Tuesday, July 18, 2017

How Big a Gamble are 5G Networks? Big.

Just how big a gamble are 5G networks? Big, according to Juniper Research. “Unlike 4G, there is no discernable use case that will encourage operators to roll out 5G networks,” Juniper says.

Beyond that, in the early going, most of the 5G revenue might well come from customers replacing 4G accounts with 5G, with some revenue lift, but no net increase in subscriptions.

So great is the risk that private investors might not make the move to 5G without subsidies. “Juniper anticipates that increased investment from governmental bodies will be needed to encourage the development of these networks, with the exception of North America.”

Juniper Research forecasts that total operator billed 5G revenues will rise to $269 billion by 2025, from $850 million in 2019, the anticipated first year of services. That represents a 161 percent compound annual growth rate over the first seven years of 5G services.

What that portends, in terms of new service revenues, is unclear, as most of that revenue will come from 4G customers switching to 5G, with no automatic net gain in revenue or accounts.

Juniper “anticipates that the majority of acquired 5G connections will be users upgrading from 4G connections.”  For that reason, Juniper does not expect an increase in the number of the active subscriber information modules (SIMs) from the introduction of 5G networks.

Juniper  predicts that 66 percent of all 5G operator-billed revenues will come from North America the Far East and China by 2025.

At least at first, Juniper believes mobile operators will charge a premium over 4G for 5G services.
Also, early adopters will tend to be those customers who spend the most, each month.

So in  the early years, the actual numbers of connected subscribers will be very low, Juniper suggests.

Those projections, it can be argued, miss the impact of services sold to non-human devices, which many believe represents most of the opportunity for incremental revenue, beyond new opportunities for fixed wireless services.

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