 global 5G markets based upon the number of 5G subscriptions. 

Ericsson said that while most wireless operators find it difficult to raise prices due to inflation because there is no incentive for consumers to pay more, the top 5G service providers have been able to proactively shift to higher priced wireless rate plans by demonstrating the added value of 5G to consumers.

The Ericsson report notes that only 22% of service providers that offer 5G are actually differentiating the price of 5G service from their 4G offerings.  

According to Peter Linder, Ericsson’s head of 5G marketing for North America, mobile operators are typically moving customers from 4G to 5G by offering incentives bundled into their price plans. “When converting existing customers to 5G, they are typically offering plans that may cost a little more but also offer more value,” he said.

 Here are some examples of incentives mobile operators are offering:

  • Service bundling. The operator bundles in security features, streaming video services or cloud storage into their 5G price plans.
  • Fixed wireless access (FWA). The mobile operator offers a discounted FWA service with an existing mobile plan.
  • Tiered service plans. The wireless operator prices their 5G services in speed tiers rather than as unlimited data plans.

Although North America has a 41% 5G penetration rate, making it the most highly penetrated wireless region in the globe, operators here have so far embraced unlimited 5G data plans for their mobile users rather than speed tiers, except when it comes to FWA.

“FWA is typically where speed tiers are offered in North America,” Linder said. He also noted that operators don’t necessarily have to limit their FWA subscriptions in the U.S. out of concern for capacity issues. “It’s like building a road. If one road gets congested, you add a second lane,” he said. “If an operator is successful with fixed and mobile, they can densify the network to accommodate the traffic growth.”

Globally there are about 100 service providers that are offering FWA over 5G. But North America offers the most speed-based FWA rate plans, with 90% of operators offering these types of plans.  

Ericsson expects FWA connections to grow from 100 million at the end of 2022 to more than 300 million by the end of 2028.  Of those 300 million FWA connections, Ericsson expects 80% will be FWA over 5G.  In addition, Ericsson expects FWA data traffic to represent 30% of all global mobile data traffic in 2028.

5G will steadily grow from 2023-2028

According to the Ericsson report, 5G adoption in North America will grow steadily in 2023 with more than 250 million 5G subscribers by year-end. That number is expected to increase to around 410 million by 2028. At that time, 5G will account for more than 90% of all mobile subscriptions in North America.

Globally, 5G subscriptions are expected to top 1.5 billion by the end of this year.

Not only are 5G subscriber numbers increasing, but so is the amount of wireless data traffic. Currently, the total monthly global mobile network data traffic is around 126 Exabytes (EB), which is nearly double the amount of mobile data traffic reported in Q1 2021. 

Ericsson’s report estimates that the top 10% of users generate about 70% of total network traffic. In North America, users that consume more than 20 GB per month represent about 14% of users, but they generate 80% of total network traffic.