Juniper Research just published a study that predicts telco revenue from 5G will hit $357 billion by 2025. This is out of a total revenue of $806 billion.
So, that’s OK then.
The question, of course, is exactly how this is made up and where this revenue will come from. Juniper believes that a major factor will be the migration to 5G, driven partly by a shift in from 3G and 4G networks to 5G, which will be the only technology standard growing globally. Juniper believes that telcos will have to charge more for 5G connectivity and we believe there is a real question mark over that strategy.
If 5G becomes the only standard that is growing, then it is unlikely that it will continue to be available at a premium and if we know anything we know that telcos love commoditising connectivity.
Even with 5G, the debate goes on about connectivity. Should telcos become specialist ‘bit pipe’ players or should they go further into ‘services’? The TM Forum (and most industry observers) believe strongly that telcos need to head down the service route and with the improvements that 5G brings, the potential for innovation is certainly there.
For a while now, we have been hearing from telcos that the initial opportunities for 5G will lie in the enterprise sector and the study from Juniper Research certainly bears that theory out. It identifies private networks as one of the first areas where the technology will be leaning against an open door. Custom built and creatively optimised low latency, high-speed networks will transform many sectors such as manufacturing, engineering and distribution. These are the use cases that remain viable and solid in the face of the hype that the last few years have brought us. This theory is backed up by the level of M&A activity in the private network sector.
Other areas, according to Juniper, will include the eSIM space, which will boost the IoT market dramatically, and the mobile identity opportunity, which the GSMA has been backing for some time but has yet to be fully realised.
All of which is fine and interesting and this time almost sounds like a plan. One big question is what happens in the consumer space. Non-standalone 5G is already delivering greater speed and lower latency and this is driving greater demand for games that demand that kind of support.
The day of reckoning will come with standalone 5G, due to be among us next year. That will, according to several telcos, including O2, be a game-changer.
You might say that all of this is fine but that nothing has really changed. Yet, there is something that feels a little different this time.
Every executive from a telco you talk to, or listen to, has changed – and recently. Whereas before they couldn’t help themselves and talked about connectivity without thinking about it, now they are not. They are talking about ‘outcomes’ and ‘solutions’, ‘partners’ and ‘no one party can do this alone’.
Telcos genuinely seem to understand that they are now solutions providers and they need to work with a wide variety of partners to produce good outcomes for their customers, whether enterprise or consumer. And, yes, they still need to provide the best connectivity ever.
Either way, Juniper Research might be right about the revenue targets and the initial sectors but we might also be in for a period where telcos turn out to be part of a rather dynamic and interesting period of industry transformation and innovation.
You can download the white paper here (bear in mind, there is a registration/sign up form).