Part of the challenge of 5G, as was the case for 4G and 3G before it, is the creation or discovery of products that do not yet exist, using technologies that might not fully exist, solving problems we possibly have not identified. Internet of things nicely encapsulates all that.
Sensors and analytics will be deployed to provide value we cannot now capture, using network elements not yet fully commercialized, creating new revenue sources for a variety of ecosystem contributors.
The point is that contingency has been part of the reality for 3G and 4G. Some level of uncertainty about what might develop is hardly new for 5G.
On the other hand, since end user bandwidth demand increases steadily, the bottom line justification for 3G, 4G or 5G might well be said to be that each is an answer for the problem of supplying ever-more bandwidth at ever lower costs per bit.
Over time, new use cases and revenue drivers emerge, even if they cannot precisely be quantified at the start. Text messaging came as a surprise to virtually everyone in the 2G era.
The popularity of mobile internet and mobile email--compared to other use cases--was something of a surprise in the 3G era. Many thought more-exotic use cases would develop.
The use of entertainment video on 4G networks has dominated bandwidth growth on that platform.
The point is that each successive next-generation network can be justified purely for bandwidth supply, even if somewhat unique use cases did develop in each era.
Looking only at data use cases, in the 2G era mobile was a reasonable choice only for messaging. In the 3G era, mobile internet access improved, but Wi-Fi still offered higher throughput. Consumer web surfing became a tolerable experience, but video streaming remained a challenge.
The 4G era was the first where mobile user experience of web applications actually became comparable to fixed network experience, for most apps, including streaming video.
The Long Term Evolution 4G network also became the first mobile network to routinely offer higher performance than Wi-Fi.
In the coming 5G era, the mobile network will, in many cases, become a fully-functional substitute for the fixed network, for all applications.
In the 3G era, Wi-Fi’s main attractions were better performance and better value (mobile users did not incur mobile usage charges). In the 4G era, this has changed.
For users with very-large or unlimited usage plans, there is no advantage to switching to Wi-Fi for access, either in terms of performance or cost. Also, 4G access tends to outperform Wi-Fi, so there is no advantage to switching to Wi-Fi, in terms of user experience.
In the 5G era, at least some 5G fixed wireless services will be full and direct substitutes for fixed network cabled access. At the same time, mobile access will likely continue to offer higher value for internet access, in more use cases, compared to alternatives such as Wi-Fi.
The 5G era also is likely to be the first where the business model changes again. In the 2G era, voice and text messaging drove value and revenue. In the 3G era, mobile internet access emerged as the growth driver.
In the 4G era, streaming video was the revenue driver, largely because video drives so much data usage, shaping demand for both larger-usage plans and unlimited plans or video-exempt plans.
In the 5G era, incremental revenue is likely to shift from consumer to enterprise apps, returning to a pattern first seen in 1G and early 2G, where business accounts drove growth.
What will be different in the 5G era is that the incremental new accounts will be driven by enterprises and organizations deploying sensors, not human users. Those internet of things and machine-to-machine use cases will not be based primarily on human users, their smartphones, tablets, internet TVs or PCs.
The point is that each generation of mobile networks has had different and new revenue growth drivers. The coming 5G network will not be any different, in that sense.
What will be new is a shift to incremental growth driven by non-human use cases.
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