According to an analyst firm Juniper Research, operator-billed 5G service revenue will reach $315 billion next year.
Seeing as the revenues from 5G services are predicted to reach $195 billion in 2022, that would mark a 60% increase in a single year. The main reason behind this growth appears to be the upgrade of cellular subscriptions to 5G networks, which is understandable considering that operators either don’t charge any premium for 5G or minimise it. Juniper Research estimates that more than 600 million new 5G subscriptions will be created over the next year.
As a result of this accelerated growth, 5G services will represent more than a third (35%) of operators’ total revenue in 2023. It’s noteworthy that the analyst firm has taken into account an anticipated economic downturn next year, expecting the telecoms industry to remain resilient to macroeconomic shocks. That prediction appears justified considering the industry’s robustness against the negative impact of the COVID-19 pandemic.
The report also predicts standalone 5G networks to offer network slicing. This technology can be used to take a ‘slice’ of public 5G infrastructure and offer it to the users of private networks. However, Juniper Research did not include the anticipated amount of revenue to be derived from this opportunity.
According to the research co-author, Olivia Williams, the revenue from consumer connections will continue to be the main driver of 5G operator revenue increase, despite the growth of the Internet of Things. She said that in 2027, more than 95% of 5G connections worldwide will be connected personal devices, including smartphones, tablets, and mobile broadband routers.
Although such rapid growth is seemingly great news, it doesn’t translate into significant returns for the telecoms industry from its 5G investments. Free upgrades of subscriber contracts do not drive any new revenue. According to recent research carried out by another analyst house, Omdia, average revenue per user will keep decreasing in spite of all the progress, leaving the question of how to monetise 5G unanswered.