China, the USA and Japan will have the highest number of 5G connections by 2025, and together, these three countries will have 55 percent of all 5G connections by then. Additionally, 5G operator-billed service revenues will reach $269 billion by 2025, rising from $851 million in 2019 – achieving 161% CAGR (compound annual growth rate) over the first seven years of 5G services.
These are the findings of a new research report from Juniper Research, ‘5G Market Strategies: Consumer & Enterprise Opportunities & Forecasts 2017-2025’, based on the latest market data and taking into account the accelerated status of current operator and vendor developments, with network launches expected to occur during 2019, a year earlier than originally anticipated.
The firm’s top five ranking of the ‘most promising’ 5G network operators are:
- SK Telekom
- NTT DOCOMO
- KT Corp
- China Mobile
- AT&T Mobility
SK Telekom ranked No 1 for the extent of 5G trialling over the past 24 months in the fields of millimetre wave spectrum, MIMO (massive input, massive output) transmission and network splicing. Juniper’s ranking process included analysis of time in development, breadth and value of partnerships and progression of 5G network testing.
Additionally, the research predicted that 66 percent of all 5G operator-billed revenues will come from North America and Far East & China by 2025.
5G spectrum auctions and infrastructure build-out costs would necessitate a diverse range of strategies to maximize operator return on investment. This need is compounded by the ongoing fall of average revenues per connection. As such, adoption of software-based network solutions will lower investment costs, enabling operators to begin realizing a return on investment as early as 2024.
Commercial IoT revenues would disappoint
In terms of commercial IoT (internet of things) revenues, Juniper forecasts that the ARPC (average revenue per connection) would be disappointing, including in smart cities and digital health. This is due to low data requirements and nominal duty-cycles. It urges operators to develop new business models to minimize network operating costs, including software-based solutions to manage the diverse requirements of individual 5G IoT connections.
Furthermore, it advised that maximizing connectivity revenues through 5G fixed wireless broadband would prove crucial to offset this disappointment, with ARPC forecast to remain above $50 until 2025.
“Operators and vendors must test their networks in a real-world environment at scale, ensuring speeds can compete with fiber services,” says Sam Barker, the report author. “Networks that can deliver the highest speeds and greatest reliability will command the highest ARPCs, hastening an operators’ return on 5G investment”.
How operators can maximize ROI
The research firm also looked at some of the key markets that 5G might impact, and in what way, in areas like healthcare, automotive, mobile broadband, the smart city, AR and VR (augmented reality and virtual reality), and smart homes. We summarize these below.
5G in healthcare
Monitoring devices are central to all mHealth services, but vary in their complexity and the degree to which they are crucial for positive health outcomes. At its simplest, a monitoring device can be used to track weight or blood pressure in a system which links to a smartphone or PC, using the smartphone as a hub. At its most complex, heart arrhythmias can be managed through a bespoke monitoring device that links to a specialist medical establishment. 5G’s use in the healthcare sector will be constrained by the time required for applications to be certified and consequent long development cycles.
5G in automotive
Whilst much of the development of V2X (vehicle-to-everything) services has been based on IEEE 802.11p, Juniper believes that the future of the wider V2X ecosystem is firmly rooted in 5G networks. It expects automotive OEMs (original equipment manufacturers) to progress on the assumption that 5G will become the underpinning connection for all V2X services in the future. Automotive OEMs, such as Mercedes-Benz and Cadillac, have already taken steps to introduce DSRC (dedicated short range communications) into some of their new models in 2017. The technology, based on 802.11p standards, uses unlicensed spectrum, so does not use any form of cellular connectivity.
5G in mobile broadband
Understandably, FTTP (fiber-to-the-premises) is not possible everywhere and it is not economically viable to extend it to all premises. Wireless technologies such as 5G could essentially extend or complete this connection to cover the ‘last mile’. 5G will also be useful for providing broadband access to rural areas where there is still a lack of fast broadband availability. The peak data rates of a 5G system will be higher than 10Gbit/s but, more importantly, the cell-edge data rate (for 95 percent of users) should be 100Mbit/s. This will allow the use of the mobile internet as a reliable replacement for cable wherever needed.
5G in the smart city
Creating a single platform on which 5G-enabled smart city technology can be placed is critical to the ecosystem development. This model will speed up the initial development of hardware and enable rapid expansions to other areas, once use cases and technologies become apparent. The challenge facing MNOs (mobile network operators) will be acquiring land for the new sites required for this ‘densification’ of networks. MNOs are urged to engage with regulators to ensure that, as they seek to upgrade and expand their infrastructure, they have the opportunity to purchase or lease new sites at market rates and have access to those sites.
5G in AR and VR (augmented reality and virtual reality)
Juniper expects 5G networks to greatly accelerate both AR and VR technologies, principally in the mobile space. At present most head mounted displays need wired connections to be able to process the information, but Juniper anticipates that for a fully immersive experience, AR will require speeds of 5.2Gbps and VR will require speeds of over 8Gbps.
5G in smart homes
Security concerns must continue to be addressed by smart home platform providers themselves. Issues, such as eavesdropping and physical break-ins through the hacking of smart lock units, will continue to be a constraint to mass adoption of the technologies. However, 5G networks have the ability to soften these fears. It’s anticipated that 5G routers will be used for the ‘high-end’ smart home user, eliminating the issue of cutting external networking cables to breach the system. Market success will be dependent on meeting the consumer value proposition of the whole smart home offering, including the smart home hub, installation of the system, usefulness of the hardware and maintenance.
Governments will need to encourage 5G investment
Unlike 4G, there is no discernable use case that will encourage operators to roll out 5G networks. As a result, Juniper anticipates that increased investment from governmental bodies will be needed to encourage the development of these networks, with the exception of North America, where no official funding has been announced.
The research firm further cautions that although the spectrum auction payments may be spread over several years, they can be a substantial investment that will take several years to recoup, particularly bearing in mind that at the outset only a comparatively small number of connections will be 5G enabled. Furthermore, spectrum auctions are likely to be an on-going activity, with refarming of spectrum certain to occur with the shut-down of legacy networks.
For more information on the full report from Juniper Research, click here.