Though the industry has undoubtedly been pushing toward the 5G future with enthusiasm, that doesn’t mean there haven’t been doubts about the technology. Or, more specifically, how long it will take for investments in 5G to pay off.
As outlined by PwC Strategy&’s Principal Dan Hays, some mobile carriers are anxious about whether multi-billion dollar investments in 5G will be worth the money in a market where the average revenue per user actually dropped in the transition to 4G. As Hays put it, “consumers tend to believe that wireless technology—like most technology—should get steadily better and cheaper over time, and they’re disinclined to pay more for those improvements.”
But a new set of reports from Nokia is offering operators some reassurance.
One of the studies takes on a number of 5G use cases, including 5G to the home, 5G events and hotspots, 5G for in-vehicle infotainment, 5G for connected healthcare, and 5G for connected industry.
Nokia’s head of 5G Business Harold Graham said the studies offer “key new insight into the benefits and business opportunities enabled by 5G.”
According to Nokia’s analysis, 5G to the home could see operators break even after four years if they can keep the monthly average revenue per user above 40 Euros. And 5G events and hotspots can have an even faster payback period of one year depending on the number of events held at the venue. For ensured profitability, these hotspot locations should hold at least five events per month, Nokia said.
Ultimately, Nokia concluded that early adoption of 5G technologies is key to a winning business strategy. This, Nokia said, will help set operators apart in a world of increasing competitive pressure.
“While market news has recently focused on the announcement of 5G technologies that drive increased network performance, it’s important to discuss how these low latency broadband connections will translate into customer value,” Joe Madden, principal analyst at Mobile Experts, commented. “With the publication of the two new studies and its 5G Acceleration Services, Nokia is showing operators and enterprises how they will be able to benefit from early 5G deployment.”
The full Nokia reports can be found here and here.
Filed Under: 5G
