Research: 4G revenue is set to overtake 3G for the first time

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Strategy Analytics has released its revenue forecast for various cellular technology generations and found that 4G revenue is set to overtake 3G for the first time. 

4G will account for 49 percent of mobile operator revenues this year from a 25 percent share of year-end subscriptions. Whilst it’s an important shift in the landscape, operators aren’t expected to reap any financial gains as the revenue growth will be offset by a 21 percent decline in 2G service revenue and 19 percent decline in 3G revenue. 

Phil Kendall, Executive Director Wireless Operator Strategies says, “The advanced markets of the USA, Japan, and South Korea will see the vast majority of their revenue come from 4G LTE services this year, though China will also make a significant contribution. Overtaking the USA to become the world’s largest 4G market in Q3 2015, China is the envy of other developing markets with over half of its 2016 revenue projected to come from 4G LTE.” 

4G will represent 1.9 billion connections by the end of 2016, up from 1.1 billion connections at the start of the current year. The number of 4G LTE networks connections will reach 5.6 billion by the end of 2022, representing 62 percent of all user-linked wireless subscriptions. 

Looking forward, Strategy Analytics believes commercial 5G services will begin in a small number of markets in 2020 starting with the USA and Asian markets. User-linked 5G connections will grow from 2 million in 2020 to 116 million in 2022, with modems and routers driving early volume. 

“Commercial 5G services will begin in a small number of markets in 2020, mainly in the USA and advanced Asian markets,” said Susan Welsh de Grimaldo, director of Wireless Operator Strategies at Strategy Analytics. 

The forecast will be an eye-opener for operators who do not operate 4G services. Whilst most operators in western markets have deployed 4G, this isn’t the case around the world. Many Indian telecoms operators such as Vodafone, Telenor, Tata Docomo, BSNL, MTNL have limited or no presence, for example. 

Vodafone recently announced it will be going slow on its 4G investment in India, a strategy it may now want to re-think. 

Download the full report from Strategy Analytics here. 

What are your thoughts on the latest forecast? Let us know in the comments. 

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