Nokia has used business modeling to try to remove the guesswork from operators’ 5G network evolution plans.
Although standardization of 5G is yet to be finalized, infrastructure manufacturers and operators such as AT&T, Verizon and others have been running increasingly advanced trials to show that the different technological components of 5G will perform as expected to be able to deliver exciting new services.
However, no commercial 5G deployments are yet deployed. The Nokia research finds, “Many CSPs (communications service providers) lack the business information they need to recognize the trends, identify the opportunities and understand what 5G can do for their brand. It must be very clear how additional revenues can be secured with 5G, what investments will be required and at what point a business case will break even. Investments in 5G will be needed and CSPs cannot afford to gamble. To help address the shortfall in the business justification of 5G, Nokia is conducting in-depth research into a variety of areas in which 5G is most likely to bring the first benefits for CSPs and their customers.”
According to Nokia’s 5G analysis and simulation tool:
- ‘5G to the home’ will break even after four years if the monthly average revenue per user remains above $42
- 5G events and hotspots, in locations such as stadiums, have a one-year payback period depending on the number of events held at the location, with at least five events per month required to ensure a profitable business case
- Operators can achieve tangible early mover advantages in terms of revenue and market share for services such as in-vehicle infotainment
Nokia’s analysis of how 5G will perform in real networks also finds it can:
- Increase capacity by 40 times compared to 4G, “making it the only commercially viable technology for the delivery of a true immersive VR video experience to massive numbers of subscribers in high-attendance venues”
- Substantially reduce the cost-per-device in a smart city deployment handling millions of connected devices, including IoT sensors
- Deliver the ‘99.999 percent reliability’ and low-latency at-scale required in an Industry 4.0 environment
Joe Madden, Principal Analyst at Mobile Experts, comments, “While market news has recently focused on the announcement of 5G technologies that drive increased network performance, it’s important to discuss how these low latency broadband connections will translate into customer value. With the publication of the two new studies and its 5G Acceleration Services, Nokia is showing operators and enterprises how they will be able to benefit from early 5G deployment.”
Download the research: