Paradoxically, some apparently-contradictory statements can all be true. It is argued that “5G will not lift average revenue per user” and also that ARPU will climb. Some argue the revenue lift from 5G will be slight; yet others believe consumer revenue will climb.
That belief is based on slow global revenue growth--despite faster growth in some regions--of about one percent a year, overall. Indeed, some believe global connectivity revenue is near a peak.
Strategy Analytics, for example, predicts that “wireless service revenue will peak in 2021 at US$881 billion, just three percent above the level forecast for 2018.”
Observers believe that 5G mostly displaces 4G, so most “5G” revenue cannibalizes 4G. But 5G also will create new consumer revenue streams.
Some argue 5G revenue will come from new enterprise use cases, and at the same time that consumer revenue still will drive the bulk of revenues.
All of these apparently-contradictory views can be true, simultaneously. Perhaps it will prove generally true that use of 5G networks will not materially boost consumer mobility revenue. On the other hand, other packaging practices--such as offering 5G only on the most-expensive, unlimited access plans--will boost revenue.
In other words, revenue is greater because consumers move to higher-priced plans that include 5G. The direct driver is unlimited usage and other features (including 5G) that come along with such plans.
As has been true for all prior mobile generations, 5G will replace 4G. On a one-for-one basis, resulting in little net revenue change. Still, 5G likely will create some new use cases--with revenue-- around use of virtual reality or augmented reality apps, use of internet of things for home security or in the form of 5G-optimized content services.
In many cases, new access charges might be bundled with the cost of the service or app, or revenue is generated by software as a service or other recurring charges.
And though a majority of total 5G connectivity revenue will come from consumer mobile phone accounts, new use cases are likely to come from enterprise or business-to-business use cases. T-Mobile is introducing new mobile-based business phone services, for example.
AT&T and Verizon supply connected car services. Comcast offers home security that uses connected sensors.
And most observers believe there is revenue upside for connectivity providers in supporting private 4G and private 5G networks, for example, from system design, integration or operation or additional direct connectivity services.
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