One often hears forecasts of 5G revenue, as one used to hear estimates of “4G revenue” or “3G revenue.” Such forecasts must be considered in context, as much of the next-generation platform revenue simply cannibalizes last-generation network revenue. That is especially true in developed markets, where there is little actual account growth.
In most developing markets, the actual incremental impact of 5G will be disguised, as subscriptions continue to grow significantly, as do mobile data accounts. So revenue growth comes from multiple sources, not solely from 5G.
The other “moving part” is that average revenue per user and account is dropping, in most markets. Eventually, in all saturate markets, that will matter, possibly or probably reducing total revenue.
That noted, 5G--it is hoped--will create some amount of incremental new revenue as well. For U.S. mobile operators, the biggest immediate test will be use of 5G to support consumer internet access in fixed mode. The bigger boost in revenue is expected to come from robust internet of things deployments, but that will take some time.
Use of mobile networks for fixed access has not been a viable business case in the past, but will be possible with 5G, in part because speeds will match fixed offers, in part because the cost of supplying “fixed network equivalent usage” will be possible at prices that also are comparable to fixed access prices.
The other attraction is that average revenue per location for a fixed account is virtually always higher than the ARPU for a mobile line, though not for some shared accounts.
The point is that 5G will produce some incremental new revenue, from new sources. But not all 5G revenue is “new.”
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