COVID-19 will lead to a 2.6% drop in global wireless service revenue by 2020

A new study by the Strategy Analytics network operator research team, Wireless Market Outlook: Competing Impacts of COVID-19 and 5G, notes that the recession triggered by COVID-19 will reduce wireless service revenues across the region in 2020 and only a slow recovery is expected in 2021.

COVID-19 will lead to a 2.6% drop in global wireless service revenue by 2020

Phil Kendall, executive director and report author of Strategy Analytics, said, “After a turbulent 2020/21, wireless service revenues will stabilize and begin to recover from 2023 as 5G contributes more to connectivity revenues.” However, after the operator’s earnings peak in 2017, their earnings will continue to decline over the next five years. “

The report notes that large amounts of unemployment or forced leave are affecting consumers’ disposable income. For most people, mobile phones are still the key tool. However, consumer affordability continues to affect their consumption.

Roaming services typically account for 2-4% of carrier service revenue, but the outbreak has hit the service hard, and roaming revenues in many regions will be in the doldrums until 2021 as travel activity struggles to return to normal levels.

Optimistically, during the blockade, many people worked and studied from home, and broadband connectivity became a must. The benefits of mobile voice and data traffic have increased significantly among many carriers, while consumers’ high reliance on mobile phones has had a lower negative impact on the wireless market than in some industries.

Strategy Analytics believes that over the next five years, the carrier’s environment will face increasing challenges. David Kerr, Senior Vice President of Wireless and Broadband Research Services at Strategy Analytics, noted that “the overall slowdown in cellular subscriber growth, with the fastest growth in the region actually coming from lower ARPU markets or lower ARPU segments (e.g. connected devices), which, along with continued competition in the market, makes it more difficult for mobile operators to seek revenue growth in their connected businesses.” “

By the beginning of May 2020, there were more than 75 available 5G commercial networks worldwide. By the end of the year, the number of 5G connections related to users will grow to more than 200 million, reaching 2.8 billion by 2025. Strategy Analytics estimates that Q1,5G ARPU will be 80% higher than 4G in 2020.

Susan Welsh de Grimaldo, Director of Strategy Analytics, said: “5G will start to work in 2021, will exceed 4G revenue by 2024 and 5G will account for 53 per cent of total service revenue by 2025. “