A new study from Juniper Research argues that growing 5G revenues will offer respite to mobile operators experiencing declining profitability and flagging financial outlooks.
The research forecasts that 5G service revenues will make up 38pc of total operator billed revenues by 2025, despite the anticipated connections only accounting for 14pc of total cellular connections in the same year.
According to the study, annual operator billed revenues from 5G connections will hit $300bn by 2025, a major increase from a forecasted $894m in 2019, the year the new standard is expected to be offered commercially.
Network and pricing optimisation is crucial
While this is positive news, the research warned that mobile operators need to optimise network configuration and re-examine existing pricing strategies to secure a return on their investment.
Considering the variety of IoT devices that will run on the fifth-generation network, pricing must be adjusted based on data usage, device type and required speeds to ensure profitability hits its maximum potential.
Juniper forecasts that the total data traffic generated by 5G connections will reach 955 exabytes annually by 2025, the equivalent to 143bn hours of 4K video streaming. Juniper urged operators to implement technologies that minimise the cost-per-bit of data, including network virtualisation, to provide on-demand network agility for the data-intensive demands of the new connections.
Research author Sam Barker said: “5G for home broadband services will be the biggest driver in growth of cellular traffic after initial launches. By 2025, the average 5G home broadband connection will generate over 430GB of data per month.”
5G R&D spend is set to soar
As well as increasing profits forecasted, Juniper also estimates that cumulative research and development (R&D) spend on the new standard by operators, hardware vendors and public bodies will approach $60bn by the end of 2018. This year alone will see network operators spend close to $30bn on trialling networks in preparation for commercial launches in 2019.
Three UK CEO David Dyson said that the speeds users will enjoy thanks to 5G could outpace fixed-line copper or fibre services on offer at present.
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