First 2020 predictions – crystal-balling with Opensignal

Image courtesy Opensignal

In the world of telecoms, 2019 will probably be remembered as the year 5G got serious, going from a few initial test networks to reach millions of users in dozens of markets worldwide. So what can we expect from the next generation, and the rest of the mobile world, in 2020? We’ve had a look into our crystal ball to bring you our top predictions for the coming year.

3G will continue to be more popular than 5G in 2020

Yes, really! Opensignal’s data shows that 27.2% of our global user base has never connected to 4G and instead relies on 3G. And this is not just in emerging markets: Our recent analysis in Germany found that up to half of users don’t connect to 4G networks, and 5G adoption is moving too slowly to overtake 3G adoption in just one year, anywhere in the world. Gartner forecasts the revenue communication service providers (CSPs) — ie operators — gain from 3G will be greater than from 5G in 2020.

Using 5G to ease congestion on 4G networks will become a key operator use case

Current 5G networks have limited reach, meaning the vast majority of users are still relying heavily on 4G. And as data demand continues to rise, we are seeing signs of increased congestion on 4G networks in mature markets, leading to dropping speeds — particularly at busy times of the day. As 5G networks become more ubiquitous and devices more widespread, operators will look to move their heavy data users onto 5G, to improve the mobile network experience on 4G. But the 5G experience will be hugely dependent on a number of factors, not least the availability of spectrum. 

Marketing 5G will be tough because 5G will not be a uniform experience

The 5G experience will depend on the type of spectrum used. We already see notable differences in mobile network experience on 4G, dependent on the bandwidth used. Consumers connecting to 5G on low-band spectrum — like 600 MHz or 700 MHz — will not have a dramatically better experience than 4G, but consumers will still see 5G in their phone’s status bar. Those using mmWave will see extremely fast speeds, but very little coverage. Those using mid-band spectrum will see higher speeds than 4G and wider coverage than mmWave. But all kinds of network experience will be called 5G.

5G will herald the arrival of increased variety in tariff plans, such as unlimited data and speed tiering

In countries where there are large quantities of fresh mid-band spectrum suitable for 5G, operators will return to offering unlimited data plans as wireless spectrum constraints are replaced by a spectrum supply shock, and the pressure to monetize the 5G investment increases. But once 5G networks fill up, later in the 2020s, operators will have to return to more traditional tariff approaches.

The rollout of 5G will accentuate the urban/rural divide

Opensignal has recently analyzed the difference between urban and rural areas — and we found a sizable rift in mobile network experience in a number of markets. In Germany, we saw 4G Availability differ by over 10 points on some operators, while in Malaysia this gap was  close to 40 points. And with 5G operator rollout following the 4G model and focusing on densely populated cities, average speeds will rise for our urban users, with rural speeds drifting further behind. Eventually 5G rollout will come to rural areas too — but we don’t expect this for a few years yet.

Spectrum availability will have a huge impact on the 5G experience

Our analysis shows that the frequencies used for 4G can have a strong impact on the mobile network experience. The majority of early 5G launches have utilized mid-band spectrum, in the 2 – 4 GHz ranges. These bands are ideal for urban rollout, offering a good mix of data capacity, range and in-building penetration. But in some markets — particularly the US — availability of this spectrum is scarce, meaning operators are using higher mmWave bands. Markets using mmWave bands will struggle to offer wide coverage for 5G. Unless both mid-band spectrum and mmWave spectrum is available the 5G experience will be incomplete.

4G will remain an essential foundation for 5G services in 2020 

Opensignal recently found that just 1% of speed tests our US users conducted from 5G New Radio (5G NR) enabled devices used an active 5G connection, compared with 20% of speed tests conducted in early 5G leader South Korea. Much like the issue with non-standalone 5G networks, this means the user is not getting the full 5G experience — and this issue will continue in 2020 unless more 5G NR devices become available.

Multiplayer mobile gaming will explode, but cloud gaming services will struggle

Fortnite, Arena of Valor and PUBG mobile are just the start of a wave of multiplayer mobile game success stories. As latency improves on 4G and 5G networks, users will increasingly play multiplayer games on cellular as well as on Wifi connections and also talk to their teammates in-game using voice over IP. 

Mobile games that require 5G will have niche adoption in 2020

Due to its requirements for lightning-fast networks and ultra-low latency, online gaming has been tipped as the “killer service” which will monetize 5G. But 5G networks are in their infancy, and the true speed potential of the new technology won’t be fully realized until standalone networks are widespread. Online multiplayer and cloud-based gaming are clearly the future — but we will have to rely on 4G network speeds for a while yet. And our recent analysis shows that Latency Experience scores in the US are nowhere near the sub-30 millisecond speeds needed for a relatively seamless gaming experience. 

5G will trigger more operators to launch fixed broadband services

Operators need new revenue streams to justify 5G deployment costs. Offering fixed wireless access (FWA) broadband will prove a tempting revenue opportunity. However, operators will need to assess where there is spare wireless capacity that is not needed to support smartphone users, or the mobile experience of their main customers will suffer if fixed services take over too much. Operators will also think of innovative ways of marketing 5G to the masses, using home 5G offerings to help boost multiplay bundles, as well as multi-user family and shared data plans.

Operators will use content bundles to accelerate 5G adoption

We’ve seen some massive operator content deals in the past few years, with AT&T’s acquisition of Time Warner, and a flood of partnership deals with the likes of Netflix, HBO and Disney. The use case for viewing long-form videos on smartphones via cellular remains uncompelling — but with companies such as Apple and Disney investing heavily in mobile content, the next generation of users who are currently getting their first phones could be the ones to change mobile habits forever. 

5G will bring the elusive Excellent mobile Video Experience to the masses

Since the launch of our Video Experience metric a year ago, we’ve hardly seen any operators able to achieve our top Excellent rating. In our latest US report, we only saw one operator able to claim even a Good ranking. This is partly due to 4G network congestion, poor latency, and operator throttling, particularly of higher-definition video streaming. But 5G will help relieve the pressure on 4G capacity, enabling more users to enjoy a high quality mobile video experience at the same time, allowing operators to lift network video traffic management restrictions. As a result, Opensignal expects to see many more Excellent Video Experience scores in 2020, particularly in early 5G launch markets like South Korea. 

Brazil: Spectrum will become more of a prize commodity

We recently analyzed the effect of the infusion of 700 MHz spectrum in Brazil’s cities and the improvement it is having on the mobile network experience. Oi missed out in the last 700 MHz auction, making upcoming auctions even more important. We are expecting an auction of a wide range of 5G spectrum in Brazil in 2020, but this has now been postponed until the fourth quarter at the earliest. 

Singapore: 5G will make a big splash in 2020 despite a capacity crunch

Singapore’s operators now hope to launch four 5G networks in the next year, as opposed to the previously planned two — including two standalone networks. The high population density means the city will be covered with 5G relatively quickly, so we expect 5G adoption to skyrocket in 2020. But the country’s operators are also bracing themselves for the impact of a fourth entrant and 5G spectrum is in short supply. Users’ mobile experience threatens to stagnate, or even go into reverse in 2020, unless Singapore’s operators change strategy and focus on quality not price competition.

Philippines: Competition will spike with the arrival of a third operator and 5G 

After years of relatively stagnant competition, the Philippines market is also bracing itself for fresh competition, in the form of DITO. Smart has largely dominated the awards table in our reports — but Globe has recently leveraged its fiber infrastructure to launch a 5G fixed wireless offering. The market is set for big changes — and 5G will be a key battleground.

Malaysia: Fiber Connectivity Plan will kickstart the mobile network experience

The launch of the National Fiberasation and Connectivity Plan in Malaysia should bring big improvements to our users’ experience. The plan aims to develop broadband infrastructure and ensure more efficient spectrum allocation, with a target of widespread download speeds over 30 Mbps — quite an ask, since our latest report found Download Speed Experience scores have barely crossed the 20 Mbps mark. But competition continues to increase in Malaysia, and with six players in some of the cities, the market is ripe for consolidation.

Germany: Fourth 5G operator will show its hand, leading to network-sharing deals

This year’s German 5G auction saw a potential new entrant, United Internet’s 1&1 Drillisch, gain spectrum. The new player, which currently has a mobile virtual network operator (MVNO) deal with O2, plans to launch its own 5G network and is in talks with potential 3G and 4G roaming partners — opening up the possibility of 5G roaming or even a network-sharing deal.

India: the year that the inexorable growth of Jio finally plateaus

Over our past few reports on the Indian market, we’ve seen Jio’s 4G Availability rise inexorably to become among the highest in the world. But as its score closes in on 98%, this rise is highly likely to plateau this year — allowing key rival Airtel to close the gap. Meanwhile, both operators face a resurgence in competition as Vodafone and Idea complete their merger.

Written by Peter Boyland, Senior Analyst at Opensignal

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