5G Will Be the Dominant Mobile Standard from 2026

The global telecoms sector's revenues grew 4.3% in 2023 to reach USD 1.1 trillion, but it is still in a difficult position despite 5G subscriptions expected to quadruple by 2028, according to PwC's Global Telecom Outlook.

As the world becomes increasingly reliant on digital platforms, artificial intelligence and digital infrastructure could play a key role in shaping the future of not only telecoms but also network infrastructure services.

Global telecoms revenues are expected to grow at a below-inflation compound annual growth rate (CAGR) of 2.9% to 2028, while total sector revenues across fixed and mobile verticals grew by 4.3% in 2023, reaching USD 1.1 trillion. 

According to PwC Global Telecom Outlook research released ahead of the Mobile World Congress in Barcelona, the telecom industry faces a slow outlook due to rising costs and competition, subdued subscriber growth, and macroeconomic and geopolitical factors. Although the sector is experiencing volume growth, average revenue per user (ARPU) is expected to decline by 2% per year until 2028 in mobile, fixed broadband and voice services. 

The survey results are prompting a rethink by industry players, but there are significant differences in growth prospects between services and markets. While fixed broadband and mobile subscriptions are expected to grow by 3.8% and 4.3% per year respectively until 2028, fixed voice subscriptions are expected to decline by 1.8%. Geographically, fixed subscriptions are forecast to grow between 0-6% - with higher growth markets including India (17.2%), Nigeria (9.2%) and Malaysia (9%).

"We do not expect subscriber growth in Hungary. A much more exciting trend is market consolidation and its impact on competition," Antal Kerekes, Partner, Business Advisory at PwC Hungary, pointed out. "In addition to consolidation, an important change is the decoupling of infrastructure from service providers, a global trend that has already fully caught up with the domestic market. This creates an opportunity to change the former infrastructure-based competition to a customer-focused one and to reduce infrastructure costs, although in some areas this has the opposite effect, for example where the consolidation will result in a single fixed market with two operators. The development of 5G infrastructure could provide a further boost to competition in the domestic market. The evangelization of Hungarian customers still has challenges ahead, and the country has a strong resilience in terms of both switching and the take-up of available services," he stressed.

Although 5G services have been slow to take off so far, subscriptions are expected to quadruple from 1.79 billion in 2023 to 7.51 billion in 2028, and the share of total mobile subscriptions will more than triple from 18.8% to 64.1%. At this rate, 5G is expected to become the dominant mobile standard from 2026. Fixed wireless access (FWA) will be the fastest growing broadband technology, with an average growth rate of 18.3% until 2028.

Under these circumstances, capital flows will clearly shift towards fixed links, with fiber being the most important of these. In 2023, total telecoms capital investment will fall by 2.3%, mainly due to a 5.7% decline in mobile. However, industry capital expenditure is expected to grow at a 2.4% rate from 2024, driven initially by investment in fixed broadband fiber roll-out and later by a resurgence in mobile CapEx as operators prepare for 6G.