December 2, 2020

5G Will Enable a New Era of Connectivity in North America, Resulting in an Unprecedented Demand for Data and Digital Services

According to a report published by the GSMA, a UK-based organization representing the interests of mobile operators worldwide, "5G is poised to enable a new era of connectivity, bringing new services and increased efficiency across industries. Operators in North America continue to be among the world leaders when it comes to 5G deployment. This can be seen by the rollout of nationwide 5G in the US, enabled by spectrum refarming and dynamic spectrum sharing (DSS). Operators in the region are also advancing with standalone 5G deployments, which will be key to bringing many of the enhanced, latency-sensitive 5G use cases to market."

Titled The Mobile Economy North America 2020, the report, which is authored by GSMA Intelligence, GSMA's research and consulting arm, further explains that "[a]lthough the rate of 5G adoption was lower than initially expected in the first half of 2020 because of the pandemic, this is likely to be a blip. North America will reach 100 million 5G connections in 2022, driven by continued network investments from operators and the expanding range of 5G smartphones at varying price points. By 2025, North America will have become the first region where 5G accounts for more than 50% of total connections."

On the topic of the mobile industry driving social impact and contributing to economic growth, the report encouragingly says: "The mobile industry has engaged with businesses and governments on initiatives to alleviate the impact of the Covid-19 pandemic. Mobile operators and other industry players have supported the most vulnerable in society during the pandemic while also contributing to economic recovery efforts e.g. by providing increased data allowances for customers and giving free equipment to schools and students."

What is more, "Mobile technologies and services generated 4.8% of GDP in North America in 2019, a contribution that amounted to over $1 trillion of economic value added. In the same year, the mobile ecosystem also supported more than 2 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with almost $100 billion raised through taxation."

Other key highlights from the report include:
  • The report asserts that a thirst for streaming content, new digital services, and the rollout of 5G networks will fuel an exponential increase in data consumption;
  • Alongside 5G rollouts, operators are also pursuing ambitious network transformation strategies;
  • The level of operator capex investment will reach $337bn for the period 2019–2025; and
  • Operator revenues will grow to $294bn by 2025.

Regarding connected devices (IoT), GSMA Intelligence points out that "[w]hile around two in three US companies claim to have deployed an IoT solution, the coverage needs of these companies vary significantly depending on factors such as sector, mobility needs and type of application. More than half of the companies surveyed require national coverage; there is also significant demand for location-specific coverage, highlighting the opportunity for private networks in enterprise connectivity."

Moreover, "For co-investment in private networks in North America, operators see the most suitable targets as financial services (potentially because of high-frequency trading), healthcare and manufacturing. 5G will be an important enabler here – for instance, as part of the move towards automated production lines with more sophisticated tracking and monitoring in the manufacturing sector."

And with respect to healthcare, the report importantly notes:
More than half of mobile users in Canada and the US use mobile to monitor or improve their health. This is done mainly through health-focused mobile apps on smartphones, which provide basic functions such as step counters and activity trackers. However, there is also scope to increase the usage of more sophisticated mobile health solutions, such as virtual care consultations, which allow individuals to contact health practitioners through voice, SMS and video services. These have become increasingly important, as health systems have been overwhelmed by Covid-19, which has made in-person consultations difficult. Operators in North America play a myriad of roles in enabling virtual consultations. This includes providing connectivity and equipment to both practitioners and patients, and developing novel solutions, such as the Babylon by Telus Health service. These efforts help to address systemic challenges in healthcare services, improving social outcomes for governments and their citizens. 

As 5G enables a new era of connectivity in North America, what business opportunities are you seeing that will bring new services and increased efficiency across the region's industries?

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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