Analysts Predict Limited Growth in Connectivity Revenue on 5G
Despite the hype around 5G, Strategy Analytics predicts that wireless service revenue will peak in 2021 at $881 billion, just 3% more than the level forecast for 2018.
The analyst firm says in a new report that 5G adoption will follow a similar path to 4G LTE. By 2023, it forecasts overall wireless subscriptions will reach 9 billion, up from 7.7 billion today. Of those, 5G mobile connections -- those linked to mobile users, rather than fixed or industrial IoT -- will grow to 577 million, up from 5 million in 2019, accounting for 10% of connectivity revenue in 2023.
This forecast comes shortly after the GSMA said that the US will reach 100 million 5G connections by early 2023, although it included fixed connections in its significantly more optimistic forecast. (See GSMA: US Will See Fastest Customer Migration to 5G.)
The tempered revenue expectations come because service providers won't be able to eke out much more revenue from consumers on their already high monthly spending, but are counting on industrial use cases, new services and verticals like autonomous cars, utilities and smart cities to drive fresh revenue.
"With significant service provider focus on 5G, there are many unanswered questions relating to infrastructure costs and deployment strategies, and to how well service providers can unlock new revenue streams beyond basic connectivity services," Susan Welsh de Grimaldo, Strategy Analytics director of Service Provider Strategies, said in a release on the report. "The expected early involvement of China in 5G will, however, bring economies of scale to the 5G device market earlier than we typically see with new network technologies, which will be encouraging for operators looking to execute on a clear vision of 5G consumer service opportunities."
More disheartening -- for consumers at least -- is that many of these devices will still have LTE-like speeds most of the time as they'll fall back to it when roaming outside of 5G coverage areas. The good news, however, is that LTE-Advanced and LTE-Advanced Pro technologies will account for more than half of the LTE devices on the market in 2023, so the speeds will be faster than most experience today.
— Sarah Thomas, Contributing Editor, Telco Transformation
The search giant intends to cut humans out of some of its processes and deal with the strain of massive data usage by using more automation in its network.
AT&T says it is ready to go commercial with 5G having consistently achieved 1Gbit/s speeds on mmWave connections in its trials.
NSF is pledging $100 million over seven years in a public-private partnership to test 5G technologies in real-world scenarios in Salt Lake City and New York City.
A new report from the Australian Competition & Consumer Commission plays up the potential for 5G speeds, suggesting 5G could persuade consumers to give up fixed-line broadband.
More 5G predictions are rolling out as CCS Insights says that the US may be the first to launch 5G, but China will soon dominate it.
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