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5G service revenue forecast to exceed $65bn

Regina Pazvakavambwa
By Regina Pazvakavambwa, ITWeb portals journalist.
Johannesburg, 11 Aug 2015
At least $25 billion will be invested into 5G technology research, trials and development over the next five years, says Juniper Research.
At least $25 billion will be invested into 5G technology research, trials and development over the next five years, says Juniper Research.

A new report from Juniper Research forecasts a healthy adoption for 5G, with service revenues set to exceed $65 billion by 2025, compared to just $100 million during its first year of commercial services in 2020.

In June, the International Telecommunication Union confirmed its plan to commercialise 5G by 2020.

If correct, the report points out that within the first five years of commercial availability, 5G will account for 7% of all operator-billed service revenues, the research firm said.

It estimates at least $25 billion will be invested into 5G technology research, trials and development over the next five years.

While the first commercial roll-outs are expected in 2020, widespread adoption will only occur from 2025, with national spectrum licensing occurring over a period of years as per 4G, says Juniper Research.

Companies that make mobile network equipment such as Huawei, Ericsson, Nokia and Alcatel-Lucent are carrying out experiments with operators to prepare for 5G.

Huawei has said it will invest $600 million in 5G research and expects to have a network ready for deployment by 2020.

Huawei believes 5G success depends on the entire ICT ecosystem, adding its growth will be built upon global LTE success. ICT ecosystem innovation will also be a key driver in creating a larger 5G market, says Huawei.

According to Juniper Research, 5G will not only enable faster connections but will act as a catalyst for a wide range of new consumer and enterprise experiences, including high definition 4K to 8K video, as well as self-driving cars, advanced virtual reality, and a sensory or tactile Internet - constantly monitoring and controlling.

"These discrete segments or services will require transparent and competitive pricing based on data usage, device type, and speeds; this means that profit margins will vary with regards to the sector enabled," says Nitin Bhas, head of research at Juniper Research.

GSMA says while a shift to 5G would be hugely impactful, the industry will need to overcome a series of challenges if these benefits are to be realised, particularly in terms of spectrum and network.

In the near future, 5G networks bring a promise of new market opportunities, but also the threat of competition and consolidation, says Sathya Atreyam, IDC analyst.

To help operators manage the transition, solution vendors need to respond more quickly to market changes and develop broader and more integrated products and services combining information technologies and telecommunications technologies, he adds.

Juniper Research noted operators will need to consider multiple service deployment scenarios to achieve an adequate return on investment from their network and licence investments.

It is critical to 5G's success that the most feasible and appropriate spectrum bands are assigned, to support the wide-ranging devices and applications contributing towards the Internet of things, it says.

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