It is not hard to find infrastructure supplier surveys suggesting consumers find 5G appealing and will pay more to get it. Nor is it hard to find stories about mobile service providers worried about the business case for 5G.
The concerns will prove entirely misplaced. Since the time of 3G, such concerns about the business model have occurred at some level, every time the next-generation network has been launched. Always, it seems, there are concerns about higher capital investment and payback models.
But nothing ever has prevented the next-generation mobile platform from becoming the dominant platform. All worries aside, each next-generation platform has successfully become the market standard.
Some might point to the fate of WiMAX, but that was a marketplace standard, not a mobile industry standard.
The point is that despite the voiced concern, 5G will succeed. So will 6G, when it comes. And each platform will lead to the creation of new use cases, even if we cannot predict them well, in advance.
The fundamental reason success will happen is that among the key reasons for adopting a next-generation mobile network is the need to keep satisfying end user demand for mobile bandwidth. Though there are a few ways to increase bandwidth, eventually more physical spectrum has to be added.
Service providers can use small cells, better radios, unlicensed spectrum aggregation and refarming of spectrum from older networks. At some point, however, the drive to supply bandwidth at lower cost per bit requires adding new spectrum, and that in turn requires creating the next-generation network.
Retail prices in telecom tend to increase at the rate of gross domestic product growth, or sometimes faster, for content-related products. Beyond that, mobile service providers also come up with bundling and pricing tactics that allow higher prices. That usually is driven by value propositions deemed to resonate with customers, such as unlimited usage plans, device revenues or multi-product bundles.
In the U.S. market, Verizon and AT&T are driving customers toward higher-priced unlimited usage plans, with clear success. Multi-user plans earlier had been a driver of higher average revenue per account. The point is that marketing efforts are created to drive higher ARPU, for 5G as for all other mobile generations.
Also, machine-to-machine sensor connections are steadily becoming a bigger driver of revenue as well.
Fears about 5G are misplaced.
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