5G means more content subscription, more streaming video and more revenue
The next generation of wireless connectivity will arrive circa 2020, and for telecoms the stakes are high, writes Roman Taranov, the chief executive of RGK Mobile.
When it sweeps in, 5G will bring with it an immediate demand for extensive and costly upgrades to infrastructure. Operators that lean into the challenges of transitioning from 4G will be rewarded with the amazing speed and capacity promised by 5G. Forward-looking operators will take this chance to offer more mobile subscription services – particularly streaming video – while laggards risk falling behind in a mobile world where video rules.
In theory, 5G will be three times faster than 4G and increase download speeds to 10,000 Mbps, a powerful combination of speed and bandwidth that will support more sophisticated internet-based apps. It’s a seismic event, MyCustomer.com writes, destined to “dramatically change mobile marketing for publishers, advertisers and end users.” From an operator’s perspective, the ability to stream more stable, timely, and high-quality videos is one of the most dramatic and lucrative changes to come.
What makes video so essential today? Statistics compiled by Blue Corona are compelling:
- Video accounts for 70% of the top 100 search results
- Users linger an average of 2.6 times longer on web pages with video
- Mobile viewers watch more than 50% of online videos
- 80% of consumers like to watch video demonstrations before buying products
There are many more reasons – faster connections, entertaining content, an inclination to watch rather than read, among others – that mobile video is emerging as a conversion champion.
Although video is one bright note for operators, there’s more to do on the way to 2020. OTTs are stretching into services once reserved for operators such as voice expanding their position in the value chain. Operators can meet the challenge by developing their own strategies for diversification and building new distribution channels. Even those providing content services and video streaming today can grow into more areas for greater profitability. As an EY global study concludes, no matter how telecoms proceeds, “higher levels of agility, more collaborative mindsets and a recasting of customer relationships will be vital to all.”
There will be rough patches along the way. A coalition of EU operators and tech groups has criticised EU leadership for a “timid approach that will do little to improve Europe’s chances of success,” and after an early round of proposed regulations commented that “the outlook for innovators appears quite grim.” They fear that failure to craft “investor-friendly” policies will endanger those crucial and costly infrastructure improvements.
Still, operators in Europe and the U.S. are envisioning a 5G world where new revenue streams flow. Viacom, for instance, has agreements with U.S. wireless carriers that will vault its content onto mobile devices. Vodafone brought its new TV service to Ireland, bundling the usual cable channels with its broadband service. Even Netflix is seeking European partners to stream its catalog, starting with the French company Orange and its 10 million subscribers.
By the end of 2022 there will be nearly 9 billion mobile subscriptions, according to an Ericsson report; at 80 billion, broadband subscriptions will represent 90% of all mobile subscriptions; unique mobile subscribers could hit 6.1 billion. There will be no shortage of consumers to appreciate 5G, whatever it may bring, when the new era dawns.
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