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5G enterprise market will overtake consumer cellular by 2036

5G is the first cellular technology generation that enterprise use cases will play a larger role than consumer use cases. Learn more from ABI Research's 5G Technology Summit.

Although many experts evaluated past cellular network generations based on how the technology would affect consumer use cases, enterprise use cases will play a more significant role in 5G technology.

By 2036, 5G enterprise use cases will outweigh consumer use cases. Operators must embrace the enterprise market to reap 5G's economic benefits, according to Malik Saadi, vice president of strategic technologies at ABI Research, a global technology market advisory firm based in Oyster Bay, N.Y. The 5G enterprise market is key for operator ROI because 5G will require expensive implementations. Consumer use cases, on the other hand, won't provide enough revenue to independently reach ROI within 10 years of 5G entering the consumer market in 2021.

"The industry should consider 5G as a long-term investment that will not make any ROI before 2030 at the earliest. The enterprise market will be the main revenue generator and the 10-year cash cow for mobile operators looking forward," Saadi said at ABI Research's virtual 5G Technology Summit.

Without the enterprise market, 5G would reach ROI by 2034 or 2035. With the enterprise market, 5G is expected to reach ROI by 2030, just five years after 5G's entry into the enterprise market in 2025, ABI Research said.

5G has and will continue to develop quicker than its predecessors, and the enterprise market will help the 5G market as a whole reach ROI around the 10-year mark after 5G's first deployments in the early 2020s, according to ABI Research. The 5G enterprise market's key use cases include fixed wireless access (FWA), private networks, open radio access network (Open RAN or O-RAN) technology and spectrum sharing.

Why 5G needs the enterprise market

While many experts have touted 5G benefits for businesses and enterprise use cases, enterprises will greatly benefit 5G as well. Many experts expect 5G technology to be so expensive that ROI from individual consumers would be insignificant for up to 15 years after deployments. And, with how quickly 5G has advanced, Saadi predicted the 5G market would plateau quicker than the 3G or 4G markets if 5G relied solely on consumer technology like its predecessors.

In order to stimulate demand and prevent a premature plateau for 5G products, the telecommunications industry must turn to newer use cases and business models, Saadi said. That's where enterprises come in.

5G market forecast
The enterprise cellular market will enable 5G to reach ROI five years earlier than it would with just consumer cellular, ABI Research said.

Additionally, 3rd Generation Partnership Project's Release 17 for 5G aims to solely enable business use cases, according to Asha Keddy, corporate vice president at Intel. Previous cellular generations were more consumer-focused.

"If I look at Release 17 … there's no mention of phones or consumers, right? It's so much more industry-oriented and … businesses-oriented," Keddy said at 5G Technology Summit.

In addition, 5G should benefit the global economy by playing a role in various industries, including retail, manufacturing, mining and healthcare. In particular, 5G could introduce faster network speeds and connectivity benefits to these sectors.

ABI Research predicted 5G will contribute $7.6 trillion to the global economy by 2030.

We do expect that, by 2036 … enterprise use cases will be more important than consumer use cases.
Dimitris MavrakisABI Research

4 use cases of the 5G enterprise market

Four use cases will play key roles in the success of the 5G enterprise market, ABI Research said, and they are the following:

  1. FWA. 5G FWA provides homes and businesses with internet access through mobile network technology rather than broadband internet. FWA can also extend connectivity to rural areas, according to Lian Jye Su, principal analyst at ABI Research. This means people in underconnected communities, enterprises with widespread offices or remote workers can receive high-speed network connectivity.
  2. Private networks. Private 5G networks can enable localized and self-contained network environments, Su said. For example, verticals such as mining and healthcare can benefit from private networks because they enable secure and reliable network connectivity in isolated areas. Especially in healthcare, this feature can be life-saving, according to Dimitris Mavrakis, research director at ABI Research.
  3. Open RAN. Open RAN technology uses commoditized hardware, open interfaces and proprietary software to provide users with low-cost and vendor-agnostic mobile network connectivity. Open RAN is not a passing fad, Mavrakis said, so suppliers should consider how to incorporate Open RAN in their 5G offerings.
  4. Spectrum sharing. Licensed spectrums currently dominate the cellular market, so vendors may begin 5G deployments with licensed spectrums. However, use of shared spectrums will increase with Citizens Broadband Radio Service in the U.S., which supports three tiers of spectrum sharing to avoid interference, while providing more people and organizations with access to these spectrums.

These key features of 5G primarily benefit enterprise use cases, which heightens the need for operators to adapt to enterprise vertical requirements, ABI Research said. Without the enterprise market, 5G won't reach its highest economic potential.

"We do expect that, by 2036, what will be spent for enterprise cellular will be more than public cellular, so enterprise use cases will be more important than consumer use cases," Mavrakis said.

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