In Business Model, Internet Access, Mobile, Spectrum

It is not easy to estimate use cases for the early 5G mobile network deployments (2018 and 2019) On one hand, since handsets will not be available until mid-2019 or so, it seems logical that the first wave of deployments could be lead by fixed wireless deployments.

On the other hand, it does not seem likely that use cases, after five to six years, will be lead by anything other than smartphone internet access, as large numbers of consumers swap 5G for 4G for internet access.

Total 5G connections will grow rapidly to 1.5 billion by 2025, with initial growth driven by fixed wireless access to replace or complement current broadband connectivity, analysts at Juniper Research now predict. But Juniper analysts also say 90 percent of 5G connections in 2019 will be used to support smartphone internet access.

It is not easy to reconcile those different statements and predictions. One way to do so is to assume that until volume production of 5G smartphones happens, 5G deployments will, of necessity, focus on fixed wireless or mobile wireless used as a replacement for fixed network internet access (using a dongle, for example, to create Wi-Fi hotspots).

“Complement” is easy to characterize: consumers will substitute 5G for 4G for their smartphone data plans. “Replace” is the more disruptive trend, as that means substitution of mobile access for fixed access. But compolement will be the bigger use case, over time.

There might be some 220 million 5G fixed wireless connections by 2025, representing perhaps 15 percent of 5G connections.

Juniper predicts that 43 percent of global 5G connections will be in Japan and South Korea in 2019. In the early going,  three regions (Far East & China, North America West Europe) are forecast to account for all 1.05 million 5G active connections in use by the end of 2019, and 90 percent of those will be used by smartphones, for mobile service. That implies about 105,000 5G fixed wireless accounts will be in commercial service by the end of 2019.

Some of us believe the fixed wireless total will be larger, if only because Verizon will push hard to get its own 5G fixed wireless accounts up into the millions, as quickly as possible. Verizon plans to have commercial 5G fixed wireless operating in perhaps five U.S. markets before 2019, and expects a 20 percent to 30 percent take rate in those markets.

There are perhaps 8.5 million homes in those five Verizon markets. If one assumes take rates for internet access at about 80 percent, that means an addressable market of some 6.8 million homes. And 20 percent take rates imply 1.4 million customer accounts, if Verizon can hit that figure on the initial marketing effort.

Verizon might ultimately market to some 33 million U.S. homes, of which, using the 80 percent figure, 26 million homes are targets. Were Verizon to get 20 percent adoption, it would have some 5.3 million fixed wireless internet access accounts.

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