14 Apr, 2022 5G to become more popular than 4G in the US in 2024, but hunt for 5G killer app remains, forecasts GlobalDataPosted in Technology
5G will overtake 4G as the most popular way to access mobile internet in the US as soon as 2024, when there will be more 5G subscribers than 4G, according to GlobalData. But 5G subscribers will consume more data than 4G subscribers as soon as 2023, with 5G accounting for 80.8 million terabytes (TB) of mobile broadband traffic, compared to 4G’s 75.7 million. However, the leading data and analytics company highlights that 5G’s current capabilities are not yet enough to get people rushing to acquire 5G devices as the hunt for the killer app remains.
Tammy Parker, Principal Analyst at GlobalData, comments: “The 5G story is beginning to unfold, and US telcos are whetting consumers’ appetites for the arrival of emerging apps and services. However, many US consumers aren’t keen to upgrade to a new 5G phone without seeing clear and immediate benefits. While we do expect 5G to take a leading subscriber market share by 2024, the current advertising focus on 5G’s higher speed and lower latency capabilities isn’t enough to make 5G a must-have. 5G is so far missing a transformative killer app, or apps, to distinguish the service from existing 4G LTE networks.”
GlobalData notes that there will be numerous possibilities for future 5G monetization once features such as network slicing*, quality of service (QoS) guarantees, and edge computing* become mainstream. Many of these features will be part of enterprise service offerings, but there will also be opportunities for novel consumer services.
Parker adds: “Carrier efforts to promote 5G-enabled fixed wireless access (FWA) services, cloud gaming, augmented reality (AR), and virtual reality (VR) experiences are steps in the right direction, but more advanced capabilities are needed to fulfil consumer expectations for 5G-enriched services. Looking ahead, 5G features such as network slicing should enable US mobile operators to offer customized services that support specific use cases such as cloud gaming. 5G will likewise provide an entry point into the evolving metaverse.
“Additionally, 5G-enabled multi-camera views of popular events, such as major sporting events and concerts, will become more widely available. As often happens with new technology generations, other innovative consumer services that have not even been considered will arise as 5G matures.”
From a telco perspective, operators will gain higher monthly average revenue per user (ARPU)** from consumers by steering them to higher-priced 5G-enabled service bundles that include entertainment-based value-added services (VAS). GlobalData expects 5G services in the US will generate ARPU of $45.56 during 2022, with 4G LTE only generating ARPU of $26.41. US 5G ARPU will be more than double 4G LTE’s ARPU in 2023 and will continue outpacing its older technological sibling by increasing percentages during 2025-2026.
* Network slicing is a virtualized method of separating out a self-contained network segment that can target specific use cases with different requirements for speed, latency, and reliability, while edge computing is a distributed computing framework where information capture and processing is conducted at or near the data source.
** Average revenue per user (ARPU) – the total revenue divided by the number of customers.