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5G: why you won't pay more

Peter Krass's picture

by Peter Krass on 06/10/2019
Blog Category: advanced-technologies

Here’s some good news about 5G, the forthcoming wireless-networking standard: It’s probably not going to cost you or your customers much more than you’re paying for 4G now.

That’s the silver lining behind an otherwise cloudy forecast from consultants and market watchers Strategy Analytics.

The firm predicts that 5G networks by 2024 will generate more than 25 cents of every dollar taken in by wireless service providers. Yet despite that strong share, it adds, 5G will not boost the overall performance of the wireless market.

Why not? Because 5G telecom providers will compete for consumers on price. On that basis, whichever telco can offer the most data for the lowest monthly fee will win.

For the telcos’ bottom line, that could be pretty rough. But for you and your customers, it should be quite good.

4G redux?

Assuming this forecast comes true, the situation will largely repeat what’s already happened with the current 4G tech.

Between 2012 and 2018, Strategy Analytics says, 4G grew from just 4% of all mobile subscriptions worldwide to more than 60%. Yet during that same period, the mobile industry’s service revenue increased by less than 1%.

In other words, from a telco perspective, all that great 4G growth translated into barely any sales growth at all.

Devices, too

But won’t devices able to handle 5G be more expensive? And won’t telcos and computer companies raise sales that way?

Yes, probably, but maybe only at first. Strategy Analytics reckons 5G hardware makers will compete on price, too. They could be making their gear more affordable by as soon as 2021. That’s just 2 years off.

“The challenge for operators then," says Phil Kendall, a director at Strategy Analytics, "will be how to monetize the significant additional capacity that the more widely deployed 5G networks will bring.” 

But when it comes to monetizing 5G, one place the telcos likely won’t look is your monthly wireless bill. That’s worth calling home about.


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