At least for some service providers in the U.S. market, 5G might actually represent very little business risk. Where many had feared 5G capex would be quite high, it now appears that, at least for Verizon and AT&T, the incremental capex will be quite manageable, and possibly even slight. Verizon itself believes it might even be possible to deploy 5G for no increase in capes.
That changes the risk profile dramatically. Near term, 5G then becomes a way to spot deploy capacity to reinforce 4G network demand. Longer term, flat capex, within existing budgets, also means service providers can wait longer to see how new applications and revenues develop.
That is a vital and perhaps unexpected outcome. The biggest 5G risk comes from scenarios where higher or much-higher capex is required, but incremental revenues are slight or non-existent.
Containing capex within normal budgets removes nearly all that risk, and simply substitutes the 5G network for reinforcements of the 4G network.
On the other hand, the 5G platform has to be in place if many of the new use cases and revenue drivers are to flourish.
Internet of things, for example, widely is expected to drive the bulk of incremental new revenue sources. But most of the incremental new revenue is expected to develop on the enterprise side of the business, not the consumer side, even if consumer apps become widely used.
Business-to-business apps might represent as much as 70 percent of the value of internet of things apps, say researchers at McKinsey.
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