Despite the huge hype surrounding the potential benefits of 5G technology and its widespread global deployment, the technology is still being used around the world. It is said to have not yet been monetized by carriers. Abolaji Adebayo report
While 5G has been embraced by telecom consumers for its benefits such as low latency and high speed, carriers are spending huge amounts of money to deploy 5G networks and at the same time investing in the infrastructure for its expansion.
Communication network
The rollout of 5G networks promises unparalleled speed, reliability, and connectivity, ushering in a new era of innovation and digital transformation. However, converting these technological advances into tangible revenue streams remains a challenge for carriers and industry players.
At the heart of the debate is the complex interplay between investment costs, consumer demand and regulatory frameworks. The large capital expenditures required to deploy and maintain 5G infrastructure pose a significant barrier to profitability, especially in markets with limited resources and infrastructure gaps.
connection
Globally, more than 261 carriers in 101 countries, including Nigeria, have launched commercial 5G mobile services by January 2024, and more than 90 carriers in 64 markets have also launched commercial 5G mobile services in the coming years. is promising the launch of 5G. According to a GSMA report, the number of 5G connections in the world is expected to reach 1.6 billion in 2023 and increase to 5.5 billion by 2030. “5G connections are expected to account for more than half (51%) of mobile connections by 2029. By the end of the decade he will rise to 56%, making 5G the dominant connectivity technology.” the report states. It has become clear that the number of connections on legacy networks 2G and 3G will continue to decline in the coming years and the number of network outages will increase as users migrate to his 4G and 5G. It is estimated that 143 legacy networks (2G and 3G) are scheduled to be retired between the end of 2023 and 2030, and approximately 5% of them are scheduled to be retired by the end of 2024. The number of 5G subscribers in the country increased to 2.3 million in December 2023, according to data released by the Nigerian Communications Commission (NCC). However, this is equivalent to 1.04% of the number of active telephone service subscribers in the country, which stood at 224.7 million at the end of the year.
revenue
However, despite huge investments in the technology, no carrier has been able to generate revenue from 5G. This was revealed by GSMA Intelligence, a global technology research organization. According to Peter Jarich, head of GSMA intelligence, operators around the world are unable to monetize these new networks despite billions of dollars of investment.
Outlook
Meanwhile, Jarich said the upcoming 5G-Advanced technology will solve some of the monetization pain points. According to GSMA Intelligence, fifth-generation technology, despite promising low latency, high capacity, and a wide range of applications for consumers and businesses, faces monetization challenges. The promise of 5G is that new revenues and new capabilities can be unlocked and monetized.
I don’t think we’ve quite achieved that yet, as we’ve seen around the world. In subsequent (network) generations, 3G, 4G, and 5G capital investment/revenue ratios are increasing. More money is being spent to get a certain amount of revenue,” he said in a keynote speech at the 7th ETTelecom 5G/6G Congress 2024. The head of the London-based GSMA research and consultancy firm said 5G will: Without a doubt,’ has achieved its stated promise in terms of monetizing network investments. “And that’s a problem,” he said.
advanced
In a discussion with carriers, Jarich highlighted that 5G Advanced could enhance uplinks and security, and bring new opportunities for edge and slicing. “The main use cases for 5G-Advanced are expected to be 5G multicast, low-cost Internet of Things (IoT), and non-terrestrial network (NTN) integration.” Troubled by the meaningless benefits they receive, they are not in a hurry to deploy 5G Advanced. Only 4% of carriers expect to deploy 5G-Advanced in the year it is released, according to data from GSMA Intelligence. is.
“In contrast, an astonishing 99% of carriers are likely to be considering deploying 5G Advanced for five years after release. 5G-Advanced, part of 3GPP Release 18 in 2024, It is expected to usher in the next milestone in the 5th generation era. It will be the bridge to the six generation (6G) mobile networks expected to be commercialized from the end of the decade (2030).”
Additionally, monetizing 5G services will depend on the ability to unlock new revenue streams beyond traditional voice and data offerings. This includes exploring innovative use cases and applications such as IoT (Internet of Things), edge computing, augmented reality, and smart city solutions that leverage the unique capabilities of Nigeria’s 5G network. .
Experts expect 5G monetization to be gradually rolled out over the next few years through a variety of applications.
Nigerian factors
The path to 5G monetization in Nigeria is fraught with uncertainties and challenges, despite the potential for lucrative opportunities. Skeptics point to slow adoption of 5G-enabled devices, interoperability issues, and privacy and security concerns as potential obstacles to widespread adoption. Moreover, regulatory complexity and spectrum allocation issues further complicate the monetization equation, requiring cooperation and coordination between industry players, governments, and regulatory bodies.
Given these challenges, some industry experts are warning against unrealistic expectations and advocating a phased approach to 5G deployment and monetization in the country. This includes prioritizing investments in high-demand areas, fostering ecosystem partnerships, and nurturing an innovation hub that fosters new 5Genabled services and applications. Looking ahead, the future of his 5G monetization in Nigeria remains uncertain, with differing opinions on its timeline and potential impact.
While some expect rapid commercialization and widespread adoption, others argue that significant hurdles need to be overcome for 5G to reach its full revenue-generating potential. In short, 5G monetization efforts are complex and multifaceted endeavors that require careful navigation and strategic foresight.
device
Three mobile network operators have rolled out 5G in Nigeria: MTN, Airtel and Mafab Communications. However, although carriers continue to invest in expanding their services, several factors such as the high cost of 5G devices prevent services from providing the best quality experience compared to 2G, 3G, and 4G. is delayed in joining. Meanwhile, according to the NCC, as of December 2023, most phone connections in Nigeria were still on 2G.
According to industry data, 57.84% of all connections in Nigeria were 2G at year-end. According to the Gulf Cooperation Council (GCC), developed countries in the Asia-Pacific region, North America, and Greater China are expected to lead in 5G adoption due to expanded network coverage, enhanced 5G marketing efforts, and increased adoption of 5G devices. has been done. “5G is already established, and major operators in these markets are now rolling out 5G SA (standalone) and making plans for 5G Advanced,” GSMA Intelligence said. Of the 261 commercial 5G services available, 47 are provided by 5G SA networks, with 89 more planned for deployment in the near future.
London-based telecommunications company GSMA’s research and analysis division said that challenges around device affordability and spectrum availability will slow the pace of growth in connectivity and coverage in emerging 5G markets. “This highlights that 4G still has a lot of room to grow and will remain the dominant technology in many countries through 2030,” GSMA Intelligence said. According to the company’s data, global monthly mobile data traffic per connection will jump from 10.2GB in 2022 to 12.8GB in 2023. However, the company said there were “significant disparities” between high-income regions and low- and middle-income countries. (LMIC).
The reality of monetization
Experts say businesses remain unconvinced by the significant benefits 5G claims to bring in terms of improved efficiency and productivity through the deployment of diverse solutions across multiple industries. And for the consumer segment, the only use case emerging with 5G is high data speeds.
The potential is huge for various use cases such as IoT, smart cities, and Industry 4.0. However, for a carrier to effectively monetize his 5G investment, it is important to identify and scale use cases in collaboration with ecosystem partners that will facilitate revenue generation.
Experts expect 5G monetization to be gradually rolled out over the next few years through various applications. As stakeholders continue to explore new business models and revenue opportunities, the ultimate success of 5G will depend on collaboration, innovation, and a determined commitment to unleashing its transformative power for the benefit of society.
last line
As 5G technology matures, consumer demand grows, and new use cases emerge, the industry will gradually realize a return on investment. Until then, the industry must continue to invest in network infrastructure, foster innovation, and adjust business models to seize the opportunities presented by 5G technology.
