In Business Model, Internet Access, Mobile, Spectrum

In the early going, an order of magnitude (10 times) to two orders of magnitude (100 times) change in the cost of supplying internet bandwidth might be the key early value of 5G networks. In other words, vastly-lower cost per bit is going to drive early revenue model changes.

That might be true even if latency performance and speed also change by an order of magnitude.

The best example is use of 5G to support internet access that rivals the retail cost, usage allowances and speed of a cabled access network. For the first time, a mobile platform should be able to compete head to head on speed, retail price and usage allowances with the market-leading cabled alternatives in a growing number of markets.

Conversely, even mobile 5G will offer so much more performance that mobile substitution will make sense for a growing number of use cases as well.

The order of magnitude changes in cost per bit will provide new value without having to invent new use cases. 

Where demand for bandwidth is highest (the 10 percent to 15 percent of cell locations where traffic demand is greatest), 5G can be spot deployed to improve user experience.

In the category of “new use cases,” the earliest addition will be the use of 5G in fixed wireless mode to attack the fixed network internet access customer base.

The extent to which a pricing premium for “faster speeds” allows a 5G price premium, how much and for how long, remains to be seen, but there will be some likely impact there.

source: 5G Americas

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