Friday, June 23, 2017

Will Faster 5G Internet Access Boost Revenue?

source: Nokia (Alcatel-Lucent)
At the moment, though the new use cases for 5G are commonly said to be "enhanced mobile broadband, internet of things and low-latency applications, there are some obvious revenue issues.

Consider "enhanced mobile broadband." Yes, faster is better. And 5G promises speeds an order of magnitude or perhaps two orders of magnitude faster than today's 4G. But will 5G produce an order of magnitude more revenue? Nobody believes that.

Twice as much revenue? Maybe. For some customers. But, for the most part, internet access prices have fallen over time, not grown, despite advances in speed (capacity). 

Also, in many--perhaps most--markets, 5G subscriptions will replace 4G subscriptions, not add to the base. Some might hope for higher average revenue per 5G account. That might happen, initially. Over time, however, ARPU will fall. 
5G Technology 5G Networks

The point: ubiquitous gigabit speeds might not boost average revenue per account as much as you think. 

The other angle is that as billions of new internet of things or low-latency use cases develop, the ARPU is going to be an order of magnitude lower, per subscription, than human-oriented mobile internet. 


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