4G service revenue to overtake 3G in 2016

Revenues generated by 4G subscriptions will surpass those from 3G for the first time this year according to new data from Strategy Analytics.

Scott Bicheno

June 3, 2016

2 Min Read
4G service revenue to overtake 3G in 2016

Revenues generated by 4G subscriptions will surpass those from 3G for the first time this year according to new data from Strategy Analytics.

SA also forecasts that total wireless service revenues (excluding M2M) will peak in 2019 at US$882 billion and after that start declining. Growth is already pretty flat, with that 2019 number only 3% up on the 2015 level as competitive and regulatory pressures limit growth opportunities.

The total number of global 4G connections is forecast to rise from 1.1 billion to 1.9 billion over the course of this year and hit 5.6 billion by the end of 2022. Coincidentally the GSA also announced today that the total number of global 4G networks has topped 500.

“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,” said Phil Kendall of SA. “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.”

“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 of SA. “We forecast that user-linked 5G connections will grow from 2 million in 2020 to 116 million in 2022, with modems and routers driving early volume.”

The first SA chart below shows that it took 4G two years to get going and then a further four years to become the major revenue generator. SA seems to think this process will repeat itself with 5G, starting from 2020. The second chart shows ARPU (average revenue per user) and reveals that number to be in severe decline, with even 4G ARPUs at around a third of their 2011 peak levels this year and 5G not expected to ever reach that level.

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About the Author

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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