Tag: 5G

Ookla Research™ Articles
| December 20, 2023

U.S. - The Rise of 5G FWA & The Battle for Fixed Broadband Customers

Global Speeds

Fixed-wireless access (FWA) has emerged as a key 5G use case. Cellular providers in many markets are using FWA to easily enter and compete in fixed broadband markets, while fixed ISPs with access to 5G spectrum are utilizing it as a complementary access technology, allowing them to target locations where fiber access networks are not present. FWA can also be a solution to help bridge the digital divide in more remote locations where it’s uneconomical to lay fiber to connect premises.

The U.S. is at the forefront of fixed wireless access (FWA) development, with many of its major wireless carriers, including T-Mobile, Verizon, AT&T and UScellular targeting expansion. T-Mobile has built up a lead in terms of 5G fixed-wireless market share, with Verizon following closely, and AT&T recently launching a new FWA service – AT&T Internet Air. We examined Ookla Speedtest data to understand how FWA performance is evolving in the U.S., and how it is impacting churn in the market.

Key takeaways

  • T-Mobile & Verizon 5G FWA performance holding up well nationally. Despite strong customer growth, both T-Mobile and Verizon have maintained performance levels over the past year according to Speedtest data. Both ISPs recorded similar median download speeds in Q3 2023, although T-Mobile maintains an edge on median upload performance. Despite this, there are significant differences in performance at a State-level, and for urban versus rural locations.
  • Cable & DSL providers bear the brunt of user churn. The FWA value proposition is clearly resonating most with existing cable and DSL customers, which make up the vast bulk of churners to both T-Mobile’s and Verizon’s FWA services. It’s not one-way traffic however, with T-Mobile’s larger user base in particular showing some attrition to cable providers. In rural locations where options are more limited, FWA services are increasingly going head to head, with over 10% of users joining Verizon’s FWA service coming from T-Mobile.
  • Clear signs that download performance could be a key contributor to churn in the market. Our analysis of the customers of major ISPs in the US that have churned to T-Mobile’s FWA service shows that their median download performance before churning was below the median performance of all customers of these ISPs, indicating a performance short-fall that is likely contributing towards churn.
  • Further C-band spectrum will serve to strengthen FWA’s case. The release and deployment of additional C-band spectrum for all three national cellular carriers, and AT&T’s new FWA service will drive further performance gains, and further competitive pressure in 2024.

T-Mobile and Verizon FWA scaling strongly and national performance holding up well

Launched during the COVID-19 pandemic, FWA services from T-Mobile and Verizon have seen strong growth over the past three years. Aided by disruptive pricing strategies, no annual contracts, and ease of installation (self-install), net additions remain strong for both ISPs. T-Mobile’s current FWA plan retails for $50/month, but that falls to $30/month for customers subscribing to its Magenta MAX mobile plan. Verizon prices at a slight premium to T-Mobile, with its FWA service currently retailing for $60/month, but falling to $35/month with select 5G mobile plans. On the back of their success we’ve also recently seen AT&T update its FWA strategy, launching AT&T Internet Air in August 2023, with a similar pricing strategy.

Fixed Wireless Access (FWA) Customers – T-Mobile & Verizon
Company Reporting | Q3 2020 – Q3 2023

Utilizing the same 5G spectrum that its mobile customer base accesses, both T-Mobile and Verizon have been at pains to point out how they manage the on-boarding of new FWA customers, in order to limit any negative impact on performance for both cellular and FWA customers. The release and rollout of additional C-band spectrum for all three operators will provide extra headroom and the potential for improved 5G FWA performance, while T-Mobile has begun testing 5G Standalone mmWave, and has indicated that this could be utilized for 5G FWA in the future. 

Performance on T-Mobile’s and Verizon’s 5G FWA services has held up well to date, although it lags behind median download performance of the major cable and fiber ISPs. The median download speed across the US for all fixed providers combined in Q3 2023 was 207.42 Mbps. T-Mobile has recorded consistent median download speed over the past four quarters, reaching 122.48 Mbps in Q3 2023 based on Speedtest data, but saw its median upload performance erode slightly, down from 19.76 Mbps in Q4 2022, to 17.09 Mbps in Q3 2023. Verizon on the other hand improved its median download performance when compared to Q4 2022, reaching a similar level to T-Mobile, of 121.23 Mbps in Q3 2023. However, its upload performance remained lower than T-Mobile’s, at 11.53 Mbps.

U.S. 5G Fixed Wireless Access (FWA) Performance
Speedtest® Data – Custom Analysis | Q4 2022 – Q3 2023

Churn data shows Cable & DSL providers losing out to FWA

In order to understand the impact of these 5G FWA services on the U.S. fixed broadband market, we examined Speedtest data to identify users that had churned since Q2 2022 – when these services started to scale and really impact the rest of the market.

Our data shows that the bulk of churn to both T-Mobile’s and Verizon’s 5G FWA services in that time was from cable and DSL providers. Furthermore, it doesn’t skew towards rural locations, with both T-Mobile and Verizon seeing approximately 80% of their gross additions in urban locations. The aggressive pricing strategies of FWA providers have driven prices down across the market, with cable providers for example offering slimmed down broadband and content packages at competitive prices, while AT&T Fiber now prices its entry fiber package of 300 Mbps at $55/month.

Fixed Wireless Access New Recruits – Distribution of 5G FWA Gross Additions by ISP
Speedtest® Data – Custom Analysis | Q2 2022 – Q3 2023

While cable operators bear the brunt of churn to 5G FWA services at present, their strategic response in competing on price is seeing some FWA subscribers move back to cable – a trend which the availability of FWA services with no annual contracts makes easier. Speedtest data shows that Cox for example, saw 7.3% of gross additions come from previous users of T-Mobile’s FWA service, while for Spectrum and XFINITY, former T-Mobile FWA users accounted for 6.3% and 6.0%, respectively. 

In rural locations where FWA performance lags that of urban locations, and where cable providers have less overlap with FWA service, there is a more even spread of churn to FWA, between cable and DSL providers. In addition, we see stronger churn to rival FWA services, with Verizon’s FWA service attracting 11.1% of its gross additions from T-Mobile, and T-Mobile recording 2.7% of its gross additions from Verizon’s FWA users.

Users that churn experience improved network performance

With the larger FWA customer base, we ran an analysis of Speedtest data of users churning to and from T-Mobile’s 5G FWA service over the period Q2 2022 – Q3 3023, to understand if there were clear drivers for this churn. We found that the median download speed for the subset of users churning to T-Mobile, was consistently below the median of all users, for each ISP, highlighting the importance of ISPs ensuring consistent performance across their user base.

Targeting Churn – Performance Prior to Churning to T-Mobile's 5G FWA Service
Speedtest® Data – Custom Analysis | Q2 2022 – Q3 2023

Users moving to T-Mobile’s 5G FWA service, and those churning away from it, experienced an increase in median download performance. Those users joining T-Mobile’s FWA service over the period Q2 2022 – Q3 2023, recorded an increase in their median download speed of 13.04 Mbps. On the other hand, those users churning away from T-Mobile saw their median download performance increase by 85.53 Mbps. Users joining Spectrum, Optimum, Cox and XFINITY from T-Mobile’s 5G FWA service experienced median download speeds in excess of 100 Mbps faster, highlighting the significant performance advantages that cable and fiber providers maintain over FWA.

Targeting Churn – Performance for Customers Churning Away From T-Mobile’s 5G FWA Service
Speedtest® Data – Custom Analysis | Q2 2022 – Q3 2023

State and urban/rural analysis reveal 5G FWA performance gaps

While median performance has remained relatively stable for both operators over the past year, regional performance, and between urban and rural locations, varies significantly. The performance of 5G FWA services depends heavily on the spectrum bands available in each location, as well as the fact these FWA services do not rely on outdoor consumer premise equipment (CPE), with wireless signals having to navigate into the home. The deployment of additional C-band spectrum will help improve performance over time, however, users and ISPs who do not locate CPE externally, will have to continue to navigate the intricacies of available spectrum bands and CPE positioning within the home.

Rural locations predictably fared worse than urban locations for both T-Mobile and Verizon 5G FWA service, given differences in spectrum availability, and also distance from cell sites, although the difference was starker for Verizon’s FWA service, which recorded a median of 155.77 Mbps in urban locations during Q3 2023, but only 51.41 Mbps in rural locations. T-Mobile increased rural FWA performance, up from 82.20 Mbps in Q4 2022, to 91.96 Mbps in Q3 2023. Verizon on the other hand focussed more heavily on urban locations, with the 155.77 Mbps it achieved in Q3 2023 a sizeable increase on the 125.55 Mbps it recorded in Q4 2022.

Urban vs Rural 5G FWA performance
Speedtest® Data – Custom Analysis | Q3 2023

Setting a minimum threshold of 100 samples for Q3 2023, Speedtest data showed Verizon recorded a median 5G FWA download speed of 181.77 Mbps in Nebraska, followed by 160.56 Mbps in Colorado, and 150.24 Mbps in Kansas. At the other end of the scale, Verizon 5G FWA users in Mississippi recorded median download speeds of 31.54 Mbps, of 36.72 Mbps in Wyoming, and 46.92 Mbps in West Virginia. Upload performance followed a similar trend, with a high of 16.74 Mbps in Nebraska, and a low of 4.20 in Mississippi.

T-Mobile’s 5G FWA service saw median download performance hit a high of 189.58 Mbps in Hawaii during Q3 2023, and like Verizon was strong in Nebraska, with 150.53 Mbps, while Oregon followed with 145.11 Mbps. States with lower median download speeds for T-Mobile included Vermont with 63.31 Mbps, South Dakota with 65.38 Mbps, and like T-Mobile, West Virginia with 67.23 Mbps. Median upload performance for T-Mobile’s 5G FWA service also varied significantly, reaching 41.62 Mbps in Hawaii, but falling to 9.74 Mbps in North Dakota.

We’ll continue to monitor the progress of FWA in the U.S., and the competitive response from cable, DSL, fiber and even satellite providers, as the battle for users intensifies. To find out more about Speedtest Intelligence data and insights, please contact us here.

Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.

Global Speeds
5G

About the Author

Mark Giles

Ookla Research™ Articles
| January 12, 2024

Bahrain’s 5G Gaming Performance and Investments are Aligned with its Aspirations to Become a Regional Hub

5G

Bahrain took the lead in 5G gaming performance across the Gulf Cooperation Council (GCC) and the Middle East during the first half of 2023, based on Ookla Speedtest Intelligence® data. This article examines the gaming performance on Bahrain’s 5G networks, evaluates their suitability for multi-player on-device and cloud gaming services, and discusses local initiatives to position Bahrain as the regional gaming hub.

Key takeaways

  • Bahrain’s 5G Game Score™ was the highest in the Middle East at 87.64 out of 100 during Q1-Q2 2023. This exceptional network performance helps to deliver a good gaming experience. With ultra-fast 5G speeds (413.69 Mbps) and low latency (72 ms), most casual gamers can expect a top-notch multi-player gaming experience.
  • Bahrain’s pro-gaming policies and initiatives helped to attract international companies and foster a burgeoning local gaming ecosystem. The vibrant start-up landscape, bolstered by supportive business-friendly policies, funding, and access to tech-savvy talent, helped to attract international gaming studios and emerge local ones.
  • Bahrain faces competition from its neighbors to become a regional gaming hub. However, it can leverage its advanced networking infrastructure and reputation as a technology incubator to attract companies and entrepreneurs who want to trial new ideas and technologies for gaming and transform them into ventures that serve the region.

Bahrain leads the Middle East in terms of 5G Game Score and latency

The cellular infrastructure is critical for the growth of mobile gaming. Advanced network systems that offer speed, reliability, and low latency are pivotal to seamless gaming experiences and thus, the gaming industry. The growing popularity of mobile devices and portable gaming also pushes the boundaries of what mobile games can do. 

Recognizing this, Ookla has devised a new metric, Game Score, to measure the gaming experience. This score considers various network parameters that impact gaming, including download and upload speeds, latency, and jitter. Game Score is based on Ookla’s consumer-initiated Speedtest Intelligence results for download and upload speeds, as well as Consumer QoE’s™ latency and jitter measurements taken on actual game servers. 

Each component is scored on a scale of 0-100 and then combined in a weighted average to produce a Game Score. A higher score signifies a better gaming experience for the user. You can find more details about the Game Score methodology here.

In a recent article, we presented the Game Scores for the six GCC countries. Bahrain led the Middle East region during the first half of 2023 with the highest 5G Game Score at 87.64. The U.A.E. and Qatar trailed closely with scores of 85.59 and 85.23, respectively, reflecting the high-quality mobile network performance in these markets that provides excellent gaming experiences. Saudi Arabia, Kuwait, and Oman received lower Game Scores.

Chart of 5G Game Score, Gulf Countries

Gamers in Bahrain can enjoy a great multi-player gaming experience over 5G

Looking more closely at two main components of the Game Score – download speed and game latency – we can assess how well Bahrain’s 5G network supports multi-player gaming services.

  • Download speed is crucial for ensuring uninterrupted gameplay and maintaining high-quality streaming. High download speeds are also important for downloading digitally distributed games and updates. Download speed requirements for online mobile gaming vary depending on the game type (for example, cloud gaming needs higher bandwidth than a game played on a smartphone) and the gamer profile (for example, competitive gamers will require higher bandwidth than casual players)
  • Game latency is a measure of latency to popular gaming server locations. It impacts the speed at which a gamer’s response is reflected in gameplay and is particularly important for games where quick reactions are crucial. Low latency also means smoother and lag-free gaming.

For this analysis, we consider two types of multi-player games to account for variations in network requirements and user expectations. The table below outlines the minimum requirements for casual gamers (who make up the majority of gamers) for download speed and latency for on-device and cloud games.

List of Network Requirements for Mobile Games

Ookla’s data shows that Bahrain significantly exceeds the speed requirement for both game types, with a median download speed of 413.69 Mbps during Q1-Q2 2023. This implies that gamers should not face delays in downloading games, loading games, or applying patches.

Bahrain has also the lowest latency in the Gulf region at 72 ms and should provide smooth gameplay for most casual games. Yet, some multiplayer shooters, racing, fighting, and multiplayer online battle arena (MOBA) games might experience some lag, particularly if streamed from a cloud server outside the country. There’s room for operators to enhance conditions for multiplayer games, especially for competitive gamers.

It should be noted that the gaming experience can be affected by other factors besides 5G network quality. The location of the game server, for example, can influence latency. If the game server is outside the country or region then the quality of international connectivity matters more. Since Bahrain has a small land mass and a high population density, game servers, and international gateways are likely to be close to gamers. This partially explains why its game-related metrics are better than those of other countries in the region.

Chart of Median Download Speed and Latency in Bahrain vs. Minimum Requirements for Games

Bahrain made the digital sector, including gaming, central to its economic expansion. The government and various regulatory authorities have fostered a favorable business environment to attract investments from global technology companies. Operators have also supported the country’s ambition to become the regional ICT hub by developing advanced digital infrastructure and nurturing local talent.

Following the COVID-19 pandemic, Bahrain prioritized ICT as a key sector for economic growth and diversification, setting targets to achieve 100% broadband coverage and increase the number of start-ups by 20% by the end of 2026. According to the Telecommunications Regulatory Authority (TRA), mobile broadband penetration of the population reached 146.0%, and fixed broadband penetration of households reached 69% in Q3 2023. 

Bahrain was among the first countries in the Middle East to launch 5G in 2019. The three mobile operators, Batelco, stc, and Zain, have invested in its expansion, achieving 100% 5G commercial network coverage. Operators are also upgrading their 5G infrastructure to improve throughput and reduce latency by deploying 5G Standalone (SA) and 5G Advanced (5.5G). For example, stc tested 5G SA in May 2022 and 5G network slicing in October 2023. Batelco deployed a cloud-native 5G core and tested 5G SA in April 2022. Zain trialed 5G SA in 2022 and implemented 5G carrier aggregation using a mid-band frequency.

Furthermore, Batelco’s parent company, Beyon, announced an investment of over $250 million to support the country’s digital transformation. This includes the development of the country’s biggest data center. In 2022, stc announced that it plans the region’s largest technology park, which includes a new data center. These new facilities will supplement existing data centers and strengthen the country’s position as a regional digital infrastructure center.

The country’s extensive and high-quality network infrastructure underpinned its ‘Cloud First Policy’ which encouraged public and private organizations to migrate to the cloud. This strategy has proven successful in attracting major hyperscalers like AWS which established three ‘regional availability zones’ in 2019 in Bahrain.

Pro-graming policies and initiatives helped attract international companies and develop a local gaming ecosystem

This influx of international cloud service providers has caught the attention of game publishers eager to cater to their fans in the region. Take Epic Games, the publisher of Fortnite, as an example. They set up a local server over AWS infrastructure to boost game response times and stimulate interest in e-sports. They expected latency to improve between 20% and 50% for players in the Gulf region and India. Similarly, Riot Games set up a local server in Bahrain for its game Valorant.

Bahrain has a vibrant start-up landscape in the Middle East region bolstered by supportive government policies, funding schemes, and a pool of young, tech-savvy talent. As part of the Bahrain Economic Vision 2030, the government established Tamkeen, an agency designed to promote private sector development and digital services adoption. Tamkeen has been involved in initiatives such as setting up a training program for video game development and the creation of the ‘D11 Gaming Hub’, designed to strengthen the e-sports ecosystem in Bahrain.

Thanks to these efforts, Bahrain attracted foreign gaming studios, like The Stories Studio, to establish a local office. It has also nurtured a burgeoning local game production industry, with award-winning gaming studios, such as Juego Studios and Regnum Studio, and a host of start-ups offering a range of products, solutions, and services for the gaming industry. Bahrain also aspires to be a leading e-sports competition destination in the Middle East, having already hosted global events like the BLAST Pro Series Global Final, NVTC Tournament, and GIRLGAMER Festival.

Operators have also taken proactive steps to capitalize on the growing demand for gaming in recognition of its potential to diversify revenue, increase customer engagement, and differentiate their services. For example:

  • Batelco introduced a mobile gaming portal in 2022.
  • stc launched the ‘stc play’ app, hosted multiple e-sport tournaments, and bundled gaming packages with its mobile data and home services.
  • Zain introduced a mobile game pass with a dedicated data allowance for popular games. It also partnered with the Bahraini Esports Federation and gaming platform provider Playhera to organize e-sports tournaments. Most recently, it launched the ‘Zain Esports Lab’ in collaboration with Tamkeen to host e-sports leagues, provide training to gamers, and offer professional opportunities for e-sports enthusiasts.

Bahrain harbors grand ambitions to strengthen its standing as a regional gaming hub

As part of the Telecommunications, ICT, and Digital Economy Sector Strategy 2022-2026, the Bahraini government aims to consolidate its reputation as a regional innovation center while continuing to lure large technology companies. Part of this strategy revolves around making the country an even more attractive destination for gaming companies to cater to the rapidly expanding base of casual gamers, e-sports enthusiasts, and professional players across the Middle East.

In November 2023, the TRA also unveiled the Sixth National Telecommunication Plan (NTP6). The plan outlines the government’s strategic three-year approach and general policies for the telecommunications sector. Bahrain’s objective is to continue to lead the way in ICT and telecommunications infrastructure development within the GCC region and aspire to be among the global top 10 in this sector.

BCG reported that the Middle East boasts the highest gaming penetration in the world, with over 60% of the population identifying as gaming enthusiasts. The audience for live-streaming games is projected to surpass 200 million in 2025, making the Middle East one of the fastest-growing regions for gaming, outpacing even China.

The GCC region is particularly ripe for growth in terms of active gamers and e-sports participants, thanks to its youthful demographic, substantial disposable income, access to affordable high-speed connectivity, and the ongoing development of gaming infrastructure. The market is bound to expand as gaming becomes more mainstream and as more female users and older demographics engage in gaming.

Statista predicts that the gaming industry in Bahrain (including in-game ads and live streaming) will generate over $38 million in 2023 and grow to over $53 million by 2027. Mobile games constitute the largest segment, with a market value nearing $12 million in 2023, expected to grow to more than $18 million by 2027. This is driven by the increasing number of players, expected to reach nearly 400,000 users by 2027. 

These figures show that the domestic gaming market in Bahrain is relatively small because of the limited population. That is why the opportunity lies in serving the larger and growing gaming audience in the Middle East and fostering a local gaming ecosystem that can scale up to serve the region.

However, Bahrain faces stiff competition from its neighbors seeking to diversify their economies through digital services. For example, Saudi Arabia invested in major gaming studios such as Capcom and Activision Blizzard via the Public Investment Fund (PIF), its sovereign fund, and has a national gaming and e-sports strategy. U.A.E. encourages global gaming producers to establish a local presence and hosts major game tournaments and events.

Bahrain should leverage its unique advantages, such as its advanced connectivity infrastructure, skilled workforce, and favorable business environment. Its track record as a technology incubator can also position it as an ideal place to test new ideas, technologies, monetization models, and regulations to support innovative gaming services.

Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.

5G

About the Author

Karim Yaici

Ookla Research™ Articles
| December 13, 2023

Ookla’s Take on Telco Trends in 2024

Global Speeds

The year 2024 is anticipated to be another challenging year as the world continues to struggle with economic downturns, political unrest, and military conflicts. Despite this, digital transformation is making strides in various sectors, leading to greater efficiency, innovation, and the emergence of new business models. There is also a continued focus on sustainability and addressing climate change, as well as enhancing the adaptability and resilience of supply chains. Given this context, we have compiled some predictions for what we can expect in 2024 across a number of themes:

Future Ready Connectivity

5G rollout continues but user satisfaction and profitability miss the mark

The pace of 5G rollout remains robust, reaching 1.4 billion subscriptions globally, according to Ericsson’s latest Mobility Report. However, most of 5G today isn’t ‘true 5G’ as the majority of 5G networks have been deployed in non-standalone (NSA) mode, meaning they rely on a 4G LTE network core. Although 5G performance has shown improvement in 2023, not all consumers are satisfied with it. According to Speedtest Intelligence® Q3 2023 data, the global median 5G download speeds were 7.37 times faster than 4G (203.04 Mbps compared to 27.51 Mbps), and uplink was 2.3 times faster (18.93 Mbps compared to 8.21 Mbps). 

However, 5G latency failed to impress, with global median 5G multi-server latency at 44 ms compared to 52 ms for 4G, showing a mere 1% year-on-year improvement. Telecom operators have invested heavily in 5G infrastructure, but they find it challenging to recover these investments. Without new value-added services that use 5G bandwidth, consumer sentiment looks bleak, with the Net Promoter Score (NPS) for 5G falling in mature markets. The challenge for the 5G industry in the year ahead will be to find ways to monetize 5G beyond Fixed Wireless Access (FWA) use cases and to support investment into standalone (SA) 5G as the industry readies for 5G Advanced ahead of the 6G era. 

Phasing out legacy networks for spectrum efficiency 

As 5G takes center stage, legacy networks such as 2G and 3G will gradually fade away. Similarly, the copper switch-off will continue. As 4G LTE and 5G technologies are much more efficient in terms of spectrum, network operators are phasing out their legacy networks. This move is motivated by freeing up spectrum and refarming it to deliver faster, more advanced, and more efficient networks. In our recent webinar, we shared how operators can use Ookla Cell Analytics™ to identify areas with high dependency on 3G networks, where consumers use older devices, and locations in need of improved 4G coverage. In 2024, operators in Europe and APAC, in particular, will continue to migrate customers away from 3G as they witness a decline in network traffic over 3G and seek to achieve efficiency gains and Capex reduction. 

Private networks steadily carry on

Private mobile networks have become increasingly important for organizations with growing data and security needs as they cater to their specific Industry 4.0 goals. As enterprises of all shapes and sizes increasingly rely on data-intensive applications and IoT devices, legacy networks may struggle to keep up with the growing demand. WiFi and 5G technologies complement each other in modern enterprise networks, with 5G adding a new dynamic to replace legacy network functions where greater flexibility is required. GSA has recognised 1,279 customers deploying private mobile networks in Q3 2023, of which 45% using 5G. .3GPP Release 16 of 5G New Radio (NR) supports a wider set of industrial IoT use cases which should come to the fore in 2024 as more industrial 5G-ready devices that use chipsets based on the Release 16 standards enter the market. Moreover, the industry is already discussing NR Reduced Capability (RedCap), which is specifically designed for devices that do not require the full capabilities of 5G to further enhance cost efficiency and offer precise positioning. Those enterprises that base their networking strategy on problem-solving are well-positioned to meet their objectives no matter the technology they choose. 

Telco Evolution

5G SA is still at the Proof of Technology stage

Although 5G Standalone represents the true potential of 5G, its rollout has been slow due to the extensive investments required and a challenging macroeconomic environment. As of October 2023, only 7% of global mobile network operators (43 operators) in 29 counties have launched 5G SA networks. On the public network side, early network performance data from RootMetrics® indicates that 5G SA outperforms its NSA 5G counterpart across various metrics, including latency and time to start playing video and start the file download. However, speeds remain similar due to identical NR bandwidth. In 2023, the focus was on demonstrating the power of 5G SA, including network slicing, through demos and proof-of-concepts. The crucial task for operators now is to translate these promising developments from controlled environments like laboratories and testing into real-world commercialization. 

Open RAN faces a challenging year ahead

Beyond continued questions on its performance and limited traction beyond greenfield networks, there is growing concern over how open Open RAN will really become. Industry skeptics point to solving interoperability challenges across hardware and software stacks, slowing down its progress and adding to implementation timelines. AT&T has recently outlined a plan where 70% of its wireless network traffic will flow across open-capable platforms by 2026. The company plans to start fully integrated Open RAN sites in collaboration with Ericsson and Fujitsu starting in 2024. AT&T also plans to ramp up its Open RAN deployments from 2025 using technology from multiple suppliers, signifying a move away from closed proprietary systems. This move highlights the fact that, indeed, the industry’s direction of travel continues to be virtualizing network functions as they allow for greater flexibility, scalability, and cost-efficiency in network operations.  

GenAI capturing attention

GenAI, short for Generative AI, like ChatGPT, has seen recently increased acceptance, particularly during 2023. Telecom operators can benefit from using GenAI in various ways, such as optimizing and managing their network without human intervention (zero-touch network management). When implementing GenAI, telecom operators usually follow a phased approach. They start by experimenting with GenAI for internal processes, such as marketing tasks like creating promotional content or analyzing market trends. After successfully implementing and experimenting with internal processes, telecom operators can gradually introduce GenAI into customer-facing functions. For instance, GenAI could automate customer support, offer personalized service recommendations, or manage network aspects based on customer usage patterns. 2024, however, will bring a degree of scrutiny. As the capabilities of Generative AI continue to expand, there will likely be an increase in calls for tighter regulation due to concerns about accuracy and potential harm. Industries, including telecom, must navigate these regulatory challenges and use GenAI responsibly. 

Customer Impact

Cloud gaming market bounces back after a brief hitch

Mobile cloud gaming provides an accessible alternative for casual gamers who cannot afford or do not have access to a dedicated game console. By eliminating the cost barrier, it considerably expands the addressable market for gaming services. It allows for direct monetization and presents opportunities to generate revenue through advertising. Recognizing this potential, Samsung could launch its cloud gaming service in Q1 2024 to reach over 1 billion handset and tablet users worldwide. Netflix also started testing its cloud gaming service in 2023, targeting casual gamers on larger screens with nearly 250 million paying subscribers to its video streaming services in Q3 2023. The adoption of cloud gaming services will stimulate the demand for high-speed and low-latency connectivity at home and on the go. Operators can also leverage their edge computing capabilities and connectivity infrastructure to deliver an immersive and lag-free gaming experience.

Connectivity for All

Satellite technology coming of age

Globally, satellite already plays an important role in providing network backhaul for 2G, 3G, and 4G technologies in rural and remote areas while also connecting a range of enterprise verticals such as logistics. Starlink, which uses Low Earth Orbit (LEO) satellites, has proven that it performs better than GEO satellites and offers a viable alternative in locations where terrestrial networks aren’t present. Despite Qualcomm and Iridium terminating their partnership, the excitement around satellite will continue in 2024 and we anticipate greater terrestrial and non-terrestrial network (NTN) integration. We also expect more partnerships between satellite providers and telecom operators to build a seamless and robust communication infrastructure that can address connectivity challenges in underserved regions. 

Monetizing 5G through FWA

Fixed Wireless Access (FWA) continues to be a poster child for 5G, as it is one of the only ways carriers have found to monetize 5G separately, leading many operators to pursue FWA actively as part of their 5G strategies. According to Ericsson, there are 121 service providers offering FWA services over 5G, representing 50% of all FWA service providers. FWA provides an opportunity for telecom operators to serve rural locations better and offer an alternative for customers dissatisfied with cable or other incumbent broadband providers. Operators leverage FWA as a part of their 5G monetization strategy, and as Verizon put it “It’s simple. It’s plug-in and go. And that resonates with customers”.

Navigating fair share and regulatory horizons 

With the threat landscape and communication networks evolving, governments and regulatory bodies need to keep up with the rapid advancements in telecommunications. The ongoing “fair share” debate centers around how networks are funded and the contributions of different entities toward telecom network costs. The European Union is discussing the contributions of Big Tech companies to the costs of the telecom networks they benefit from, while in the United States, a similar debate centers around net neutrality, financial contributions for network infrastructure, and how to ensure a level playing field for various stakeholders in the telecom space. In 2023, Ookla was actively involved in discussing best practices for ensuring digital transformation and connectivity for all in the APAC region, Central Asia, and Europe. Our data and analysis have shown that regulatory support has been fundamental in promoting the growth of 4G in Africa and informing policy decisions across the Middle East and North Africa. Looking ahead, we will continue to lend a hand in shaping the digital future, offering insights and expertise to foster connectivity, navigate policy decisions, and propel global telecommunications into new and exciting territories. 

Ookla will be at MWC Barcelona 2024 – visit us at our Stand 2I28 in Hall 2 to talk with us about telco trends. In the meantime, if you’re interested to find out more about Ookla Speedtest Intelligence and its wealth of fixed and mobile consumer-initiated data and insights, please get in touch.

Ookla retains ownership of this article including all of the intellectual property rights, data, content graphs and analysis. This article may not be quoted, reproduced, distributed or published for any commercial purpose without prior consent. Members of the press and others using the findings in this article for non-commercial purposes are welcome to publicly share and link to report information with attribution to Ookla.

Global Speeds
5G
Tech Insights

About the Author

Sylwia Kechiche