5G Monetisation - Will Gigabit LTE and 5G bring higher revenues?

Publisher Name :
Date: 12-Sep-2017
No. of pages: 61

Summary

This study on the monetisation of 4G and 5G first examines how 4G is currently monetised by MNOs given that this is a key challenge for the industry as a whole.

It then explores in depth the paths to monetising 5G and how to avoid the traps and pitfalls encountered with 4G.

The study gives views on the new business models and value chains that are likely to be created by 5G.

Finally, it analyses three scenarios for 5G monetisation.

Geographic area & Players


  • Asia-Pacific

  • Europe

  • Latin America

  • Middle East & Africa

  • North America

  • World


Actors


  • AT&T

  • BT

  • China Mobile

  • Deutsche Telekom

  • Ericsson

  • Etisalat

  • Huawei

  • KT

  • Mobil1

  • Nokia

  • NTT DOCOMO

  • Orange

  • Proximus

  • Qualcomm

  • Samsung

  • SK Telecom

  • StarHub

  • Telecom Italia

  • TeliaSonera

  • Telstra

  • Verizon

  • Slideshow


4G/LTE monetisation


  • Segmentation criteria have changed

  • Volume-tiered pricing still the mainstream

  • Unlimited offerings are still a hot topic

  • Bitrate segmentation still emerging

  • Content discrimination as a new criterion


5G specificities, trials and opportunities

How could 5G could help to remove LTE models?


  • The virtuous circle of higher investment for better QoS and EBITDA margins

  • Performance objectives for 5G and associated use cases

  • Key 5G technological components

  • Benefits of network slicing and virtualisation

  • 5G opportunities

  • Status of 5G trials worldwide, to date


From the MNOs’ perspective

Scenarios for prosperity through 5G monetisation


  • Three scenarios for 5G monetisation, from MNO perspective


Market forecasts


  • LTE market forecasts: 4.7 billion LTE subs at YE 2020 / >730 billion EUR

  • 5G forecasts: 1.7 billion subs at YE 2025 / >200 billion EUR

5G Monetisation - Will Gigabit LTE and 5G bring higher revenues?

Table of contents

1. Executive Summary 6
1.1. LTE monetisation 7
1.1.1. How is LTE currently monetised? 7
1.1.2. LTE is still difficult to monetise 8
1.2. How could 5G get rid of LTE models? 8
1.2.1. Specific technological components to enable 5G 8
1.2.2. 5G new opportunities 9
1.2.3. Three scenarios for 5G monetisation 10
1.3. Market forecasts 10

2. Methodology and definitions 11
2.1. General methodology of IDATE DigiWorld's reports 11
2.2. Market assessment and forecasts 12

3. LTE monetisation 13
3.1. How is LTE currently monetised? 13
3.1.1. Volume-based billing 14
3.1.2. Speed-based pricing 22
3.1.3. Vertically integrated companies’ content strategies: HD video a new criterion 24
3.2. LTE is still difficult to monetise in Europe 29
3.3. Has LTE investment been profitable? 31

4. Will 5G kill LTE business models? 33
4.1. 5G has more specificities than former mobile technologies 33
4.1.1. Key challenges and design principles 33
4.1.2. Key technological components to meet key challenges 35
4.1.3. MNOs’ benefits from network slicing and virtualisation 38
4.2. A host of 5G technical trials are validating 5G capabilities 39
4.3. 5G brings in new opportunities 40
4.3.1. 5G is expected to enhance current use cases and expand to new ones 40
4.3.2. 5G will integrate many technologies -- cellular, wireless, LPWAN IoT and more. Usage will be truly gigantic,
necessitating new ideas 41
4.3.3. 5G eases arrival of new players on network portions or advent of new arrangements 41
4.4. Three scenarios for 5G monetisation 45
4.4.1. Factors affecting scenarios 45
4.4.2. Scenario 1: eMBB, immersive and interactive Virtual Reality /Augmented Reality (VR/AR) 47
4.4.3. Scenario 2: Ultra-reliable MTC/Ultra-Reliable Low-Latency Communications (uMTC/uRLLC) 50
4.4.4. Scenario 3: Massive IoT and verticals 52
4.4.5. Wrap-up 54

5. Market forecasts 55
5.1. LTE market forecasts 55
5.1.1. SIM LTE estimates and forecasts 55
5.1.2. LTE revenues estimates and forecasts 56
5.2. 5G market forecasts 56

6. Annex: operator benchmark 58

7. Glossary 60

List of Tables

Table 1: Overview of key features for the three scenarios 10
Table 2: Pricing parameters for mobile plans 13
Table 3: Operator data allowances 14
Table 4: Unlimited plans in Europe 16
Table 5: The Swisscom Natel Infinity product line 22
Table 6: Vodafone’s DE plans 23
Table 7: SFR product line 25
Table 8: Mobile operator value-added content services 26
Table 9: Movistar: Mobistar quadruple play bundles 27
Table 10: 5th percentile user spectral efficiency, as defined by ITU-WP5D 34
Table 11: Emerging video formats 47
Table 12: Features of 5G to the home 49
Table 13: Wireless surgery and wireless robots key features 51
Table 14: Massive IoT and verticals key features 53
Table 15: Key features overview for the three scenarios 54
Table 16: Post-paid mobile data plans associated with a smartphone 58

List of Figures

Figure 1: How mobile traffic is evolving 24
Figure 2: Mobile ARPU decline in selected West European countries 29
Figure 3: EBITDA margins declining trend in Western Europe 30
Figure 4: Capex-to-sales ratio analysis in selected Western European countries 31
Figure 5: Relationships between QoS/QoE and EBITDA margins in selected Western European MNOs 32
Figure 6: Performance objectives for 5G and associated use cases 34
Figure 7: HetNet 36
Figure 8: Optimal role sharing among cloud, Mobile Edge Computing and Device to Device 37
Figure 9: 5G: From Vision to Standard Innovation 40
Figure 10: Network slicing opportunities 41
Figure 11: Traditional mobile value chain 41
Figure 12: The disrupted value chain of wireless telecommunications industry, as seen by the 5G PPP METIS-II project 42
Figure 13: ‘Small cell as a Service’ value chain 43
Figure 14: Private Virtual Network Operator (PVNO) model 43
Figure 15: ‘Tower overlay over 5G’ value chain 44
Figure 16: Sport event integrating virtual reality 48
Figure 17: In-vehicle infotainment 48
Figure 18: 5G to the home 49
Figure 19: Wireless surgery and wireless robots 51
Figure 20: LTE subscription estimates and forecasts, 2012-2020 55
Figure 21: LTE revenues estimates and forecasts, 2015-2020 56
Figure 22: 5G subscriptions 57
Figure 23: 5G revenues 57

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