Global operator revenue to be buoyed by 5G over next five years

As Covid-19 spread rapidly around the world in March and April, the talk was that shortages of component manufacturing and/or network workforce deployment, such as integration engineers, would cause huge disruption and set the 5G industry back on its heels. Fast forward six months or so and the talk is that these worst fears have not been realised, with Juniper Research the latest to be bullish on the next-generation architecture.

The operator revenue strategies: Challenges, opportunities and forecasts 2020-2025 fundamentally recognises that 5G uptake has surpassed initial expectations, predicting that total 5G connections will surpass 1.5 billion by 2025.

It calculates that the growth of 5G networks will be robust over the next five years, with 5G revenue set to represent 44% of global operator billed revenue at the end of the study period owing to rapid migration of 4G mobile subscribers to 5G networks and new business use cases enabled by 5G technology. This would mean operator billed revenue from 5G connections is projected to reach $357bn by 2025, rising from $5bn in 2020, its first full year of commercial service.

Looking at the drivers for the growth, Juniper identified 5G network roll-outs as highly resilient to the Covid-19 pandemic. It found that supply chain disruptions caused by the initial periods of the pandemic have been mitigated through modified physical roll-out procedures, to maintain the momentum of hardware deployments.

To secure a return on investment into new services, such as Ultra-Reliable Low-Latency Communication (uRLLC) and network slicing that is enabled by 5G, Juniper said that operators will apply this premium pricing for 5G connections.

Network slicing is now being actively tested. In July 2020, Nokia announced that Australian telco Telstra had deployed Nokia EdenNet self-organising network (SON) software to centralise and automate network operations, while Austrian operator A1 was using its communications technology to support the advanced communications feature with railway operator ÖBB Infrastruktur.

It further predicts that these services alongside the high-bandwidth capabilities of 5G will create data-intensive use cases that lead to a 270% growth in data traffic generated by all cellular connections over the next five years. It also forecast that the average 5G connection will generate 250% more revenue than an average cellular connection by 2025 as applications are increasingly accessed over the ultra-high bandwidth mobile networks.

Going forward, Juniper also advised operators to use future launches of standalone 5G networks as an opportunity to further increase virtualisation in core networks. It warned that failure to develop 5G network architectures that handle increasing traffic will lead to reduced network functionality, and will inevitably lead to a diminished value proposition of its 5G network among users.

“Operators will compete on 5G capabilities in terms of bandwidth and latency,” noted Operator revenue strategies: Challenges, opportunities and forecasts 2020-2025 author Sam Barker. “A lesser 5G offering will lead to user churn to competing networks and missed opportunities in operators’ fastest-growing revenue stream.”