Mobile Technologies, Services Generate $4.4T in 2020, Adds 5.1% to Global GDP – GSMA

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Mobile Technologies, Services Generate $4.4T in 2020, Adds 5.1% to Global GDP – GSMA Mobile Roaming Subscribers to Reach 918 Million Globally by 2024; Recovering to Pre-pandemic Levels Brandspurng
Photo by Brandy Kennedy

In 2020, mobile technologies and services generated $4.4 trillion of economic value added (5.1% of GDP) globally. This figure will grow by $480 billion by 2025 to nearly $5 trillion as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services.

The GSM Association (GSMA) revealed this in its “Mobile Economy 2021” report. The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with almost 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors.

Key highlights in the reports

  • Smartphones will make up 81% of mobile connections in 2025, Rise by 13%
  • Mobile Internet Users to Hit 5 Billion, 60% of World Population by 2025
  • Mobile operators will invest $900 billion in their networks over the period to 2025, of
    which more than 80% will be on 5G
  • China alone will account for nearly half of the total 5G connections by 2025

“5G is expected to benefit all economic sectors of the global economy during this period, with services and manufacturing seeing the most impact”, the report stated.

According to the GSMA, 5.2 billion people subscribed to mobile services, representing 67% of the global population by the end of 2020. Adding new subscribers is increasingly difficult, as markets are becoming saturated and the economics of reaching rural populations are becoming more difficult to justify in a challenging financial climate for mobile operators.

Mobile Technologies, Services Generate $4.4T in 2020, Adds 5.1% to Global GDP – GSMA Brandspurng

That said, there will be nearly half a billion new subscribers by 2025, taking the total number of subscribers to 5.7 billion (70% of the global population). Large under-penetrated markets in Asia and Sub-Saharan Africa will account for the majority of new subscribers.

5G momentum builds, but 4G still has room to grow

The launch of commercial 5G services in Latin America and Sub-Saharan Africa over
the last year means that the technology is now available in every region of the world.
The pandemic has had little impact on 5G momentum; in some instances, it has even
resulted in operators speeding up their network rollouts, with governments and
operators looking to boost capacity at a time of increased demand.

By the end of 2025, 5G will account for just over a fifth of total mobile connections and more than two in five people around the world will live within reach of a 5G network.

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Mobile Technologies, Services Generate $4.4T in 2020, Adds 5.1% to Global GDP – GSMA Mobile Roaming Subscribers to Reach 918 Million Globally by 2024; Recovering to Pre-pandemic Levels Brandspurng
Photo by Brandy Kennedy

In leading 5G markets, such as China, South Korea and the US, 4G has peaked and, in
some cases, begun to decline. In many other countries, particularly in developing regions,
4G still has significant headroom for growth.

Much of the growth in 4G will come from existing 4G infrastructure, as 5G will account for 80% of total CAPEX over the next five years. Globally, 4G adoption will peak at just under 60% by 2023 as 5G begins to gain traction in new markets.

Covid-19 weighs on financials, but recovery will be swift

Mobile revenue growth fell sharply in the first half of 2020 due to store closures, loss of roaming revenue and discounts on mobile services to support vulnerable customers.

The financial outlook is mixed. Lower consumer spending in developed markets could compound limited subscriber growth and price competition, while developing markets could see sustained growth from mobile data uptake and a surge in new subscribers, given the reliance on mobile networks for internet access.

Mobile networks around the world showed notable resilience during the pandemic, despite the changes in consumption levels and patterns. Service continuity in these challenging times emphasises the considerable investment in network capacity by operators.

With connectivity set to play an even more prominent role in a post-pandemic world, operators’ continued investment in advanced networks, particularly 5G, and digital services will be crucial to the functioning of society in the future.