It is not hard to predict that 5G revenue will be substantial by 2025. By then, 5G might represent 12 percent of total mobile subscriptions globally, and that alone would represent a substantial revenue figure.
ABI Research predicts that mobile service providers will generate $247 billion in 5G revenues in 2025. That should not come as a terrible surprise. Globally, mobile operators generate revenues about US$1 trillion annually.
By 2025, there might be 1.1 billion 5G connections in service, accounting for 12 percent of total mobile subscriptions, according to the GSMA. If total mobile revenue globally is about $1.3 trillion in 2025, and 5G represents just 12 percent of total revenue, 5G might plausibly generate $156 billion in revenues.
That is a conservative estimate, as 5G is likely to be adopted first by power users in big countries, with spending far higher than the “average” account globally. In fact, a developed market service provider can have average revenue per user an order of magnitude higher than many service providers among the world’s top 20, ranked by total revenue.
But it would largely be a mistake to envision that 5G revenue as mostly incremental new revenue. There will be some, to be sure.
But 5G is going to cannibalize 4G accounts. So most of the 5G revenue will displace existing revenue, and not represent a wholly-incremental amount of revenue.
That noted, the near-term upside might be significant. If the transition from 3G to 4G provides any guidance, the premium (incremental new revenue) might initially be in the range of 20 percent.