November 15, 2020

The Commonwealth of Independent States (CIS) Region Will Be Home to More Than 50 Million 5G and Add Almost 330 Million New IoT Connections by 2025

Like most regions globally, "The Covid-19 pandemic has had a profound impact on the digital landscape in the Commonwealth of Independent States (CIS) region and around the world," says a report by the GSMA, a UK-based organization representing the interests of mobile operators worldwide. "The social distancing measures put in place to curb the spread of the pandemic have brought to light the value of connectivity for social and economic wellbeing. The pandemic has highlighted the importance of a robust and inclusive digital economy, underpinned by universal access to fast, reliable internet and a range of digital services for individuals and businesses."

Available in English and русский, the Mobile Economy Russia & CIS 2020 report, which is authored by GSMA Intelligence, GSMA's research and consulting arm, explains that "mobile industry in the CIS region has endeavored to keep citizens connected during the pandemic, despite changes in data consumption patterns and the challenges associated with serving prepaid consumers during lockdowns. Operators have engaged with the public and private sectors on initiatives to alleviate the impact of the pandemic on vulnerable groups and the most affected firms. Measures include zero-rated use of educational services and access to government websites, discounted tariffs for healthcare workers, and free access to online conferencing solutions to enable business continuity and support economic recovery."

In addition to the pandemic highlighting the importance of digital connectivity, the report also produced the following findings:
  • 4G became the region's leading mobile technology in 2020 and will account for 65% of total connections by 2025.
  • Smartphone adoption is set to reach 81% by 2025 due to the availability and popularity of lower cost handsets.
  • The mobile ecosystem employed over 830,000 people in the region in 2019 and contributed $14b to public sector funding.
  • The CIS region will add almost 330 million new IoT connections by 2025, with smart home and smart buildings two key growth areas.

While 4G remains a priority in the CIS region, fifth generation technology (5G) will spread in the near future. "Belarus, Kazakhstan and Russia are expected to launch 5G during 2021; networks in the region's other nine markets will be live by 2025," the report explains. The CIS region will be home to more than 50 million 5G connections by 2025, representing an adoption rate of 13%."

What is more, "Despite the economic uncertainty brought about by the pandemic, operators in the region will invest more than $25 billion in infrastructure rollouts between 2020 and 2025, of which 57% will be 5G-specific. Delivering 5G connectivity will increase operators' capital intensity, with initial monetization strategies centered on enhanced mobile broadband (eMBB) and other consumer applications."

With respect to the mobile industry driving economic growth and social development, the report says that "Over the coming years, 5G technologies will drive further contributions to the CIS economy, impacting key sectors such as manufacturing, utilities and professional & financial services."

Furthermore, "Beyond economic impacts, operators are making significant contributions to the welfare of society more broadly. Continued investments in networks are helping bridge the digital divide and drive inclusion across the region. The mobile industry is contributing to progress with the UN's Sustainable Development Goals (SDGs). This includes providing access to life-enhancing educational tools and platforms, delivering the infrastructure to build sustainable smart cities, and supporting efforts to combat climate change."

As for policies to support the region's expanding digital economy, "Access to digital services and technologies has been crucial to keep economies active and mitigate the harms caused by Covid-19. Post pandemic, these same factors will be vital to reinvigorate the CIS economy and rebuild businesses and communities. The rollout of mobile broadband can help spur socioeconomic growth and transform traditional industries. It is therefore more important than ever that governments and regulators implement policies to drive investment in resilient digital infrastructure, enhance access to connectivity and encourage adoption."

The report adds that "5G offers the potential to underpin a range of enterprise and consumer applications. However, uncertainty around spectrum access and returns on investment can be significant barriers to releasing value into the digital economy. A comprehensive national 5G development plan accompanied by the effective management of spectrum resources are key to maximizing the opportunities that next-generation mobile connectivity can bring to the region."

Lastly, "Policymakers must also revise the outdated electromagnetic emission rules that could hinder cost-efficient 5G deployments, as well as rethink fiscal policy to strike the right balance between tax revenue generation and operator investment."

Infographic: GSMA Intelligence

Through my experience working in the CIS region, I have witnessed how mobile technology, starting with feature phones operating on 2G networks, benefited millions of people as information flowed to high density urban areas and the sparsely populated countryside alike. Significant geopolitical challenges exist in many of the region's countries, but I remain optimistic that governments, nongovernmental organizations and the private sector will continue to coordinate on policy reform and allocate investments to modernize the region's mobile infrastructure and increase research and development. Such actions will bring value-added services to the projected 244 million unique mobile subscribers in 2025.

What are your thoughts about the report's findings? Do you see opportunities to develop hardware or applications for enterprises or consumers in the CIS region?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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