Heading into 2024, many industry/financial analyst reports and trade press articles painted a somewhat gloomy picture about where we are with 5G. Aside from the success of fixed wireless access, the oft-cited themes are that we haven’t seen major new use cases in 5G, and the MNOs aren’t seeing a sufficient return on their 5G investment.
But I think this misses something big. 5G has been a success in the United States, although perhaps not yet in the way that many had predicted. Put simply, we’ve understated the impact of the enhanced mobile broadband (EMBB) pillar of 5G — not just the speeds, but the improved economics for the MNOs and the seamlessness and consistency of the experience for users.
Here are a few facts and figures to support my argument. The U.S. MNOs spent $130 billion on mmWave and mid-band spectrum (plus the T-Mobile purchase of Sprint, which was largely for its 2.5 GHz treasure-trove). These purchases were needed for propagation and capacity purposes. Then the MNOs collectively spent roughly $200 billion in capex since 2020 building out 5G networks.
What has that delivered to consumers? A pretty fantastic wireless experience at a price point that hasn’t changed much. The average download speed has nearly quadrupled since late-stage 4G. Mobile data usage per subscriber in the U.S. has more than doubled since 5G was introduced in 2020, now averaging about 26 GB per month.
Most users would say that they don’t see anything really game-changing with regard to network performance on their 5G phones. But I think that’s mainly because users aren’t doing anything all that different on their phones than they were a few years ago. They’re just doing a lot more of it, and it’s mainly video. Consider how consistent the wireless experience is today. All the Instagramming, TikToking, and YouTubing works well nearly all the time. The typical photo you’re zipping to your friends is double the number of megapixels as it was four years ago as a result of the fantastic cameras on most phones. I personally find myself defaulting to cellular, rather than Wi-Fi, in most public spaces, such as coffee shops or hotels, and at venues such as concerts and trade shows.
The other piece of this equation is economics. Yes, the MNOs have boosted revenues by migrating subscribers to higher tier plans and also charging some silly junk fees. But wireless prices are largely unchanged from 4G. If the average usage has approximately doubled, that tells us that the MNOs have reduced their cost to deliver a GB of data by roughly half in the 5G era. This has been accomplished through a combination of 5G radio capabilities, super-efficient chipsets, advances in spectral efficiency and the added capacity of new spectrum.
Most mobile data traffic projections, from the likes of Ericsson, Nokia and Cisco, forecast CAGR of 25%-30% through the end of the decade. What has been the trend for the past five years will continue through the next five years. These projections assume that there will be some new applications and use cases. On the enterprise side, it will be capabilities such as slicing, URLLC, and deployment of private networks. But these areas will grow gradually: they’re hard to scale.
On the consumer side, augmented/virtual/mixed reality and AI will contribute to the mix. Perhaps these new use cases will comprise one-third to perhaps one half of the traffic growth, likely back-end loaded for the late 2020s. But the rest of this growth will be ‘more of the same,’ as in continued use of mobile broadband, for videos, images, and the like. It’s similar to how streaming has caused an approximate doubling of average household data consumption on fixed broadband networks to 600 GB/month.
So we’re not doing remote 5G surgery yet, and there aren’t the projected many billions of IoT devices or fleets of autonomous vehicles connected to 5G networks. But it’s no small achievement that the MNOs have been able to offer 4x the speeds and support more than 2x the data consumption ⸺ at 0.5x of the cost per GB to deliver ⸺ over the course of four years since 5G was introduced.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is managing director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce staff. They do not necessarily represent the opinions of Fierce.