Weak Phone Market Slows 5G Growth, But Future Remains Bright

  • Lower demand for new mobile phones means a slower transition of subscribers onto 5G networks.
  • The poor macroeconomic outlook will delay some 5G network launches by operators.
  • The outlook is still strong, with global 5G connections rising from 1.2 billion in 2022 to 4.2 billion in 2026.

    A sluggish mobile phone market in 2022 is hitting the transition of telecom subscribers to 5G networks, but total 5G connections worldwide are still expected to grow 86% and reach 1.15 billion at the end of the year. This is according to the latest forecast by technology analyst firm CCS Insight.

    “Macroeconomic weakness is inevitably affecting the sales of new mobile phones this year, with global shipments expected to dip 10% to 1.43 billion units, of which 620 million are expected to be 5G-capable”, explains Marina Koytcheva, Vice President of Forecasting at CCS Insight. This will slow the shift to 5G, but active connections on 5G networks worldwide will still almost double in 2022, not least thanks to investments by network operators to expand 5G coverage in key markets, and some important network launches in emerging markets.

    The global 5G connection count will continue to rise as network operators that have already deployed the technology make efforts to switch customers to 5G. “Migrating customers to the latest networks is crucial for operators as it helps them to upsell new services, improve operational efficiency and foster a more sustainable business,” explains Kester Mann, Director of Consumer and Connectivity at CCS Insight.

    “We expect network operators to continue encouraging phone-makers to bring 5G capabilities to cheaper devices in their ranges, so that more and more 5G-enabled devices are sold”, says Koytcheva. CCS Insight forecasts 5G connections will rise in all regions of the world in the next four years, although 70% of the 4.2 billion 5G connections at the end of 2026 will remain in the advanced markets of the West and Asia–Pacific, and in China. The current macroeconomic uncertainty will play a further role in slightly delaying launches by operators that have not launched 5G yet, especially in more vulnerable emerging markets.

    The big promise of 5G has always been in the role it has to play in the Industry 4.0 environment. However, businesses have been slow to adopt 5G in industrial applications, and by 2026 industrial applications of the Internet of things will account for just 10% of global 5G connections. The rest will be almost entirely mobile phones, although other devices like tablets, laptops and home Internet routers (also known as fixed wireless access) will make modest contributions.

    “5G has not had a smooth ride, with the pandemic hitting equipment and device supply chains, and operators facing challenges recouping the cost of new networks” says Richard Webb, Director of Network and Infrastructure at CCS Insight. But Webb is certain the future remains bright. “More operators are deploying advanced features that raise the performance of 5G networks. This means new opportunities to combine advanced connectivity with technologies such as artificial intelligence, edge computing and analytics. This will create new applications of the technology, as well as new service revenue”, he states.

    The chart below shows CCS Insight’s forecast of 5G connections by region to 2026.

    More details of CCS Insight’s extensive research areas can be found here.

    Notes for editors

    CCS Insight is a leading provider of research about mobile phones and 5G. This forecast is part of a broader suite of research into these areas, including pricing, consumer surveys, regular reports and updates about the latest announcements and events.

    About CCS Insight

    CCS Insight is a global analyst company focussing on current and future trends in technology. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.

    For further information contact:
    Imogen Tait
    Harvard PR
    Tel: + 44 (0) 7384 907535
    E-mail: ccsinsight@harvard.co.uk

    Get in touch

    Our global team of analysts understand what clients need and are ready to provide it.

    We're great to work with. You'll be glad we're on your side.

    You can call us for a quick opinion and we'll respond.

    Subscribe to our blog