5G Revenue is Right Where the Revenue Already Is, With One Exception

There are many reasons why mobile operators have worried about the 5G business model. They might prefer not to make the capital investment; they recently upgraded national 4G networks; average revenue per account might not increase; new spectrum licenses are expensive; costly small cell networks will have to be built; new revenue sources will be few and far between, to begin.

Though mobile operators might not like the frank answer to the question “where is the 5G revenue?,” the answer, for the most part, right now, is “right where it already is.” Which is simply to say that the bulk of “5G” revenue, with one exception, comes from existing or new customers switching from 4G to 5G.

The one exception is fixed wireless, which is the first new revenue source possible with 5G than was not so common with 4G, though that source did exist. Eventually, new sources will develop. The likely candidates include network slices, private networks, edge computing or some involvement in internet of things ecosystems. 

But all that will take time. 

source: Juniper Research

The other issue is that some markets have more revenue potential because average revenue per account is higher than the global average. The U.S. market and likely Canada are in that category. As Juniper Research argues, 5G revenue, as a proportion of the global total, is greater than 5G accounts might suggest. The other region where 5G revenue should exceed global norms is Western Europe, according to Juniper Research estimates. 

source: Juniper Research

Of course, there is that other next-generation network: the fixed network. But as important as home broadband might be for revenue earned by most fixed network service providers, it is not a product with a high growth rate. In fact, growth rates are slowing, according to Point Topic. Where growth rates were in the two-percent range in 2021, they have dropped to about 1.3 percent in 2022. 

source: Point Topic 

The causes are several. The war in Ukraine has depressed growth in the Eastern Europe region. Saturation is an issue in Western Europe and North America. Economic issues might be tempering net additions in other markets. 

In the mobile markets, growth can be measured in several ways: total accounts or subscribers; growth of 4G or 5G; growth of mobile broadband accounts. 4G and 5G growth rates are higher than global mobile account growth rates, which might run about three percent per year. .