5G Capex to grow in Asia Pacific, despite slow take off in India

ABI Research in a report said mobile operators’ 5G Capital Expenditure (Capex) across the Asia Pacific region will increase through 2027 — despite a slow take off in India.
China 5G base stations
5G RAN Capex is expected to plateau from 2024 while investments in 5G Core Network investments will continue to rise through 2027. In all, RAN, Core Network and Backhaul expenditure is expected to reach US$79.5 billion annually by 2027.

Investment in mobile cellular Radio Access Network (RAN) has fuelled the increase in 5G coverage across the Asia Pacific region. China has achieved 98 percent 5G coverage. Korea has achieved 90 percent 5G coverage. Indian telecoms such as Bharti Airtel and Reliance Jio aim that their nationwide 5G coverage will reach 98 percent by 2024.

China’s 5G base stations exceeded 2.31 million in 2022, accounting for 60 percent of the global total, including about 887,000 built in 2022. 5G mobile users reached 561 million, accounting for one third of China’s mobile phone users, according to the Ministry of Industry and Information Technology.

The recent IDC report said 5G continues to grow and will account for 62 percent of smartphones shipped worldwide in 2023, rising to 83 percent by 2027.

“These mobile Capex investments are significant. Operators are seeking to mitigate their infrastructure costs as best they can. Active network sharing is gaining traction in APAC as a number of operators set up joint ventures to roll out coverage or sell off their infrastructure towers to tower management companies,” Sarah Yong, 5G Markets Research Analyst at ABI Research, said.

Chinese government has granted its mobile spectrum in the 700 MHz, 2.6 GHz, 3.5 GHz, and 4.8 GHz bands to operate their 5G networks, as opposed to holding a spectrum allocation auction.  South Korea and Japan follow closely behind.

In their evolution to 6G, these markets are committed to 5G-Advanced and carrying out 6G testbeds. China Mobile, NTT DOCOMO, and SK Telecom are looking to explore both 5G-Advanced deployments and 6G concepts.

India lags other countries in APAC with its 5G deployment and infrastructure developments due to delays with spectrum allocation and network infrastructure construction. End-user data consumption in India stood at 12 Gigabytes (GB) per user per month in 2022.

The adoption of 5G by end users in India has slowed in recent quarters. The affordability of 5G handsets is slowing adoption in India.

In Thailand, the government is driving the adoption of 5G in its Eastern Economic Corridor (EEC) with 5G smart cities, ports, hospitals, and airports being deployed. Thailand displays the potential to be a significant 5G hub for Southeast Asia.

“5G-Advanced will impact the Asia-Pacific region,” said Jake Saunders, VP and Managing Director of ABI Research Asia-Pacific. “5G-Advanced enables a range of policy control and value-added services for the mobile telco – especially in the 5G to Business (5GtoB) sector. We have witnessed several hundred 5GtoB case examples, and the count is rising.”