5G Standalone deployment globally: Insights from leading markets

There is clear disparity in the deployment of 5G SA cores between markets globally, so what do the factors motivating those that have embraced the technology tell us about the state of the rollout as a whole?

What is 5G Standalone (SA)?

The 5G Standalone (SA) core, as opposed to the 5G Non-standalone (NSA) core, is the true 5G network core. It is cloud-native by design and built upon modular service-based architecture (SBA), enabling the provision of services and functions such as network slicing, Ultra-Reliable Low-Latency Communications (URLLC) and enhanced Machine-Type Communications (eMTC, i.e. massive IoT).

Whilst 5G SA unlocks a suite of innovative services, the pace of deployments globally has fallen far behind initial expectations. This is a point we highlighted in our recent Telco Cloud Deployment Tracker update, where we signalled that the vast majority of 5G Standalone deployments expected for 2023 had yet to come to fruition.

This therefore calls into question the significance of the deployments that have occurred. What economic or strategic factors drove these 5G SA deployments, and why are other markets yet to follow in the same fashion?

Global 5G Standalone Deployments: A Visualisation

To better illustrate the variations in 5G SA deployments across global markets, and indeed the slow pace of deployment, we have mapped the evolution of 5G NSA and 5G SA deployments from June 2018 to September 2023 in Figure 1. The colour of a given country within the graph illustrates the proportion of mobile operators in the country who have deployed either a 5G NSA or SA core. An increasing gradient of blue is used to illustrate the proportion of operators who have launched 5G NSA. Then, when an operator in any country has deployed a 5G SA core, an increasing gradient of red is used to illustrate the proportion of operators in that country that have launched 5G SA. The graph utilises data from our Telco Cloud Deployment Tracker, which is built upon publicly available information. For simplicity we have counted deployments of converged 5G NSA/SA cores as a 5G SA deployment.

Figure 1: Where has 5G Standalone been deployed globally? June 2018 – September 2023

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Where has 5G SA been deployed?

The current picture of 5G SA deployments, as illustrated by Figure 1, is one that is concentrated within the largest economies. Indeed, the six largest economies (by nominal GDP) have deployed 5G SA, with deployments in these countries encompassing the majority of 5G SA core deployments worldwide to date. As of September 2023, five of the G7 countries (excluding France and Italy) and four of the BRICS countries (excluding Russia) have initiated the 5G SA rollout. Elsewhere, it is other technologically advanced countries that have deployed 5G SA cores, such as South Korea, Finland, and Norway. Therefore, and perhaps unsurprisingly, it is the largest telecoms markets globally where 5G SA deployment has commenced.

However, there is variance in the extent to which operators have embraced 5G SA across these advanced economies. 5G SA is more widespread amongst APAC operators, with over 60% of operators in countries such as China, South Korea, and Japan having deployed 5G Standalone (SA) cores cores of September 2023.

On the other hand, a contrasting landscape is observed in Latin America, Africa, and smaller European economies, where 5G NSA remains prevalent.

This picture of global 5G SA deployments prompts the question of what is driving the 5G SA rollout in these advanced economies, and why APAC is the leader in this regard.

Creating Value with 5G Standalone in APAC

A key differentiator motivating the greater adoption of 5G SA in the APAC region is the consumer market’s enthusiasm for the pure connectivity benefits 5G SA yields. Whilst many of the ‘killer’ 5G SA use cases are not readily available commercially, within these domestic markets consumers engage in activities where high-speed, low-latency, mobile connectivity is desirable.

The APAC region has a substantial appetite for gaming – a fact illustrated by the debut of eSports as an official medal event in the recent Asian Games in Hangzhou. A smooth gaming experience demands premium connectivity, and the fact that the APAC region is home to the top four countries in terms of average time spent gaming per week (China, Vietnam, India, and Indonesia) contributes to the drive of telcos to deploy 5G SA infrastructure.

Likewise, the demand for AR and VR has solidified in the APAC region; according to the IDC, spending on AR and VR in the APAC region (excluding Japan) will reach $16.6 billion by 2026 at a CAGR of 42.4%. Therefore, telcos clearly perceive an opportunity to capitalise on this consumer desire for premium connectivity through the rollout of 5G SA.

Enterprise Innovations with 5G Standalone

Moreover, from an enterprise perspective, many telcos operating in APAC have illustrated how 5G SA can be leveraged to create innovative solutions. For example, in 2021, China Mobile collaborated with Zhejiang Seaport Group to bring 5G-enabled container trucks to the Ningbo-Zhoushan port. This use case provided enhanced fleet management and analytics for the port operator, whilst also greatly improving worker safety. As another example, in 2022, Singtel partnered with healthcare services firm Zuellig Pharma to deploy a stocktaking solution utilising 5G-enabled drones. Ultimately, they found that this solution boosted the speed of inventory counting by nine times. Therefore, in implementing successful 5G SA industrial use cases, telcos have confirmed the strong potential of the technology, motivating its deployment by operators across the region.

Figure 2: 5G-enabled container trucks at Ningbo-Zhoushan port

Image showcasing 5G-enabled container trucks at Ningbo-Zhoushan port, a use case of 5G Standalone technology enhancing fleet management and worker safety.

 

Fixed Wireless Access (FWA) and 5G Standalone Services

Fixed Wireless Access (FWA) likewise constitutes a key solution 5G SA can support, with many telcos in Europe and North America starting to launch these services commercially. Examples in Europe include Telia Finland, which in 2022 introduced a commercial, 5G SA-based FWA home broadband service; whilst in North America, AT&T recently launched FWA services based on its 5G SA core as part of its ‘Internet Air’ offering. The 5G SA-based URLLC capabilities are particularly valuable for delivering ultrafast broadband in rural areas, given the longer distances and varied terrain the signals need to traverse. Accordingly, FWA is one of the few obvious use cases for 5G SA that is becoming competitive.

However, whilst 5G SA is currently adding value in these domains, a core influence for telcos in deploying this infrastructure is to prepare for the next generation of use cases. Innovative services such as network slicing or massive IoT have the potential to yield substantial commercial value across a wide range of activities, including manufacturing and live events. Therefore, telcos must be prepared to deploy these services once demand for them is established, by implementing the necessary infrastructure today. 5G SA likewise represents an important milestone in, and catalyst for, the organisational transition telcos have embarked on in becoming cloud-native. STL Partners explores why telcos must accelerate deployments of 5G SA cores in our report, 5G standalone (SA) core: Why and how telcos should keep going.

Looking Forward: 5G Standalone Deployment’s Long-Term Impact

As of today, 5G SA has not yet been established as a technology capable of generating significant ROI in the short-to-medium term. Deployments to date are largely contingent on the domestic consumer appetite for premium mobile connectivity, and in any case these services are not yet demanded by the majority of the consumer market.

Ultimately, 5G SA remains a longer-term investment for telcos, with the key use cases it enables yet to become widely available. However, this should not dilute the ambition of telcos. Widespread demand for 5G SA is a question of when not if, and telcos in the coming decade will need to leverage this technology to stay competitive within the industry.

George Glanville

George Glanville

George Glanville

Research Analyst

George is an analyst at STL Partners, with experience working across a diverse range of topic areas, including 5G, open RAN, telco enablement and gaming. He specialises in consumer services and network innovation, contributing to reports, articles and tools within both of these practice areas. George joined STL Partners after obtaining a BSc in Economics from Bristol University.

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