Home5G & Beyond5G could help wireless service revenues recover from 2023

    5G could help wireless service revenues recover from 2023


    The COVID-19 crisis will trigger a 2.6% decline in global wireless service revenue in 2020, according to a new report from Strategy Analytics.

    These revenues are not expected to stabilise again until 2023 when 5G will provide a “stronger contribution”.

    The analyst firm suggests that a pandemic-induced 2020 recession will see all regions suffer in terms of revenue declines, with only a soft recovery expected in 2021.

    Roaming revenue, which typically accounts for 2-4% of service revenue for operators, has been hit significantly and is expected to run at suppressed levels in many regions into 2021 as travel behaviour struggles to return to ‘normal’.

    The Wireless Market Outlook: Competing Impacts of COVID-19 and 5G report notes that broadband connectivity has become an essential during lockdowns, particularly for home study and working.

    Therefore, many operators are experiencing increases in mobile voice and data traffic and the high levels of dependence on mobile phones has seen the wireless sector less impacted than some industries. However, widespread unemployment and furloughing are impacting disposable income and expenditure even in these areas.

    5G momentum

    Phil Kendall, Executive Director at Strategy Analytics and the author of the report, said, “After a turbulent 2020/21, wireless service revenue will begin to stabilise and recover from 2023 as 5G provides a stronger contribution to connectivity revenue. Nevertheless, service provider revenues which peaked in 2017 will continue to decline over the next five years.”

    Strategy Analytics estimates that 5G average revenue per user (ARPU) was 80% higher than 4G in the first quarter of 2020.

    The report notes that there were over 75 live commercial 5G networks globally by the start of May, and user-linked 5G connections are expected to grow to over 200 million by year-end and 2.8 billion in 2025.

    Susan Welsh de Grimaldo, a Director at Strategy Analytics, commented, “5G momentum will begin to build from 2021, will overtake 4G revenue in 2024, and in 2025 5G will account for 53% of service revenue.”