The 5G business model is not so different from what mobile operators faced when introducing 4G less than a decade ago.
LTE promised new use cases and new revenues. Released commercially in the United States in 2010, carriers expected LTE to provide an immediate boost to smart cities, asset tracking, retail, manufacturing, health care, and many other industries.
That sounds like the promises for 5G as well. One might note that some anticipated new use cases for 3G also sounded an awful lot like what was expected for 4G.
Many assumed that if carriers played an integral role shaping the ecosystems that comprised these use cases, then profits would follow. That is not exactly what happened. To be sure, 4G has enabled capacity growth to match demand, which was driven by application providers.
Mobile operators facing rapid traffic growth from average revenue per user (ARPU) from intense price competition also discovered that most of the financial value of 4G was reaped by app providers.
Basically, 4G provided concrete value as a way of reducing cost per bit. The same thing is going to happen with 5G, even if hopes for incremental revenue eventually will be realized from enterprise use cases and apps dependent on edge computing.
Connectivity service providers could become key suppliers of such edge computing. In consumer markets, 5G will be important partly because it enables faster speeds and lower costs per bit.
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