Just as 2G was followed by 3G, and 3G begat 4G, it was inevitable that today’s 4G LTE networks would give way to 5G. But the emergence of 5G networks and services does not imply a clear 5G business model. Indeed, from operators to vendors, there is still doubt as to whether 5G will dominate global markets. On the cusp of 5G commercialization, it’s therefore critical to come to terms with the opportunity – if there is one. Learn more by contacting us at info@gsmaintelligence.com.

1. DATE AUTHOR
5G is coming…
…but is there a business case?
11/09/2018 Pablo Iacopino
Director of Ecosystem Research
CHARTING THE FUTURE OF MOBILE

2. The 5G Commercial Era
It is coming very soon…if not already here
5G commercial launches: 2018-2020 48
Countries launching
mobile 5G services
by 2020
13%
Network population
coverage (global) by
2020
Source: GSMA Intelligence.

3. 5G Use Cases
Many are still in their infancies
For some of the key use cases
mainstream adoption is five (or more) years from now
Massive IoT
• Smart homes
• Smart cities
• Smart buildings
• Multiple vertical industries
• Wearables
Enhanced MBB
• Gigabytes in a second
• Immersive reality
• eSports
• Live in-venue digital
entertainment
• Work and play in the cloud
URLLC
• Autonomous driving
• Industrial and vehicular
automation
• Robotics
• Remote surgery
• Mission critical
applications

4. 5G Business Models
Financial backdrop drives use case urgency
Source: GSMA Intelligence.
Global mobile revenue and capex
Early 5G era:
Mobile industry dynamics
• Top line stagnation as subscriber
growth slows
• Data traffic monetisation
challenging due to short-lived
ARPU uplift
• Still high capital intensity
• New mobile spectrum needed
• Telecoms valuations nearly flat, in
line with growth expectations
13%
7%
3%
1% 1%
16%
17%
18%
16% 16%
2000-2005 2005-2010 2010-2015 2015-2018 2018-2020
Revenue growth (CAGR) Capex as % of revenue

5. 5G Consumer
Digital to augmented transition will take time
Connected
Consumer
Digital
Consumer
Augmented
Consumer
3G
4G
5G
Immersive
Reality
Live in-venue
digital
entertainment
2005-2010 2010-2020 2020-2030
Web
browsing
Digital
entertainment
content
eSports
Apps
IoT
Consumer
robots
FintechSocial
networks
IP comms
Maps
Lifestyle
services
Mobile
commerce
• Immersive Reality
dominates the hype,
but we are still far from
an acceptable UX
• Faster speed (north of
1GB/s) has minimal
pricing uplift on its own
• In early commercial
developments, 5G is a
multi-play offering story
Challenges
Wearables

6. 3G
2G
5G
4G
0
1
2
3
4
5
6
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Numberofmobileconnections(billion)
Role for 4G?
Pay the bills for the next 10 years
2018:
• 5G launches
• 4G takes the lead
Share (2020)
Source: GSMA Intelligence. Excluding licensed cellular IoT.
Global mobile connections: by network generation
22%
6%
15%
57%
4G & 5G:
Better together
• 4G will continue to evolve
while 5G gets built,
providing much needed
coverage and capacity
• Most operators are
targeting a NSA model
before eventual transition
to a SA model
• Legacy technologies have
long lifespan (3G in 2025:
50% more connections
than 5G)

7. 5G Revenue Story
Enterprise is the incremental opportunity
Incremental revenue potential from 5G?
(MNO Survey)
14%
23%
69%
0% 20% 40% 60% 80% 100%
Government
Consumer
Enterprise
Most important Somewhat important
Neutral Not very important
Least important
Source: GSMA Intelligence. Based on global survey of operator CEOs.
Challenges
• 5G is often part of a wider digital
transformation journey –
implementation requires many
years
• Industries digitise at different
speeds…
• …companies digitise for
different reasons
• 5G opportunity = intersection of
5G capabilities and enterprise
needs

8. 5G Enterprise
A competitive market brings serious, new contenders
Power pushed to edge = telco and IT worlds collide Telco vs. Cloud
• Much of the 5G enterprise
opportunity lies in providing
customised network functionality
to serve verticals
• Incumbent cloud players are
targeting the same opportunity,
with several competitive
advantages
• The value points from a
customer perspective are in the
control platform and analytics –
not end-point connectivity

9. 5G Verticals
Which are moving faster?
• Robots and robotics
• Remote real-time or near-
real-time manufacturing
• Labour augmentation
• Connected operational
intelligence and analytics
Manufacturing
and Industry 4.0
• Goods delivery
• Remote site surveying
• Agricultural monitoring
• Remote mapping
• Disaster response
• Remote IoT
Drones (UAVs)
• Connected vehicles
• Remote driving (tele-
operated)
• Vehicle platooning
• Truly autonomous
vehicles (level 4/5)
Automotive
Trials
(operators)
Ecosystem
collaboration
is key

10. • Mobile connectivity
• Hardware
• Billing
Operator Roles vs. Verticals
Diverse opportunities as ecosystem matures
• Mobile connectivity
• Hardware
• Billing
• Network slicing
• Edge computing
• Managed services
• Cloud services
• Platform offering
• Analytics
• Vertical solutions
• Professional services
1
2
3
Core connectivity
Premium infrastructure
Full stack
• Mobile connectivity
• Hardware
• Billing
• Network slicing
• Edge computing
Value
Complexity

11. What Next?
How will operators execute on the opportunity?
Industry
collaboration
Network
investment
optimisation
Product
innovation

12. THANKS!
Pablo Iacopino
Director of Ecosystem Research
piacopino@gsma.com