As important as internet of things, edge computing or private networks might be for mobile operators, revenue gains from basic phone subscriptions are far more important. In developing markets "more users" will drive results. In developed markets most of the net gains will come from taking market share.
It is difficult to quantify how much revenue 5G actually creates on a “net” basis, as up to 80 percent of 5G subscription revenues come from an existing account upgrading from 4G. It is possible there is some incremental revenue change, but since the upgrade to 5G also cannibalizes an existing 4G connection, only the revenue delta can be attributed to 5G.
Most observers might agree that perhaps 80 percent of all “new” 5G accounts represent upgrades by current customers.
Possibly 20 percent of 5G accounts are new signups by customers a mobile service provider did not have before. In some cases such signups represent “new” accounts from customers who did not previously have mobile service. But perhaps most of the “new” 5G accounts are customers ported over from other service providers.
So particular service providers might gain, but the overall market might see much less net change.
But 5G fixed wireless, some IoT device connections, some amount of mobile-operator-supplied 5G private networks and some amount of edge computing revenue are better examples of incrementally-new revenue sources that might not have existed before 5G.
The other qualification is that 4G is used to support private networks, IoT connections and some edge computing use cases. So the 5G contribution is less than the revenue earned using all mobile platforms and sales channels.
Also, global estimates vary by as much as an order of magnitude, especially in early years. But one observation most might agree upon is that fixed wireless has been the surprise 5G revenue generator. At the moment, fixed wireless revenue likely surpassed IoT connection revenue, mobile operator-supplied private networks and edge computing.
Still, all of those sources are dwarfed by “new” 5G connections, assuming 20 percent of 5G accounts signed by any mobile operator are incremental new accounts. Assume 2024 net 5G account additions of 300 million accounts. Assume 20 percent are “net new” account additions.
Assume each of those accounts generates $120 in annual revenue. That implies $72 billion in revenue. The new revenue sources are welcome, but also dwarfed by revenue changes from subscription volume and average revenue per account.
The point is that mobile operators earn most of their revenue from basic phone subscriptions and device sales.
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