Booming online shopping and remote working will fuel record demand for mobile and
internet services. But the pandemic’s economic fallout will stop the number of mobile
and broadband subscribers rising by more than about 3% from pre-covid levels.
American and Chinese operators will focus on expanding and monetising their fledgling
5G coverage. Europe will play catch-up, rushing to launch 5G services after dragging its
feet in 2020 over whether to use Huawei’s technology. Meanwhile, Latin America, Africa
and South Asia will be busy upgrading from 2G and 3G to high-speed 4G LTE. Mobile
revenues will rise more quickly in developing countries than developed ones, climbing
by 2%, according to GSMA, an industry body.
The handset market will fragment further. Huawei will be hurt by America’s ban on
using its technology. The Chinese company’s loss will not necessarily be Apple’s gain.
South Korea’s titan, Samsung, is well placed to thrive if it can win over new users with
affordable 5G phones. Other Chinese players (Xiaomi, Oppo and Vivo) should make
strides and low-cost makers such as Transsion (China, again) and VinSmart (Vietnam)
will claim new ground in Africa and Asia.
Sino-American tensions, Brexit and slowing economic growth will prod the EU to loosen
its competition policies. The overturning in 2020 of a ban on a merger between O2 and
Three will encourage other post-pandemic link-ups. Watch for consolidation in
countries with more than three operators, such as Spain.
TO WATCH: Chipping Huawei. Once America’s sanctions sever supplies of crucial chips
for Huawei’s smartphones, its handset shipments could plummet by 75% in 2021.
Huawei is set to lose its status as the second-largest smartphone vendor, but don’t write
it off. It has other business lines and a huge domestic market to fall back on—plus a big
R&D budget to push for self-reliance in chipmaking.