Mobile Network Peak Usage Timeline ChartBI Intelligence
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The next generation of wireless technology is upon us, and it's poised to make some major money in the next decade.
A new forecast from ABI Research expects the rollout of 5G wireless technology to create $247 billion in revenue in 2025. Most of this revenue for mobile broadband operators will come from major markets (North America, Asia, and Western Europe) in the early going.
Much has been made of 5G in recent months, particularly because of the excitement about how faster data transfers will transform the entire industry. These 5G networks will allow data load rates greater than multiple tons of megabytes per second, expand wireless coverage worldwide, and decrease latency.
Of course, there will be a few hurdles to clear before 5G is widely available for consumers. For starters, network operators, vendors, and regulatory bodies have yet to agree on a finalized standard for the wavelength that would carry the 5G networks. Laurie Beaver, research associate for BI Intelligence, Business Insider's premium research service, notes that this agreement is likely to happen by 2020.
Networks also need to make sure that enough devices are compatible with 5G prior to a widespread rollout. A few tech companies at Mobile World Congress 2016 in Barcelona showed devices that could connect to 5G networks.
Even with these roadblocks, wireless carriers are already racing to be the first to debut the new technology. The top two wireless carriers in the U.S., Verizon and AT&T, have announced they would start testing 5G networks by the end of this year.
The 5G race will be the latest battle in the ongoing wireless carrier war that has been raging for the last several years. AT&T and Verizon have dominated the carrier market over the past seven years while T-Mobile and Sprint have struggled to gain subscribers. Then in 2013, T-Mobile tweaked its strategy to turn around its business.
This move, along with slowing smartphone adoption and other forces in the mobile industry, killed the two-year contract and initiated an ongoing price war between carriers. The movement away from the contract model is not only changing the way carriers operate, it’s affecting the myriad of industries that rely on carriers’ services.
Will McKitterick, senior research analyst for BI Intelligence, has compiled a detailed report on wireless carriers that examines how the wireless industry has fundamentally changed since carriers began aggressively responding to the launch of T-Mobile’s “Un-Carrier” movement. It also looks at the factors underpinning changes in the broader wireless industry and the challenges carriers face in 2016 and beyond, including the upcoming spectrum auction and the deployment of new wireless technologies.
Here are some key takeaways from the report:
  • Consumers are actually becoming more loyal to their current wireless operator even as competition between the carriers intensifies.
  • The wireless carriers are not only battling over device financing, they’re also trying to woo consumers through attractive data packages.
  • Intensified competition between carriers has lengthened the smartphone replacement cycle, posing a challenge for mobile software developers and handset makers.
  • With phone subscriber growth stagnating, carriers will look to alternative sources of revenue, including connected cars, tablets, and IoT devices, to drive growth.
  • The upcoming spectrum auction, the latest ruling on net neutrality, and new technology, will change the face of the broader wireless industry in next few years.