and Francesco Rizzato, Sam Fenwick, Hardik Khatri
Mobile telecom networks and service provider businesses have proved incredibly resilient during the last year despite the increased reliance placed upon them. And alongside the operational challenges of meeting demand now, operators have continued to pursue new 5G launches and expand 5G roll outs apace. At the same time, everyone has been making more video calls and looking for more ways to be entertained, or to collaborate, while spending more time remote from their friends and colleagues.
As the year in which everything changed has ended, Opensignal predicts the ongoing impact on the mobile world in 2021 and beyond.
Mobile network capacity will become fluid from 2021 onwards
This year we saw changes in the locations and nature of mobile usage across many countries including – India, Indonesia, Italy and Malaysia — due to the pandemic. We also saw changes in mobile data consumption levels. As lockdowns ease, operators will look at how to manage capacity more dynamically, for example between downtown areas and residential suburbs, and be more nimble to future changes in the pattern of mobile usage. We will see greater thought on where to build mobile base stations. The business case for building ultra dense 5G networks with small cells in city centers will be re-evaluated if people may spend less time in the future than they had before 2020. New 5G cloud core network techniques will be adopted to maximize flexibility.
Post COVID, operators will turn to group video calling to market 5G
Opensignal predicts that 5G operators will use group video communication to accelerate 5G uptake and will market the benefits of the additional mobile capacity that 5G brings. Mobile video chat existed before COVID, but the experience of 2020 has pushed group video communication into the mainstream. With more video participants, there is greater pressure on the capacity of the mobile network, more data traffic and a more demanding experience. Already, in 2020, Apple made 4K Facetime a feature that requires a 5G connection and is incompatible with 4G. We are now analyzing how mobile connectivity impacts the group video calling. Countries range widely in the quality of their group video calling experience, but 5G helps. Users in Australia, Canada, Taiwan and South Korea have all seen big improvements in their group video calling experience when using 5G.
Poor experiences will trigger churn, causing users to change operators in 2021, not price
Even in a difficult economy, Opensignal’s churn analysis in Italy has shown that price alone does not explain churn. Instead, weak mobile experience is more important, even more so with so many people having relied more on telecom services this year. In 2021, Opensignal predicts that mobile experience will be the most important catalyst for smartphone users to decide if they want to change mobile operators.
5G will trigger improvements to mobile video streaming quality, increasing data usage
Opensignal predicts that mobile data consumption will surge driven by 5G mobile users continuing to stream video but now at higher resolutions that use more data. We see early signs of higher 5G data consumption with users in Australia, Germany, Japan, Saudi Arabia, the UK, and the U.S. all consuming more data on 5G than on 4G. Our analysis showed that, by enjoying on average a better mobile experience compared to 4G users, 5G users consumed more content on their smartphones at a higher quality. On average, they used up to 2.7x more mobile data compared to 4G users. Mobile video services on more congested 4G networks would only be able to stream lower-quality video with more compression and at a lower resolution. When we examined 100 countries, we found big differences in Video Experience.
Operators in the Americas & Europe will copy their Asian peers, and use mobile gaming experience to acquire customers
Mobile gaming was already hot at the start of 2020 and mobile gaming is still growing fast. It was one of the few sectors to profit from the COVID-19 pandemic with increased entertainment usage. Operators have become increasingly active in the fast-growing field of Esports, especially in Asian countries like Indonesia, Malaysia and South Korea. The promise of lower latencies, edge computing, and 5G will entice more operators to market the multiplayer gaming experience and cloud gaming offers, encouraged by vendors. To date, we see a wide variation in the mobile gaming experience, indicating there is room for 5G to help gamers to win more.
In existing 5G countries, 5G will become the default experience for new customers
When 5G first launched, consumers often had to pay extra for 5G or opt in to 5G service. And, because early 5G smartphones were exclusively top-tier flagship devices, many consumers chose to opt for cheaper 4G-only hardware. In 2021, Opensignal expects 5G will be supported by almost all mid-range smartphone models, enabling 5G operators to make 5G a standard part of the mobile experience for new customers. 5G is already typically 5-6 times faster than 4G transforming the default mobile experience for users. And, with more new 5G spectrum coming online in many countries, the experience gap between 5G and 4G should widen as operators expand their 5G rollout beyond an initial launch.
The 4G experience improves markedly on the eve of new 5G launches, risking confusion
Globally, there are many operators still to launch 5G that will unveil their fifth generation service during 2021. Opensignal predicts that these upcoming 5G operators will invest in network infrastructure that is shared by 5G and older mobile technologies, such as improved cell base station backhaul, ahead of 5G launches. This better onward connectivity will boost the experience for 4G users too. We have seen tremendous improvements on 4G in many countries in 2020, such as in the Philippines. This will make the difference between the initial 5G experience, and the 4G experience, seem narrower. There are signs of such 5G cynicism in the U.S. but Opensignal’s latest analysis of five cities shows a much faster 5G U.S. experience. In reality, these shared infrastructure investments that help 4G would not have happened unless operators knew 5G was coming soon.
2G and 3G switch-offs will accelerate in 2021
Mobile users’ appetite for 5G will cause operators to work with regulators to move towards switching off 3G services on existing spectrum bands to increase the capacity available for more efficient 5G technology. We’ve seen evidence of such 3G changes in Germany. While in the U.S., we’ve seen AT&T juggle 4G spectrum to boost its 5G offer. But operators will need to be careful not to open up digital divide issues in markets where mobile users lack modern 4G or better hardware and continue to use older 2G or 3G handsets.
5G Internet of Things opportunities will stay on the horizon
While the creators of the 5G standards continue to target IoT markets like smart agriculture, industrial automation or automotive, the ongoing challenges the world faces now will cause operators to focus mostly on traditional mobile telecom markets that do not require the very latest bleeding edge 5G standard to be deployed. During 2021, operators will be busy launching standalone 5G, expanding 5G availability, and improving mobile broadband using 5G while trialing 5G IoT. Enterprises will want to know that 5G technologies like network slicing are robust before relying on them. Operators have enjoyed being seen as highly resilient during 2020’s adversity and until the COVID-fueled crisis is fully over, they will remain reluctant to make big bets on completely new markets near term without ensuring that the necessary 5G foundations are fully in place.
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