Saturday, 28 November 2020

“Highly resilient” 5G revenue shrugs off COVID to reach $5bn in 2020

by Harry Baldock, Total Telecom
Monday 19 October 20

Despite a tumultuous year, 5G revenue is growing steadily and expected to boom in the next five years, according to a study from Juniper Research

While there is never a good time for an international crisis, for many operators the emergence of the coronavirus pandemic could not have come at a worse time. At the start of 2020, many service providers were beginning their rollout of 5G technology, an incredibly costly process which saw the industry racing to claim coverage milestones around the world…

While there is never a good time for an international crisis, for many operators the emergence of the coronavirus pandemic could not have come at a worse time. At the start of 2020, many service providers were beginning their rollout of 5G technology, an incredibly costly process which saw the industry racing to claim coverage milestones around the world. The onset of the virus meant a new wave of logistical issues, not least of which its impact on 5G revenue generation; in a stretched economy, could 5G really live up to its promises and deliver significant revenue?
 
Now, a recent study by Juniper Research is suggesting that 5G revenues have in fact been “highly resilient” to the negative impact of the pandemic, and instead are continuing to rise steadily. The report found that operator billed revenue from 5G connections will reach $5 billion by the end of 2020 and will continue to see immense growth, reaching $357 billion by 2025.
 
By this time, 5G will represent 44% of operators’ revenue worldwide, as customers begin to migrate en masse from 4G networks. Juniper Research estimates that the total 5G connections will be greater than 1.5 billion in 2025, with each 5G connection netting the operator 250% more revenue than an average connection. However, for this to be true operators must apply premium pricing to 5G, something which some operators, like Rakuten, have opted against, at least for their initial deployments this year.
 
Part of the 5G revenue’s shown resilience comes as a result of operators quickly modifying their rollout strategies in the wake of the pandemic, but maintaining this momentum over the coming years will be no easy task. The research estimates that emerging data-intensive use cases will generate a 270% growth in data traffic by 2025, making network virtualisation vital to facilitating this growth.
 
With competition in 5G set to be fierce, failure to transform network architecture in the face of booming traffic could lead to reduced functionality and see customers quickly head elsewhere. 
 
“Operators will compete on 5G capabilities, in terms of bandwidth and latency. A lesser 5G offering will lead to user churn to competing networks and missed opportunities in operators’ fastest-growing revenue stream,” said study author Sam Barker.
 
 
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