Smartphone upgrades to determine speed of 5G rollout, say analysts

Analysys Mason, a specialist telecoms, media and technology consulting and research firm, has released its annual industry predictions on the major trends in 2022. The predictions include the effect of chip shortages on 5G connection numbers, the potential of the metaverse to bring assisted reality (AR) and virtual reality (VR) to the masses, as well as telecoms gaming strategies and connected home and network investment.

According to the firm, 5G connection numbers will be determined by consumer upgrades to 5G handsets rather than just 5G network deployments. However, chip shortages will affect this situation in 2022. Analysys Mason believes that operators will continue the push for more 5G coverage and more networks will be launched but subscriber numbers will largely be determined by the pace of consumers acquiring 5G handsets. Reduced 5G handset shipments in the latter half of 2021 and first half of 2022 will result in 105 million fewer 5G handsets in use in 2022 than previously forecast.

Unlike previous generations of mobile networking, 5G will develop on two distinct tracks. Operators that are determined to offer new types of B2B and B2B2C services will press on with 5G standalone (SA) technology and will depend on cloud partnerships to make this work. Other mobile operators will stay with 5G non-standalone (NSA) technology and a business that is tied to consumer services.

The metaverse will help bring AR and VR services to the mass market. The hype around the metaverse will continue in 2022 with different kinds of social/gaming/entertainment/commerce competing for attention.

A major question for telecoms operators is the degree to which AR and mobility will feature, rather than the VR-heavy vision presented by Meta (formerly known as Facebook). Many fixed broadband operators will launch connected home offerings in association with services that are built on home wifi connectivity.

When faced with competition from tech giants, smart home automation services and smart speaker offerings have struggled, but the connected home is a promising area for operators.

The firm says that early trailblazers of the “customer premises equipment (CPE) as app store” approach, such as Comcast, show that operators have an opportunity in this segment. Operators will launch value-added services such as connected home cyber security and wifi motion detection with the objective of boosting subscriber numbers and ARPU.

Business services and Internet of Things private networks will continue to increase in number, and most of the new networks will be 5G, but the adoption of edge computing will lag behind. At least 75 per cent of new private networks in 2022 will be 5G, up from 31 per cent at the end of 2020.

Many pilots and trials of new 5G-related business services will be announced in 2022, but few services will be launched commercially. The features of 5G are well understood and, especially with the introduction of standalone networks, operators will have more capabilities to offer enterprises (for example, low-latency services, service-level guarantees).

Much more thinking is needed on how to price and package these services though, says Analysis Mason.