Analysts: 5G Not An Answer To Wireless Carrier Revenue Growth

5G, in and of itself, is a not an answer to carrier growth slowdown, according to a new forecast from the data analytics firm, Strategy Analytics, This, in some respects, goes against the general notion that 5G is going to open the doors in a way never seen before. While Strategy Analytics actually agrees with this point at the data connection level, it foresees carrier growth to not directly correlate to the data connections level. In other words, carriers globally will not benefit -- in terms of revenue -- from 5G in the coming years quite as much as some might expect.

The data firm pads out this forecast by stating that it expects the number of “user-linked mobile 5G connections" to reach 577 million in 2023. This is compared to the 5 million mobile 5G connections expected in 2019. A figure which the company states does not take into consideration fixed wireless applications and/or industrial IoT. So with those two highly-potent use cases removed from the equation, Strategy Analytics still expect massive growth at the connection level. However, the firm predicts this influx of 5G connections will, by 2023, only account for 10-percent of revenue. To highlight the point further, Strategy Analytics explains the total wireless service revenue in 2021 will hit $881 billion. Although this is a large enough number, it equates to only a 3-percent increase compared to the expected wireless service revenue in 2018. What’s more, the firm argues the 2021 figure will be when wireless service revenue peaks. This also happens to be the year when Strategy Analytics expects 5G smartphone sales to really start to have an impact at the market level.

Another way of looking at this is Strategy Analytics forecasts that by 2023 there will be a total 9 billion wireless services subscriptions (user-linked). This compares to the 7.7 billion today. So although there will be more 5G connections the actual room for carriers to generate growth is limited simply due to the sheer growth of user subscriptions that have been created up until now. Something the company suggests is directly related to wireless service providers doing all they can to generate as much revenue from 4G data as possible. Below highlights how the company expects 5G to impact on subscription numbers between now and 2023, compared to how 4G has impacted subscriptions over the past few years.

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John Anon

Editor-in-Chief
John has been writing about and reviewing tech products since 2014 after making the transition from writing about and reviewing airlines. With a background in Psychology, John has a particular interest in the science and future of the industry. Besides adopting the Managing Editor role at AH John also covers much of the news surrounding audio and visual tech, including cord-cutting, the state of Pay-TV, and Android TV. Contact him at [email protected]
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