Fixed wireless will be an initial 5G-based use case in the US, with early commercial launches in 2018 following trials in 2017. Verizon will launch in three to five US markets in the second half of 2018. The company is targeting a 20–30% penetration rate in these markets, with an initial focus on the residential space. Verizon plans a broader rollout in 2019 and has indicated that over a three-year period the opportunity expands to around 30 million households outside of its existing fibre footprint. For operators, 5G-based fixed wireless offers a potentially lower cost and faster means – compared to FTTH – of expanding high-speed offerings to households and businesses, bringing the opportunity to gain market share and incremental revenue.
Financial outlook – pressure on traditional mobile revenue, while 5G capex still uncertain. Challenging revenue outlook for traditional mobile services.
Slowing unique subscriber growth, regulatory intervention and intense competition continue to put pressure on operators’ traditional mobile revenues. Global revenue will grow by around 1% between 2017 and 2020 (CAGR) and will roughly stabilise beyond 2020 at $1.1 trillion. China offers the largest revenue growth opportunity for operators. Despite growth slowing, especially beyond 2020, China will account for around 40% of global mobile revenue growth between 2017 and 2025. Three major Chinese mobile operators will grasp this opportunity, while smaller revenue growth in Sub-Saharan Africa, Middle East and North Africa, and Latin America will be spread across a larger number of operators.
In the US, competition has reached unprecedented levels; unlimited plans are now the norm and traditional mobile revenue is under pressure after years of growth. However, despite near-stable revenue going forward, the US will remain the largest mobile market in the world by revenue ($245 billion in 2025). Europe‘s mobile revenue over the period to 2025 will also be roughly stable across the majority of markets. After several consecutive years of mobile revenue declines (since 2008), the European mobile sector is benefitting from a lessening regulatory impact, in-market consolidation, a shift to higher 4G data usage and an improved macro-economic performance across many countries
Cross-sector competition is also intensifying in the digital era; taking a share of the consumer wallet is increasingly challenging for companies across the telecoms, media and technology (TMT) ecosystem. Internet-based subscriptions for films and music are growing rapidly, and new devices and technologies are entering the market such as home speakers, AR, VR, and the wider consumer Internet of Things. This adds revenue pressure to the most established streams including mobile and fixed access, smartphones and traditional media content.