Mid-band dominates 5G in emerging markets

Spectrum assets will determine the strategies, investments and deployment for each aspect of the terrestrial telecommunication and satellite industry in the 5G market in emerging territories, according to a study from ABI Research, warning of fundamental technological issues that could hamper deployment.

The report, Emerging markets broadband objectives: Spectrum requirements, forecasts that approximately 90% of 5G cell sites in emerging markets will be operating a combination of sub-6 GHz bands by 2026, with sub-6 GHz bands providing the best-in-class coverage while catering for sufficient capacity in emerging markets.

Yet while millimetre-wave (mmWave), with its larger amount of bandwidth, can meet very high-capacity demand use cases, ABI said its poor propagation characteristics and cost of deployment puts it at a disadvantage compared with sub-6 GHz bands for 5G deployment.

“5G mmWave will have its role to play in urban and suburban downtown locales in developed markets, and perhaps commercial business districts in emerging markets, but the reality is that emerging market telcos will need the coverage and capacity characteristics of the sub-6 GHz bands for 5G,” said Dean Tan, research analyst at ABI Research.

“Not only does sub-6 GHz have sufficient capacity to meet demand, but it can also propagate over a longer distance and is not attenuated by rain.”

In its spectrum survey of 32 emerging markets, ABI found that by 2023, at least half of countries will have allocated the low band (<1 GHz) spectrum for 5G, while about 87% of countries will have allocated the mid bands (1 GHz to 6 GHz). This stands in comparison with 34% and 12% of countries for 26 GHz and 28 GHz bands respectively by 2023.

ABI noted that for any market, it was fundamental that users have affordable handsets for a range of disposable income profiles. For emerging markets, it added, it was important that smartphone sales can be sustained at about US$100 to increase inclusivity.

While it noted that there will be disposable income strata that can afford multi-band/mmWave handsets, ABI stressed the reality was that handset suppliers will need to focus on the sub-6 GHz bands to keep the bill of material costs down.

The analyst expects 5G handset shipments supporting the sub-6 GHz band in emerging markets to grow to nearly 600 million by 2026, at a CAGR of 22.7% from 2020.

“It is important for mobile operators to leverage globally harmonised spectrum bands as it provides economies of scale with the solutions, especially for markets where the average ARPU per month can be below US$10,” said Jake Saunders, vice-president for APAC at ABI Research.

“In Nigeria, Airtel’s monthly ARPU is about US$3.6, while for Jio in India it is US$1.93. Mobile operators in the emerging markets need to identify the optimal spectrum deployment strategy to meet their mobile broadband requirements.”

Aside from the industry momentum it observed, ABI noted that sub-6 GHz bands are crucial in supporting key applications such as the internet of things and Fixed Wireless Access.

In emerging markets where consumers are likely to have higher price sensitivity, the majority of the FWA demand will be driven by LTE. This will be especially true for countries with larger populations living in the rural areas or with a challenging geographical environment for fixed network deployments.