Wi-Fi and other connective technologies will shackle the growth of mobile data revenues in the U.S. for at least the next few years, Parks Associates predicted.
The market research firm said worldwide mobile data revenues will grow from $386 billion in 2015 to $630 billion in 2020, with much of that growth occurring in the Asia/Pacific region. But growth in Western Europe and North America – particularly in the U.S. – will be much slower, Parks said, as consumers turn to non-cellular technologies in an effort to lower their mobile bills.
Roughly 70 percent of U.S. mobile users are interested in Wi-Fi-only data plans, Parks reported. And cable operators are actively pursuing those users by promoting their Wi-Fi hotspots aggressively.
"The IoT market represents significant revenue potential for mobile operators, who are looking to the IoT to complement traditional smartphone-driven mobile data revenues," said Harry Wang of Parks Associates in a prepared statement. "5G data service ARPU has limited room for expansion from current levels, so mobile operators are seeking new revenue streams in the broader IoT market. However, meeting both consumer demand and industrial needs requires comprehensive changes to their network architecture, from radio access to the core network functions."
The IoT will increasingly drive mobile data revenues, Parks said, and will create opportunities for operators of dedicated networks to build specifically for connected devices. And Parks predicts there will be 17.2 million 5G consumer subscribers worldwide by the end of 2020, largely in major markets such as the U.S., Japan, South Korea, China and Western Europe.
"It will be a key step for mobile operators to transform their networks from hardware-centric to software-centric and cloud-native in order to have the necessary flexibility to meet customer needs in the IoT market," Wang said. "They will need to plan and coordinate 5G standards development with their own network transformation efforts, while pursuing customers in the competitive IoT market. It will not be an easy transition."
Meanwhile, demand for Wi-Fi-only data plans might prove disruptive for traditional cellular carriers. Major cable companies such as Comcast and Charter Communications continue to eye the wireless market and may leverage MVNO deals already in place to launch mobile services. Comcast is also likely to purchase at least some spectrum in the FCC's reverse auction of 600 MHz airwaves.
Cable operators clearly have some big hurdles to overcome to compete in wireless. They don't have their own networks and will have limited spectrum – if they have any at all – so they'll have to use the infrastructure of the carriers with which they hope to compete to provide any comprehensive mobile offering. But if high demand truly does exist for Wi-Fi-only data plans, mobile network operators may have major battles on the horizon.
- see this Parks Associates press release
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