5G will overtake 4G as the most popular way to access mobile internet in the US as soon as 2024, when there will be more subscribers than 4G, according to GlobalData. But 5G subscribers will consume more data than 4G subscribers as soon as 2023, with 5G accounting for 80.8 million terabytes (TB) of mobile broadband traffic, compared to 4G’s 75.7 million. However, current capabilities are not yet enough to get people rushing to acquire 5G devices as the hunt for the killer app remains.
Many US consumers are not keen to upgrade to a new 5G phone without seeing clear and immediate benefits. The current advertising focus on 5G’s higher speed and lower latency capabilities isn’t enough to make 5G a must-have. The platform is so far missing a transformative killer app, or apps, to distinguish the service from existing 4G LTE networks.
5G technology keeps evolving
There will be numerous possibilities for future monetization. Features such as network slicing (a virtualized method of separating out a self-contained network segment that can target specific use cases with different requirements for speed, latency, and reliability) and edge computing (a distributed computing framework where information capture and processing is conducted at or near the data source) are key. These features will be part of enterprise service offerings, but there will also be opportunities for novel consumer services.
Carrier efforts to promote 5G-enabled fixed wireless access (FWA) services, cloud gaming, augmented reality (AR), and virtual reality (VR) experiences are steps in the right direction, but more advanced capabilities are needed to fulfil consumer expectations for enriched services. 5G will likewise provide an entry point into the evolving metaverse. As often happens with new technology generations, other innovative consumer services that have not yet been considered, will arise as the technology matures.
Operators are already steering customers to pricier bundles
Telecom operators will gain higher monthly average revenue per user (ARPU) from consumers by steering them to higher-priced service bundles that include entertainment-based value-added services.
GlobalData expects 5G services in the US will generate ARPU of $45.56 during 2022, with 4G LTE only generating ARPU of $26.41. US 5G ARPU will be more than double 4G LTE’s ARPU in 2023 and will continue outpacing its older technological sibling by increasing percentages during 2025-2026.
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By GlobalData
