What Will Drive Connectivity Industry Revenue in 2030?

What really has the potential to drive global connectivity service provider revenues? IoT, private networks, edge computing? Probably not. The bulk of revenue is earned by just a few ubiquitous services: mobile phone subscriptions, mobile internet access and home broadband. 

All the new services together will amount to as little as five percent of total revenues globally by 2030. Instead, performance will depend on revenue per unit trends. 

Assume the following about connectivity industry saturation: 

• mobile subscriptions reach 96 percent by 2025

• mobile internet use reaches 75 percent by 2025

• ARPU is about   10.50 per line by 2025

• Revenue growth rate is about two percent annually from 2020 to 2025.

Assume that mobility services drive about 80 percent of total industry revenues. What are the odds the industry can discover or create new growth drivers big enough to offset the “end of growth” in the core mobility area?

For the sake of argument, assume new products can be developed around 5G, such as network slicing; internet of things connections and edge computing connectivity revenues. How much incremental growth can those products provide? 

Not so much. Edge computing connectivity revenues likely will be something like an SD-WAN-sized revenue stream. That is not going to significantly move the revenue needle for most service providers, if any. 

One might say the same about private networks. IoT connectivity revenues should be more relevant, perhaps adding double-digit  s of dollars of revenue by about 2025. Fixed wireless might be a new source in about the same range, by about the same time. 

To 2030, one might argue, global service provider revenue will continue to be driven by mobile subscriptions, home broadband and mobile data. 

Year	Revenue   $B	Mobile Subscriptions	Mobile Data	Home Broadband	IoT Connections	Private Network Services	Edge Computing Connectivity
2023	1,805.61	1,053.24	458.71	215.71	49.04	28.02	20.60
2024	1,908.26	1,104.52	485.66	224.10	52.38	30.23	22.01
2025	2,018.36	1,158.84	514.03	233.21	56.10	32.70	23.52
2026	2,136.21	1,216.23	543.72	242.94	60.12	35.42	25.12
2027	2,262.11	1,276.69	574.63	253.29	64.45	38.41	26.82
2028	2,406.76	1,340.25	606.68	264.27	69.11	41.68	28.63
2029	2,559.45	1,406.91	640.00	275.88	74.12	45.24	30.57
2030	2,874.76	1,476.69	674.52	288.10	79.47	49.10	32.57

Some will be more optimistic about service provider ability to assume new roles in cloud computing as a service, or edge computing as a service, or IoT system integration or management of private networks as a service. If so, contributions from those sources will be larger. 

But in this analysis, IoT connections, managed private networks and edge computing connectivity revenue only collectively manage to represent about five percent of total revenue. 

The number of mobile subscriptions, average revenue per unit, fixed and mobile internet access overwhelmingly determine outcomes. 

None of that is terribly troublesome unless service providers are unsuccessful at maintaining or boosting ARPU, assuming connectivity really is “essential,” as most believe. If so, subscription volume will not be the key issue. Revenue per unit is going to make the difference. 

--------------------