A new study from Juniper Research found total operator-billed revenue from 5G IoT connections will reach $8 billion by 2024. This rises from $525 million in 2020. This is a growth of over 1,400% over the next 5 years. 5G will provide the data infrastructure for the next generation of mobile communications. This includes the serious developments being planned in IoT, including smart cities and AVs (Autonomous Vehicles). The report identified the automotive and smart cities sectors as key growth drivers for 5G adoption over the next 5 years.
The research, ‘5G Networks in IoT: Sector Analysis & Impact Assessment 2020-2025‘, anticipates revenue from 5G connections. The report suggests it will become a highly sought-after new revenue stream for operators. It regards 5G IoT connections as new connections that will not cannibalise existing operator connectivity revenue from current IoT technologies.
5G value-added services key for operators
The research urges operators to develop comprehensive value-added services to enable IoT service users to manage their 5G connections. It forecasts that tools, such as network slicing and multi-access edge computing solutions, will be essential to attract the highest spending IoT service users to use their 5G networks.
The research also forecasts that valued-added services will become crucial in the automotive and smart cities sectors. It also forecasts that these sectors would account for 70% of all 5G IoT connections by 2025. The report expects higher than anticipated levels of device support for 5G radios accelerating the uptake of 5G connectivity.
Maximising the new revenue stream
The research claimed the initial high pricing of 5G connectivity in IoT, would dissuade all but high value IoT users. It urged operators to roll out holistic network management tools that complement enhanced capabilities of 5G networks for IoT capabilities.
Research author Andrew Knighton remarked “Management tools for the newly-enabled services are key for users managing large scale deployments. We believe that only 5% of 5G connections will be attributable to the IoT. However, as these are newly enabled connections, operators must view them as essential to securing a return on 5G investment”.
Over the next five years, Juniper anticipate significant activity in five key sectors:
- Automotive: IoT technology, including sensors and inter-device communication, is fundamental to self-driving cars and driver support tools.
- Digital Health: Networked devices allow the more effective collection of healthcare data, supporting eHealth practices.
- Smart Cities: Thanks to the better data facilities of 5G, local authorities will be able to establish smart cities. This is possible where automation and information sharing improve a city’s efficiency.
- Smart Homes: The most immediate consumer-facing segment of IoT, sensors and networked devices can be used to manage a home. This is expected to increase comfort, safety and energy efficiency.
- 5G Mobile Broadband: The increased bandwidth and speed of 5G will make it a viable alternative for connecting homes to the Internet. 5G technology should reach geographical areas that currently lack connectivity.
5G Global rollout
2019 was the year that 5G finally hit the market. Launches in North America, Western Europe and the Middle East created a small base of 5G consumers. However, the technology also gained significant traction in Far East & China. Thanks to an effective launch and surprisingly fast customer take-up, South Korea leapt ahead of the rest of the world. By the end of the year, there were an estimated 4.5 million 5G users in the Far East. This is roughly 80% of the global total, nearly all of them in South Korea.
North America had the second highest number of connections, reaching around 800,000 users. West Europe is taking a more tentative approach waiting to see how the technology develops. Other parts of the world lack the infrastructure to start on 5G for at least two years. Europe, Asia and Middle East will move to catch up with Korea, India and Latin America are likely to lag behind. This is due to failures of 5G pricing on the one hand, and economic challenges on the other.
Enterprise Times: What this means for business?
5G, the latest iteration of wireless cellular technologies, has started to be rolled out by network operators around the globe. Previous iterations of technologies (3G and 4G) were developed with a consumer-oriented focus. However, 5G will have further-reaching impact. It will enable a large number of use cases in IoT sectors such as healthcare, automotive industries, smart cities and mobile broadband. 5G is expected to deliver high bandwidth and low latency that supports services such as Ultra High Definition video streaming. The rate of adoption has already been five times faster than anticipated in Juniper’s previous report. This holds great promise for 5G. It has not just lodged in the public consciousness but has found its way into the lives of several million consumers.