Contractors working on a cell tower to update it to handle 5G in APAC

Contractors working on a cell tower to update it to handle 5G. Source: AFP

APAC telcos to spur economic recovery with $331B spend on 5G

  • Mobile carriers in APAC are planning hefty investments in 5G over the next 5 years, new data from GSMA shows
  • Enhanced network coverage will see an additional 663 million people from low-to-mid-income backgrounds become mobile internet users, widening their economic potential via mobile-based tools & solutions

Prior to the outbreak of COVID-19 across the Asia Pacific (APAC) region, most analysts were forecasting a gradual but solid growth to world trade in 2020, with estimates in January 2020 still slating the world economy to grow by 2.5% this year– roughly the same growth rate as 2019, but set to gradually accelerate throughout 2020.

But the promising start to the year was soon undermined by the rapid spread of the pandemic, causing major economic turmoil by disrupting supply chains, denting the confidence of financial markets, and restricting the movements of people, goods, and trade.

Governments across the world were forced to erect a range of measures to contain the spread of infection, with the APAC region one of the hardest hit, although there is hardly any place which is not feeling the impacts of the coronavirus spread in some form or another.

In the wireless telecommunications sector, 2020 was supposed to be the year of 5G in APAC, with mobile carriers in multiple countries planning 5G spectrum auctions and rolling out 5G base stations and network infrastructure. With COVID-19 related restrictions easing around the region, mobile operators are looking to kickstart 5G deployments again.

The latest Asia Pacific report in mobility industry observer GSMA’s Mobile Economy series indicates that signs of recovery are underway in the sector, with APAC telcos looking to invest over US$400 billion on their networks between now and 2025. Of that amount, nearly two-thirds at US$331 billion is being allocated for 5G rollouts.

“Operators in the region are investing billions in continuing deployment of 5G networks that are enabling an exciting variety of new services for consumers. This is also helping transform industry and manufacturing, and driving economic growth – which is of critical importance at this time,” noted Julian Gorman, GSMA’s Head of APAC.

5G becomes a reality

GSMA found that there were 2.8 billion mobile subscribers in APAC at the end of 2019, around 66% of the region’s population. Nearly 500 million subscribers have been added since 2014, making APAC one of the fastest-growing regions with more than half of the world’s total mobile subscriber base.

At this rate, 266 million new subscribers will be connected across the region within the next five years, and over half of the new mobile subscribers in the world will be from the APAC region. Furthermore, the extension of mobile services into more rural parts of APAC should see over 600 million new mobile internet users by 2025, making the internet accessible to at least 61% of the APAC population for the first time.

This boost in connectivity will enable low- to middle-income users in the area to make use of mobile-based tools and solutions for a variety of local industries, from agriculture to education and healthcare, which can empower locals and drive economic sustainability.

GSMA’s Julian Gorman added, “Mobile connectivity provides a positive impact on productivity and boosts GDP, and across the region, there is a need for a ‘whole of government’ approach with clear digital strategies to transform economies. As 5G becomes a reality, we call on governments and regulators to actively support a favorable business environment to encourage investment and allow operators to extend next-generation digital services to all Asia’s citizens and speed financial recovery.”

COVID-19 has had a more tangible impact on 5G in APAC due to the region already featuring some of most advanced 5G network deployments in the world, with South Korea, China, and Australia among the countries with nationwide 5G deployments in progress. In comparison, many other markets had yet to launch a full-fledged 5G network, so their 5G introduction is more pushed back rather than adversely affected by short-term delays.

“The COVID-19 pandemic has highlighted the importance of a robust digital economy to cushion the economic and industrial shock of control measures,” explained Gorman. “Emerging economies need to do more to stimulate and evolve the digital ecosystem, including accelerated smartphone penetration and mobile broadband adoption to prepare the foundations for an inclusive 5G future.”

Government administrations around Asia are making 5G one of the cornerstones of their national digital transformation plans. “Digitization, which was already an important target, is, therefore, moving up the agenda for businesses and governments alike, with many now accelerating their timelines,” noted Gorman.