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Mobile penetration approaching saturation point in most markets around the world – report

19th May 2023

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The latest GSMA ‘Mobile Economy 2023’ report reveals that the number of unique mobile subscribers will reach 6.3-billion by 2030, up from the more than 5.4-billion people globally that subscribed to a mobile service in 2022.

According to the report, mobile penetration is approaching saturation in most markets around the world, particularly among adult and urban populations in developed regions.

The majority of new subscribers in every region will be young consumers and rural dwellers, the report points out.

With developed regions reaching saturation, this left room for growth in many large, underpenetrated markets in developing regions, with the report citing examples of India and sub-Saharan Africa accounting for about half of new mobile subscribers globally over the 2022 to 2030 period.

By 2022, there were 4.4-billion mobile Internet users globally, as more people around the world relied on the Internet for many daily activities, especially in the wake of the Covid-19 pandemic.

This is expected to grow to 5.5-billion by the end of this decade.

However, the mobile Internet use gap, despite narrowing from 50% in 2017 to 41% in 2022 on average, remains significant and demands urgent attention from all stakeholders.

“The use gap is widest in sub-Saharan Africa, at 60%, which highlights the impact of the barriers to mobile Internet adoption, including lack of affordability and low levels of digital skills,” the report points out, noting that the use gap is smallest in Europe, at 14%, and North America, at 16%.

Meanwhile, mobile technologies and services generated 5% of global gross domestic product in 2022, adding $5.2-trillion of economic value and supporting 28-million jobs across the wider mobile ecosystem.

Mobile’s contribution will reach $5.6-trillion by 2025 and, by 2030, will exceed $6-trillion, as countries around the world increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services.

During 2022, the mobile sector also made a significant contribution to the funding of the public sector, with about $530-billion raised through taxes on the sector, including services VAT, sales taxes and excise duties, which generated $210-billion, followed by employment taxes and social security, which generated $160-billion.

“Fifth-generation (5G) is expected to benefit the global economy by more than $950- billion in 2030, or more than 15% of the overall economic impact of mobile. Much of this will materialise in developed regions, including East Asia and the Pacific, North America and Europe, which are expected to see strong growth in the next five years.”

Meanwhile, the number of connections on legacy networks, such as second-generation (2G) and third-generation (3G), will continue to decline over the next few year as users migrate to fourth-generation (4G) and 5G, resulting in more network shutdowns.

To date, operators have announced plans to shut down 96 2G networks and 107 3G networks around the world.

The report also shows that, between 2023 and 2030, operators will spend $1.5-trillion on their mobile networks.

“Following extensive 5G network buildout in the last few years, which resulted in record capital expenditure (capex) intensity in some markets, overall capex will begin to trend downwards in the coming years as operators turn their focus to generating returns on their investment,” the report says.

“This trend will not be uniform across all markets. In emerging 5G markets, capex will continue to accelerate over the forecast period on 5G network roll-out. Overall, 92% of operators’ capex between 2023 and 2030 will be spent on 5G network deployment.”

In 2029, 5G will overtake 4G to become the dominant mobile technology, as 5G adoption continues to rise, owing to new network deployments and cheaper devices.

According to the report, as of January 2023, there were 229 commercial 5G networks around the world and over 700 5G smartphone models launched, including more than 200 in 2022.

Throughout 2023, about 30 new markets, many of these developing markets across Africa and Asia, will launch 5G services, with 5G adoption expected to reach 17% globally, rising to 54% – equating to 5.3-billion connections – by 2030, when 5G adoption surpasses 50% and 4G adoption falls below 40%.

In the top 5G markets, led by the Gulf Cooperation Council States, developed Asia Pacific and North America, 5G adoption will be over 85% by 2030.

In sub-Saharan Africa, 5G roll-out will likely take a phased approach, as opposed to the fast population coverage approach that has been adopted in more advanced markets, the report continues.

Further, by 2030, there will be nine-billion smartphone connections, equivalent to 92% of total connections, with emerging markets in Asia-Pacific, Latin America and sub- Saharan Africa experiencing the largest increase in smartphone adoption, from 76%, 79% and 51% in 2022 to 94%, 93% and 87% respectively, boosted by increasing affordability.

Globally, smartphone data traffic will rise more than threefold in the period to 2028, with the biggest users in North America and North-east Asia.

Meanwhile, the GSMA ‘Mobile Economy 2023’ report forecasts that licensed cellular Internet of Things (IoT) connections will double to 5.3-billion by 2030, with Greater China accounting for two thirds.

In 2023 and beyond, IoT will continue to grow, with “new flavours” of IoT emerging, including passive or ambient IoT, which refers to IoT sensors that are smaller and cheaper, compared with previous generations of IoT such as narrow band-IoT and long-term evolution-machine, and are powered by radio waves, solar, wind, vibrations and heat.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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