The introduction of Samsung’s flagship Galaxy smartphone line in February has far-reaching implications beyond the telecom giant’s balance sheet. This will be the first time a mainline 5G flagship smartphone series will be introduced to the market, and telecom operators in the US are awaiting the new influx of customers with a mixture of excitement and trepidation.
The reaction among American consumers, however, is more muted, with only 15–20% being familiar with the technology. Competing standards among telecom operators, as well as complex terminology, may have added to the confusion prevalent among American consumers. While this reaction is not new – we saw similarities when 4G was introduced in 2010 – consumer ambivalence despite the significant advertising spends could be a cause for concern for US operators.
5G LANDSCAPE IN ASIA TODAY
This scepticism, however, is less prevalent in many parts of Asia, with some markets eager to make a head start in national 5G implementation at scale. South Korea was the first Asian market to introduce 5G nationwide in mid- 2019; this was possible because South Korea decided to convert all their 4G towers to 5G instead of building new ones.
In the ensuing eight months, close to 5 million consumers have subscribed to 5G services. This has eclipsed the initial rate of 4G adoption in the country. Over in Singapore, the three incumbent network operators – Singtel, Star Hub, and M1 – have all started 5G trials with industry partners, including a large 5G pilot network by Singtel and Ericsson. Saudi Arabia and the UAE have also launched clinical trials and are expected to launch 5G services in the next 12 months.
Not only are telecom operators excited about 5G, consumers are too. Surveys with Singaporeans show that 5G awareness is high and that a majority are willing to pay a premium for 5G services. The enthusiasm for 5G is similarly strong among Saudi Arabian and UAE consumers, with 55% of them intending to switch to a 5G network at the earliest opportunity.
One of the key drivers of 5G adoption in Asia will be the general increase in mobile internet penetration in Asia – it is estimated that this will grow to 62% by 2025. A lot of this growth will come from developing Asian markets like India, where internet growth is primarily coming from mobile.
Another key driver of 5G adoption will be relief from urban network congestion in megacities, which causes mobile speeds to slow – e.g. 50% of South Korean smartphone consumers believe that their mobile internet speeds are not fast enough (despite Korea having one of the fastest 4G internet speeds in the world). Consumers therefore hope that the introduction of 5G will result in higher speeds.
All this positive momentum is set to propel 5G adoption to 675 million connections in Asia Pacific by 2025. With this growth, a key question for operators and end-users will be what specific applications or use cases will drive 5G adoption.
THE CASE FOR GAMING
We expect video gaming and gamers to be some of the biggest beneficiaries and triggers of widespread 5G adoption in Asia. Gaming has been a key activity for consumers in Asia – it represents the largest gaming population in the world, with over 1 billion gamers. With increased smartphone penetration in massive markets such as India, this number is set to grow even further. Furthermore, gaming is expected to play a driving role in 5G traffic – online gaming is expected to account for 25–50% of 5G traffic by 2022.
Given its significance, telecom operators have increased their focus on enhancing the gaming experience for their consumers. For example, based on the early positive feedback from consumers, KT in South Korea has announced plans to work with cloud gaming specialist Ubitus to bring its gaming service to its 5G customers in South Korea. Even in Singapore, where 5G isn’t available yet, Singtel is testing its network for cloud gaming readiness, highlighting its importance among local consumers.
Gaming has always been at the forefront of technological evolution. It was one of the earliest adopters of 4G technology and drove innovation not only in gaming but also in complementary industries like artificial intelligence, hardware, and entertainment. We believe that, despite the early teething troubles (differing standards, ecosystem), 5G will have a similar impact to 4G and fundamentally alter the way we work, play, connect, and live. If telecom operators in Asia deliver on the 5G experience as successfully as they have hyped it up, we can expect the region to play a central role in global technological innovation in the coming decade.