Here's why 5G is poised to take off

BII

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There will be around 550 million 5G subscriptions globally in 2022, according to the latest Ericsson Mobility Report.

The projections suggest a sharp uptake in adoption of the new technology, which is expected to reach commercial markets in 2020.

In particular, the adoption is expected to be driven by consumers in mature markets like the US, where Ericsson projects 5G will account for 25% of all mobile subscriptions. Mass uptake of 5G will enable enhanced usage across an array of industries, particularly with the rise of connected devices such as homes, cars, and cities.

Moreover, the enhanced capabilities of 5G will give app developers and businesses even greater flexibility in how they engage with users. For example, the CTIA released an overview of the Next Generation of Wireless, which outlines the impacts of the impending 5G rollout:

• 5G is going to be much, much faster than its predecessor. 5G speeds will surpass 1 Gbps; at its slowest, it will be 10 times faster than 4G was in 2010.
• Response times will be five times faster than that of 4G. This will effectively open the doors to connected processes that rely on low latency, such as automated cars. For example, it takes about 4.5 feet for a 4G car to apply its brakes after its system acknowledges it needs to stop. 5G will reduce that distance to just an inch.
• Decreased latency on the 5G network also has the potential encourage consumer adoption of VR and AR headsets. The low latency of 5G will enable real-time interaction without the nausea-inducing visual delay that accompanies VR headsets today.

Nevertheless, 4G LTE subscriptions will make up the largest portion of overall mobile subscriptions as emerging markets catch up to the rest of the world. Still, this will provide much greater connectivity in regions such as India, the Middle East, and Africa, giving businesses massive opportunity to reach consumers in markets they were unable to reach before.

The adoption of 5G will be particularly important for the wireless industry, which is in a state of flux. AT&T and Verizon have dominated the carrier market over the past seven years while T-Mobile and Sprint have struggled to gain subscribers. Then in 2013, T-Mobile tweaked its strategy to turn around its business.

This move, along with slowing smartphone adoption and other forces in the mobile industry, killed the two-year contract and initiated an ongoing price war between carriers. The movement away from the contract model is not only changing the way carriers operate, it’s affecting the myriad of industries that rely on carriers’ services.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on wireless carriers that examines how the wireless industry has fundamentally changed since carriers began aggressively responding to the launch of T-Mobile’s “Un-Carrier” movement. It also looks at the factors underpinning changes in the broader wireless industry and the challenges carriers face in 2016 and beyond, including the upcoming spectrum auction and the deployment of new wireless technologies.

Here are some key takeaways from the report:

• Consumers are actually becoming more loyal to their current wireless operator even as competition between the carriers intensifies.
• The wireless carriers are not only battling over device financing, they’re also trying to woo consumers through attractive data packages.
• Intensified competition between carriers has lengthened the smartphone replacement cycle, posing a challenge for mobile software developers and handset makers.
• With phone subscriber growth stagnating, carriers will look to alternative sources of revenue, including connected cars, tablets, and IoT devices, to drive growth.
• The upcoming spectrum auction, the latest ruling on net neutrality, and new technology, will change the face of the broader wireless industry in next few years.

In full, the report:

• Examines the impact of T-Mobile’s Un-Carrier movement on the wireless industry.
• Forecasts how the death of the two-year contract will impact the broader mobile industry.
• Identifies how carriers are helping facilitate the growth of mobile video consumption.
• Explains the changing nature of subscriptions and the growing importance of connected devices.
• Discusses what changes and challenges the wireless industry will face over the next five years.

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the wireless carrier war.