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Survey shows optimism about 5G ARPU

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Telecoms.com survey shows industry optimism that 5G will increase ARPU, but the number of offers that services providers will need to develop will be significantly more than 4G.
Survey shows optimism about 5G ARPU

5G will increase ARPU. That’s according to 71% of a survey of 420 telecoms professionals carried out by telecoms.com Intelligence in April this year. But the number of 5G offers that service providers will need to launch to drive this extra revenue will increase. 21% say that number of offers will double, 29% feel that the increase will be between 2x and 5x, and 11% feel that there will more than 5x the number of 4G offers.

In South Korea, the market recently passed the 1,000,000 mark for 5G subscribers. SK Telecom said that they will have 8,000 different content offers for 5G. Plus we’re seeing that customers are paying a premium for 5G. So the results from the survey are, if anything, downplaying the ARPU uplift and the increase in number of offers that 5G will drive.

This presents a problem to some, and a glaring opportunity for others. At Mobile World Congress this year, I was talking to an operator about time to market. They told me that it takes more than a month to get an offer set up, configured and live on their charging and billing systems. Given that many 5G offers may have short shelf lives (e.g. weekend premium rate VR cast of a music festival or a sports match), then having such a legacy approach may not be the best idea. Some operators are still dependent on their BSS vendor to come in and configure their systems for them to set up new offers. If an operator can’t configure their own offers without support from their BSS vendor, then how on earth are they going to manage with the potential number and range of 5G offers?

When we look at the largest source of 5G revenues by service types, MIoT (massive IoT) got 27.5% of the vote and services based on Ultra-Reliable Low-Latency Communication (URLLC) / Industrial IoT / Industry 4.0 picked up 31.5% and eMBB (enhanced mobile broadband) got 38%. The relatively high numbers for URLLC and MIoT would tie in with sentiment that 5G will open up many new enterprise opportunities for service providers. Niall Byrne wrote in a recent Openet blog that industrial enterprises would expect to pay a premium for guaranteed QoS. This throws another variable into the pricing / offer configuration rules. The ‘plumbing’ of pricing (rating variables, criteria, dependencies, etc) will become more varied, complex and dynamic.

At the same time, there is the commercial reality of getting more offers out to market in a shorter time. As the ‘plumbing’ becomes more complex, BSS systems incorporating the automated provisioning down to charging, rating, metering & network systems (e.g. service Ids, Rating Groups in DPIs systems) need to become simplified for the end users. They should have easy to use offer templates and blueprints to enable rapid offer creation – without technical intervention – the plumbing and regression tests should be triggered and automated and just happen in the background. The primary human intervention should be to validate the regression tests on a daily basis and then publish. This will be key to enabling fast time to market to realise the number of offers that will be needed to drive 5G revenues.

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Blog Author

Tony Gillick
VP Solutions Management

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