What will happen to 5G, if wireless revenue will peak in 2021?

Wireless service revenue of global mobile operators will peak in 2021 at $881 billion, registering 3 percent growth from 2018 — even before the emergence of 5G, according to Strategy Analytics report.

The research report indicates that the 5G presence will not do much to wireless operator revenues — adding just 10 percent more to connectivity revenue in 2023, posing big threats to aspirations of telecom equipment makers and telecom operators in the 5G space.

The good news is that the number of user-linked subscriptions to wireless services will grow to 9 billion by 2023 against 7.7 billion today. The bad news is that this 9 billion will include subscriptions on 2G, 3G, 4G and 5G networks.

User-linked mobile 5G connections will grow from 5 million in 2019 to 577 million in 2023 (excluding fixed wireless applications and industrial IOT). These will account for 10 percent of connectivity revenue in 2023.

5G subscriber base is not growing in the initial phase because of the lack of availability of cost effective 5G smartphones. Plus, global telecom operators will struggle to find strong use cases from 5G services.

The report shows that 5G operators such as Verizon, China Mobile, AT&T, among others, need to depend upon enterprise business for ensuring more revenue streams from their 5G investment. 5G spectrum price will be the main factor that will determine the success of 5G business globally.
5G forecast by Strategy Analytics
Prior to the launch of 5G services, there is considerable time for 4G LTE platforms to evolve through LTE-Advanced and LTE-Advanced Pro technologies. The report indicates that mobile service providers can depend on mobile data revenue for some more time to grow their business.

The report said LTE-Advanced and LTE-Advanced Pro technologies will account for more than half of all 4G LTE connections by mid-2018 and hit 2 billion connections by year end. Even with 5G, many devices will still rely on 4G for roaming outside of 5G coverage areas. There is no optimism among 5G stakeholders at present as 5G capable smartphones will be launched in 2019 only.
5G Capex spend forecast
The above chart prepared by Technology Business Review (TBR) indicates about the 5G capex growth till 2022.

5G investment

Over 85 percent of communication service provider (CSP) 5G Capex spend will be in the U.S., China, Japan and South Korea through 2020, TBR said.

A group of operators in these countries have made it a strategic priority to deploy 5G at scale, with the preliminary focus on the fixed wireless broadband and mobile broadband use cases, and IoT to follow.

Global mobile operators will initially leverage 5G for traditional uses of the network: to provide traditional cellular service and to provide high-speed broadband.

TBR Telecom Senior Analyst Chris Antlitz said: “Fixed wireless is a tool some operators will use to more cost-effectively protect and grow their internet service subscriber bases, while 5G technology will be leveraged for mobility to provide network efficiencies as well as faster data speeds and lower latency.”

4G

Indian telecom operators such as Bharti Airtel, Idea Cellular, Vodafone and Reliance Jio are spending on 4G networks for their growth. China Mobile and China Unicom focus on 4G and reduced reliance on 3G for revenue growth.

Due to competitive pressure in countries such as France, India, and the USA, wireless service providers are working hard to identify growth opportunities in wireless.

Phil Kendall, director Service Providers and author of the report, said: “The monetization of 4G data traffic has been critical for creating revenue uplift, even in the world’s most mature wireless markets like Finland and Japan, and remains a medium term priority for the industry.”

China in 5G will bring economies of scale to the 5G device market globally, which will be encouraging for operators looking to execute on a clear vision of 5G consumer service opportunities, Susan Welsh de Grimaldo, director, Service Provider Strategies, said.

Stakeholders are looking forward for the support of China to bring down the cost of 5G devices and network equipment to ensure that they can achieve economies of scale from 5G investment.

Baburajan K

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