Tuesday, August 17, 2021

Fixed Wireless Might Dwarf IoT and Edge Computing Revenues Earned by Mobile Operators

As important as edge computing might be, as a revenue growth driver for mobile operators, revenue contributions might be relatively slight for some time. The same might be said for the revenue contributions made by internet of things services as well.


In 2024, it is conceivable that  IoT connectivity revenues for mobile operators globally could  be in the low millions to tens of millions of dollars, according to Machina Research. Millions, not billions. 


In 2026 the global multi-access edge computing market might generate $1.72 billion. Even if one assumes all that revenue is connectivity revenue booked by mobile operators, it still is a far smaller new revenue stream than fixed wireless represents. 


By way of comparison, consider 5G fixed wireless services. It is not cutting edge or buzzy. it is consumer revenue in most cases, rather than enterprise or business revenue. Fixed wireless, always a niche in the access business, does not inherently create revenue in computing-related new areas.

Still, in the near term--five years or so--5G fixed wireless might be the most-tangible new revenue stream most mobile operators can hope for.

Assume there are 75 million 5G fixed wireless connections in service by about 2026. Since most 5G consumer mobility accounts will replace a 4G connection, there is relatively little incremental revenue upside, even if 5G accounts wind up generating higher average revenue than a 4G account, for any reason. 


source: Ericsson


5G fixed wireless connections could--in many cases--provide significant incremental revenue growth, allowing mobile operators to compete for home broadband accounts now largely the province of fixed network operators. 


Assume global gross national income gross national income per capita of about $11,600 and a monthly home broadband cost of five percent of GNI per capita. That is about $580 in annual revenue per line. 


So 75 million new fixed wireless accounts represents perhaps $43.5 billion in new annual revenue for mobile service providers. That can take the form of new accounts or market share taken from other suppliers. 


To put that into perspective, consider projected revenue for other new services.

In 2020 there were perhaps 80 million fixed wireless subscriptions in service. Researchers at Mobile Experts see that number growing to almost 200 million by 2026. 


Ericsson notes that more than 70 percent of all service providers now offer fixed wireless access   services. Ericsson also predicts that fixed wireless connections will exceed 180 million by the end of 2026.


By 2026, assuming these forecasts are accurate, fixed wireless will represent about 12 percent of fixed network broadband connections, Ericsson estimates.  


Keep in mind that the incremental revenue from 75 million 5G fixed wireless connections does not include the revenue from 4G fixed wireless connections, which might represent another 110 million connections. 


That represents an additional $104.3 billion in annual revenue, assuming a global average of $48 per month, per line. 

 

source: Mobile Experts 


The point is that incremental revenue from 5G fixed wireless is likely to dwarf new revenues earned by mobile operators from edge computing and internet of things.


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