The future of the tech industry will be shaped by a range of disruptive themes, with 5G being one of the themes that will have a significant impact on telecom services companies. A detailed analysis of the theme, insights into the leading companies, and their thematic and valuation scorecards are included in GlobalData’s thematic research report,5G – Thematic Intelligence. Buy the report here.
5G, the fifth generation of cellular technology, is built to enable faster mobile data speeds than 4G LTE and other earlier technologies, providing the potential for revenue growth and lower customer churn. 5G will allow networks to be virtually sliced to provide a range of different service characteristics for different use cases. After years of anticipation, most of the world’s largest operators have deployed 5G networks. 2020 saw a growing number of 5G commercial launches worldwide, with more than 400 million 5G subscriptions active as of the end of the year.
5G must be supported by mobile network operators and their infrastructure suppliers. Also, truly transformative 5G use cases will require network upgrades that extend beyond the radio portion of the network to include the mobile core and transport segments. Finally, 5G must be supported by a robust set of terminals, including smartphones, tablets, fixed wireless access points, and eventually sensors and other Internet of Things (IoT) touchpoints.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
Insights from top ranked companies
China Telecom is China’s third-largest mobile operator, with 326 million subscribers as of the end of 2020. The company has 210,000 5G cell sites (in part through a network-building joint venture with China Unicom, the country’s third-largest mobile operator). China Telecom reported spending 47% of its H1 2020 capital expenditures on its 5G network. China Telecom believes it has the fastest 5G speeds, with a peak speed of 2.7 Gbps. It also was the world’s first operator to offer commercial 5G Standalone (SA) capability in Shenzhen in 2019. China Telecom has had modest success upselling customers to 5G services, including HD and VR video content, helping generate a 10% uplift in average revenue per user (ARPU) compared to 4G LTE. In the enterprise segment, China Telecom offers over 300 use cases in eight key industries, including Industrial Internet and smart healthcare. It has established over 50 5G Innovation Centers to foster continued innovation.
Deutsche Telekom (DT) is Europe’s biggest network operator. It owns the mobile communications brand T-Mobile, which has a significant presence in Europe (notably Germany, Austria, the Czech Republic, and Poland) and is the third-largest mobile provider in the US. T-Mobile US acquired Sprint in 2020, in no small part for its 5G spectrum assets. In Europe, Deutsche Telekom acquired 40MHz of paired spectrum in the 2GHz band and a 90MHz block in the 3.6GHz range in 2019, although it is using 15MHz of spectrum in the 2.1 GHz band. Deutsche Telekom launched its European 5G service in September 2019, and by June 2020, it claimed to have 12,000 5G antennas in operation, covering close to 50% of the population. The company has also installed six cells with commercial 5G antennas in Berlin, using frequencies in the 3.7 GHz spectrum band.
KT (formerly Korea Telecom) is the second-largest mobile operator in South Korea, with 17 million subscribers at the end of December 2020. The company, along with its two competitors LG Uplus and SK Telecom, was the first in the world to offer commercial 5G service in April 2019 using Non-Standalone (NSA) over 3.5 GHz spectrum. It had amassed 2.8 million 5G customers by September 2020 as part of its 5G First strategy. KT supplements its 5G network with mobile edge computing (MEC) telecom centres in eight Japanese cities, enabling low-latency applications such as cloud gaming, AR, and VR as well as other key services such as autonomous driving. KT offers eight “Super Power” services focused on communications, games, and media.
To further understand the key themes and technologies disrupting the technology industry, access GlobalData’s latest thematic research report on 5G.