A new study from Juniper Research found that annual operator billed revenues from 5G connections will approach $300 billion by 2025, rising from $894 million in 2019, its anticipated first year of commercial service. This is an average annual growth of 163% in its first 6 years.
The new study argued that these substantial revenues will offer respite to operators experiencing declining revenues and profitability. The report forecast that 5G service revenues would be 38% of total operator billed revenues by 2025, despite the anticipated 1.5 billion 5G connections only accounting for 14% of all cellular connections in the same year.
Operators Challenged by Increase in 5G Cellular Traffic
The research found that operators must optimise pricing strategies and network configuration to secure a return on their 5G investment. Given the variety of IoT devices that will use 5G, pricing strategies must reflect data usage, device type and required network speeds to ensure profitability.
Juniper forecasts that the total data traffic generated by 5G connections will reach 955 Exabytes annually by 2025, the equivalent to 143 billion hours of 4K video streaming. In response, Juniper urged operators to implement technologies that minimise the cost-per-bit of 5G data, including network virtualisation, to provide on-demand network agility for the data intensive demands of 5G connections.
Research author Sam Barker added: “5G for home broadband services will be the biggest driver in growth of cellular traffic after initial launches. By 2025, the average 5G home broadband connection will generate over 430GB of data per month.”
5G R&D Spend to Near $60 Billion in 2018
In addition, the research estimated that cumulative 5G research and development spend by operators, hardware vendors and public bodies will approach $60 billion by the end of 2018. In 2018 alone, it is anticipated that network operators will spend nearly $30 billion on trialling networks in preparation for commercial launches in 2019.