Operators’ 5G IoT revenues to jump 1,400% to $8bn by 2025 – driven by cars, cities
Mobile network operators will have earned $8 billion, and counting, in brand new sales revenue from 5G-based IoT connections by 2025, according to new forecasts from Juniper Research.
The firm reckons global operators will, collectively, add $8 billion from new 5G-based IoT sales in the period. The $8 billion figure, it makes clear, is for brand new IoT connections, which do not cannibalise their existing connectivity revenues.
The figure for 5G IoT sales will be around $525 million by the end of 2020, it predicted, as the first wave of 5G network deployments starts to complete. The company’s five-year projection represents a 1,400 per cent rise on the expected 2020 figure.
The report, covering the period to the end of 2024, says the automotive and smart cities sectors will account for 70 per cent of all 5G-based IoT connections by 2025, with higher than anticipated levels of device support for 5G radios accelerating the uptake of 5G connectivity.
Juniper Research said the lion’s share of 5G connections (up to 95 per cent) will be non-IoT related, for mobile broadband for traditional smartphone and smart device sales. But early 5G-based IoT connections will be relatively high value, and afford operators an additional means to recoup their 5G investments.
Andrew Knighton, author of the paper, commented: “Only five per cent of 5G connections will be attributable to the IoT, but as these are newly enabled connections, operators must view them as essential to securing a return on their 5G investment.”
The introduction of effective, user-friendly management tools for organizing and controlling potentially massive numbers of IoT devices will be key for operators to scale 5G as an IoT connectivity option.
Operators should develop “comprehensive value-added services” to enable IoT service users to manage their 5G connections, said Juniper Research. Tools like network slicing and edge computing will be essential to attract the highest spending IoT service users to use their 5G networks, it said.
“The initial high pricing of 5G connectivity in the IoT sector will dissuade all but high value IoT users. Operators [should] roll out holistic network management tools that complement the enhanced capabilities of 5G networks for IoT capabilities,” the company stated.
It added: “5G will be better able than its predecessors to withstand IoT’s growing pressure on data networks… 5G’s capacity to cope with many more devices will make the IoT a reality.
“5G will tbe a critical part of the unifying infrastructure that allows millions of devices to talk to each other and to provide human agents with the data they want from the IoT. This in turn will shape the 5G network. Current mobile networks are designed for people, but in the 5G era, they will need to be designed with mass devices in mind.”
Juniper Research also highlighted digital health, smart homes, and mobile broadband as key 5G use cases. The company reckons the total number of 5G connections will reach 1.5 billion globally by 2025, rising from five million in 2019, at an annual rate of 150 per cent in the period.
The US and South Korea will be the fastest adopters of 5G, spurred by aggressive ricing strategies in both markets. Seventy-five per cent of all 5G subscribers attributable to these two countries by the end of 2020, it said.
It noted operators in Europe have sought to maximize early 5G revenue by applying premium pricing over 4G subscriptions. “Operators in these regions must expand geographical 5G coverage via basestation rollouts in order to maximise the value proposition of 5G and justify the premium pricing,” it said.