ABI Research predicts that mobile service providers will generate $247 billion in 5G revenues in 2025. That should not come as a terrible surprise. Globally, mobile operators generate revenues about US$1 trillion annually.
By 2025, there might be 1.1 billion 5G connections in service, accounting for 12 percent of total mobile subscriptions, according to the GSMA. If total mobile revenue globally is about $1.3 trillion in 2025, and 5G represents just 12 percent of total revenue, 5G might plausibly generate $156 billion in revenues.
That is a conservative estimate, as 5G is likely to be adopted first by power users in big countries, with spending far higher than the “average” account globally. In fact, a developed market service provider can have average revenue per user an order of magnitude higher than many service providers among the world’s top 20, ranked by total revenue.
The point is that 5G revenue, in the form of mobile subscriptions, is going to cannibalize 4G accounts. Whatever your expectations about “5G” revenue, most of it will take the form of subscriptions that simply replace 4G accounts.
So most “5G” revenue will not represent much net new incremental revenue. But there should be some. In the early going, it likely will be possible for mobile operators to charge some sort of premium for 5G service, compared to 4G.
If the transition from 3G to 4G provides any guidance, the premium might initially be in the range of 20 percent.
No comments:
Post a Comment