October 19, 2019

Driven by Smart Cities and Smart Utilities, Industrial IoT Connections in the Commonwealth of Independent States Will See Strong Growth

"At the end of 2018, the Commonwealth of Independent States (CIS) was home to 235 million unique mobile subscribers, of which Russia, Ukraine and Uzbekistan together accounted for 80%," explains a report published by the GSMA. The CIS (Armenia, Azerbaijan, Belarus, Georgia, Moldova, Kazakhstan Kyrgyzstan, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan) "has a high rate of unique mobile subscriber penetration at 81%, though country-level figures range from 60% in Turkmenistan to almost 90% in Russia. As saturation of the region's addressable market edges closer, future growth will be limited, with less than 9 million new unique subscribers forecast by 2025."

Authored by GSMA Intelligence, the research arm of the GSMA, Mobile Economy: Russia & CIS 2019 adds that "the CIS is now seeing an accelerating shift to mobile broadband. 4G will overtake 2G as a proportion of connections in 2019," excluding licensed cellular Internet of Things (IoT), "and will become the region's leading mobile technology in 2021."

Moreover, "Greater use of data-intensive services and demand for higher speeds will drive further adoption, with 4G accounting for more than two-thirds of total connections by 2025. Only Belarus and Russia are expected to launch 5G by the end of 2020; networks in the region's other 10 markets will be live by 2025. The CIS will be home to around 54 million 5G connections by 2025, representing an adoption rate of 13%."

Source: GSMA Intelligence

On the topic of the mobile industry's significant contributions to jobs and the economy, "In 2018, mobile technologies and services generated 4.7% of GDP in the CIS, a contribution of $101 billion of economic value added. In the period to 2023, this figure will increase to $122 billion (5.1% of GDP). The mobile ecosystem supported 620,000 jobs in the CIS in 2018, either through direct employment or indirectly through activity in the wider economy. Mobile also contributes to the funding of the public sector, raising $12 billion in 2018 – mainly via general taxation. 5G technologies are expected to contribute $34 billion to the CIS economy over the next 15 years, impacting key sectors such as manufacturing, utilities and construction."

Regarding regional innovation being underpinned by mobile connectivity, the report points out that IoT "is an area where mobile operators can grow their business beyond traditional communications. Industrial IoT connections in the CIS will see strong growth out to 2025, driven by increased interest in smart cities and smart utilities. With IoT revenue set to reach $26 billion in 2025, operators are implementing strategies designed to capture opportunities at the applications, platforms and services layer."

Source: GSMA Intelligence

The GSMA further says "operators are seeking to invest or formalize partnerships in the e-commerce market, particularly as smartphone and mobile broadband adoption rates grow. The industry is also exploring potential applications of, and devising solutions based on, artificial intelligence (AI) and blockchain technologies, and injecting greater funds in the start-up ecosystem to protect itself from disruption and diversify revenues."

I concur that "5G mobile networks offer the potential to underpin a range of solutions for enterprises, in addition to serving the consumer market." I also agree that "[p]olicymakers should consider the rollout of 5G a vehicle for driving socioeconomic growth and the transformation of traditional industries. The regulatory framework should foster the mobile industry's development within an environment that is conducive to investment. Launches of 5G networks in other markets indicate that key factor behind their successful deployment and operation is the creation of a comprehensive national 5G development plan."

Infographic: GSMA Intelligence

What investment or business opportunities are you seeing in the CIS' mobile industry?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

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