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Summary
The worldwide spread of the coronavirus is seeing impacts in all areas of life for everyone, but what impacts does Omdia expect that this global pandemic will have on the mobile subscriptions market?

Omdia’s latest mobile subscriptions forecast is for 5G to see growth and account for over 20% of total subscriptions by 2024. This prediction includes more than 100 5G networks launching in 2020. Beyond this, mobile broadband connections are set to grow to 8 billion by 2024, largely thanks to growth in developing regions and global service revenue increasing by 1% in 2020. Now with a widespread, global pandemic taking grip these expectations are under threat.

How big an impact will the coronavirus have on 5G’s rollout?
The shutting down of much of China during 1Q20 meant there were immediate concerns over the supply chains of both consumer devices and network infrastructure for the mobile industry. Apple had advised it expected the supply of new iPhones to be “temporarily constrained,” but with Foxconn restarting production already the supply side of the market appears to be getting back on track promptly. On the network side, Ericsson have said the factories are “back in production” for the necessary infrastructure, so the scheduled 2021 deliveries should go ahead as planned. But France, the fourth largest mobile subscriptions market in Europe, has already delayed its 5G spectrum auction and Mexico has also chosen to focus on managing the impact of coronavirus rather than continue with their auction as planned.

What remains to be seen in the global market is consumers’ demand for new devices during the expected time of economic uncertainty happening worldwide. The focus in 2020 is of course on 5G devices and Omdia expects the mass market awareness of 5G to grow sharply with the release of Apple’s 5G device(s). Any delay in the availability of this new Apple handset would undoubtedly have a significant influence on 5G subscription uptake in 2020 and beyond.

So, what are the potential impacts of these recent, major market changes?
A delay in 5G network spectrum allocation and/or launches in 2020 and there will be many millions of subscriptions delayed for both 2021 and 2022. If fewer than a half a dozen countries in Western Europe were to see scheduled 5G network launches pushed back from this year, then total 5G subscriptions in 2020 would fall by over 20% in the region. A delay in an iPhone 5G model would see similar impacts in North America as many loyal Apple users will have to wait to upgrade.

Service revenue growth has been hard to come by in recent years for operators. If, as a result of the coronavirus, consumers do not upgrade their phones and the associated upgrading to higher value postpaid deals, choose to move from postpaid to prepaid to monitor their costs, use Wi-Fi in place of mobile internet, and roam abroad less regularly due to travel restrictions, there will be a contraction in the service revenue generated during 2020. With all these mobile-specific factors combined with the seemingly inevitable global recession and those associated negatives impacts, the 1% growth expected in 2020 will certainly become a decline of at least the same magnitude and 2021 will see an impact as well.

Omdia’s forecasting team are closely monitoring the development of the coronavirus and its impacts and will be publishing updated guidelines on the impact to the mobile market at a global level in the coming weeks.