Revenue Drivers For 5G Profitability

5G will be faster than 4G, and it will change the way business is done. Is it now time to embrace the future and upgrade your subscribers to a 5G plan and device?

Most major operators have implemented a 5G service at no extra cost to the subscriber [1]. This makes 5G affordable in today’s current mobile phone market. After assessing the improved speeds and greater bandwidth that 5G provides, upgrading to a 5G compatible device and plan are a must (smartphone, tablet, hotspot, or other hardware).
The most widely beneficial feature of 5G is its connection speed in comparison to 4G’s maximum speed of 100 megabits per second [2]. In contrast, 5G has the potential to reach 10 gigabits per second. This major jump will be in the best interest to operators across the telecommunications market looking to grow their ARPU (Average Revenue Per User). With the speeds 5G is promising, data transferring won’t cause any network issues.

The pace of 2G/3G network shutdowns is increasing, as operators’ eye up opportunities for 4G/5G
Many operators are looking to shut down their 2G/3G connections, creating opportunities for the growth of 4G/5G. A graphic [3] created by GSMA Intelligence illustrated how 64 networks will be shut down between 2021 and 2025. In truth, 2021 saw the highest number of 2G and 3G network shutdowns so far, with this number not set to slow down. 
 
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What are operators looking to gain out of their 5G investment?

We are still in the early developments of 5G, and the technology is set to have a mass abundance of future opportunities for telecom operators, as a result, 5G subscriptions are set to increase as more powerful applications come through.

1) How to increase ARPU by up-selling higher value 5G devices?

5G ARPU is expected to outperform that of previous technology generations such as 4G. By encouraging MNOs to upsell 5G compatible devices, or a more extensive mobile data plan allowins for better 5G possibilities to their subscribers, the telecom operators will benefit from the increase of ARPU. As a result, if a consumer is able to obtain a 5G compatible device, they will be more likely to remain loyal to their chosen operator by upgrading any future devices, generating sustained or increased revenue in the long term.

5G Penetration [4]

 – 106 commercial 5G launches

 – 7% population penetration

 – 20% Global connections by 2025

2) How to increase ARPU by up-selling higher value data plans?

The introduction of 5G will create many opportunities for operators. By up-selling to higher-value data plans that allow subscribers to connect to 5G will keep MNOs and MVNOs above the curve and ahead of the competition. The transfer from 4G to 5G is a must for MNOs and MVNOs to grow, expand, and maintain their current subscriber base resulting in a growth of ARPU. ARPU, therefore allows telecommunication operators to understand how they are performing in comparison to their competitors.

How Sicap’s TargetMe Solution Increases ARPU?

By using Sicap’s TargetMe solution, you will be able to segment subscribers into groups finding out which users have a 5G compatible device, but not a 5G plan. This will allow operators to target the right audience at the right time, resulting in long-term investment from their subscribers. Having an identified target group allows for up-sell and cross-sell opportunities based on subscriber intelligence. TargetMe has a scheduler that can run at the most appropriate times to maximise attention span from subscribers.