Paying for 5G

There is little doubt that 5G will deliver a wealth of new services to consumers that are not just faster versions of the content and services they have access today with 4G. For operators and consumers alike, the cost of these services is likely to be in the premium band, but consumers seem to be willing to pay these prices.

Sarah Mills, Sarah Mills, Network Operator Sector Director, SSE Enterprise Telecoms, explained to Silicon how she sees the cost ratio breaking down:

“When 4G was first introduced, mobile operators did charge a premium for the services. Once 5G is fully functional, it’s likely a similar structure will be deployed. However, as more mobile network operators (MNOs) offer 5G services, forming a competitive market, prices are expected to fall quickly.

“As this more widespread adoption takes place, consumers won’t be expected to foot the bill alone. In fact, the financial benefits for consumers could help offset any upfront costs. A recent report from Ovum predicts that consumers will be able to save an estimated £240 per year by ditching their fixed line connection for 5G Fixed Wireless Access, reducing the need for engineer visits.”

Sarah concluded: “MNOs are also likely going to source alternative ways to commercialise 5G, to further avoid offloading the full cost onto consumers. That opportunity could materialise with the delivery of smart cities through network slicing or small cell networks. These can be offered to organisations or municipalities within a city who may have high-bandwidth needs like sporting venues or shopping centres.”

If the right services do become available, consumers will embrace them. One of the critical components of 5G will be the realisation of the smart city and its use of IoT devices. When an ecosystem of intelligent machines exists, innovative services can be built on top of this network.

For consumers, transport, banking, healthcare and entertainment are all enhanced with services that can utilise the vast quantities of consumer data that becomes available. The GSMA states: “Global IoT revenue meanwhile will increase at an average annual rate of 23% to 2025 to reach $1.1 trillion, a fourfold increase on 2018. However, connectivity will become increasingly commoditised, declining from 9% of total IoT revenue in 2018 to 5% in 2025.”

Dave Labuda, Chief Executive of MATRIXX Software, also commented:

“The feedback from consumers paints a very clear picture for operators — ‘deliver a 5G experience worth the attention, and we’ll gladly pay for the privilege of using it,’” he said. “In an industry fighting to keep customers amidst consolidation and competition from digital MVNOs and OTT players, 5G presents a real opportunity to deliver a powerful value-add to the consumer.”

Next-generation mobile services then will have a ready and waiting audience. For businesses developing these new services, the ubiquity of the smartphone, high levels of literacy and increasing disposable incomes converge to create a market place that is diverse, dynamic and potentially highly lucrative. Services providers though, need to ensure they understand what motivates their audiences and how 5G services can enhance those needs.

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David Howell

Dave Howell is a freelance journalist and writer. His work has appeared across the national press and in industry-leading magazines and websites. He specialises in technology and business.

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