The deployment of 5G technology represents a significant opportunity for mobile operators, but it also brings unprecedented financial challenges. GSMA Intelligence has projected that operator Capex will reach an extraordinary $1.3 trillion between 2024 and 2030 as mobile services across the globe ramp up their 5G rollouts. While these investments aim to capitalize on the growing demand for enhanced connectivity, mobile operator revenue is anticipated to grow progressively from $1.08 trillion in 2024 to $1.25 trillion by 2030. Consequently, operators face an intricate balancing act—managing the vast expenditures required for 5G while also fostering innovative revenue streams to sustain growth.
Rising Subscription Rates and Consumer Demand
Projected Subscriber Growth
As the wave of 5G technology sweeps through the industry, the number of global mobile subscribers is expected to surge from 5.8 billion in 2024 to an impressive 6.5 billion by 2030. This increase in subscribers also correlates with an anticipated rise in internet customers, growing from 4.7 billion to 5.5 billion over the same period. Such growth underscores the burgeoning consumer interest in more robust and higher-speed internet services provided by 5G networks. Interestingly, the Average Revenue Per User (ARPU) is predicted to exhibit the most substantial growth in lower-middle-income countries. With an expected CAGR of 3 percent in these regions, compared to just 1 percent in higher-income nations, there is a clear indication that emerging markets represent lucrative opportunities for operators.
Diversification of Services
In response to these promising yet financially demanding times, mobile operators are increasingly exploring diversification strategies to harness new revenue sources. Over 80 telecom operators across 60 different markets have plans to launch commercial 5G services, showing the broad appeal and commitment to this advanced network technology. Emerging markets like Egypt, which are actively issuing 5G licenses, are particularly noteworthy as they provide fertile ground for rapid 5G adoption. Concurrently, consumer interest in 5G remains robust, especially in technologies that enhance user experiences such as video streaming. By leveraging such add-ons, operators aim to create multiple revenue streams to manage the overarching financial pressures.
The Expansion of 5G Infrastructure
Standalone 5G Networks
A particular focus within the industry’s 5G deployment strategy involves the development and expansion of standalone (SA) 5G networks. More than 50 percent of surveyed operators have identified 5G SA deployments as a top priority. As of December 2024, approximately 60 operators had launched commercial 5G SA services, with the Asia Pacific and Europe being primary regions leading these advancements. SA networks are crucial as they enable more reliable and faster services, devoid of dependency on existing LTE networks. The rollout of such networks denotes the industry’s dedication to providing cutting-edge connectivity solutions aimed at enhancing user experiences.
The Advent of 5G-Advanced
Looking further ahead, the telecommunication industry is embracing the advent of 5G-Advanced, with substantial developments anticipated within two to three years of the relevant standard releases. Notable examples in this regard include Verizon’s improved video calling capabilities for iPhones and China Mobile’s endeavor to augment the spectator experience during the 2024 Shanghai marathon. Dubai’s Du has also been proactive, establishing a 5G-Advanced Commercial Innovation Centre dedicated to exploring novel services and use cases. These initiatives signify operators’ fervent efforts to stay at technology’s forefront, continuously providing value-added services that can justify the immense Capex involved in transitioning to 5G networks.
The Road Ahead for Sustaining Growth
Financial Pressures and Strategic Responses
Operating under the heavy financial strains of Capex, mobile operators are driven to devise strategic responses that ensure sustainable growth. The enormous $1.3 trillion in projected spending highlights the financial magnitude of 5G deployment. Still, it propels operators to seek innovative solutions to not only recover these investments but thrive in a rapidly evolving market. By targeting lower-middle-income countries for ARPU growth and investing in popular consumer add-ons like video streaming, operators can diversify income streams. This diversification is crucial as it mitigates risks associated with heavy reliance on traditional revenue avenues.
Fostering Innovation and Connectivity
The rollout of 5G technology offers a tremendous opportunity for mobile operators, but it also presents significant financial challenges. GSMA Intelligence forecasts that operator capital expenditures (Capex) will escalate to an astonishing $1.3 trillion between 2024 and 2030 as global mobile services accelerate their 5G deployments. These investments are geared toward meeting the rising demand for improved connectivity, but mobile operator revenues are only expected to grow from $1.08 trillion in 2024 to $1.25 trillion by 2030. As a result, operators are confronted with a complex balancing act. They must manage the substantial expenses necessary for 5G infrastructure while also developing innovative revenue streams to ensure continued growth. This intricate scenario requires operators to be strategic in their financial planning, as they need to both enable the technological advancements of 5G and devise ways to generate additional income to support these massive investments.